Will The Coming IPO Boom Be A Precursor To An AI Bust? SpaceA, OpenAI, Anthropic

OpenAI, Anthropic, SpaceX along with spades of other technology companies and companies from other sectors are about to stage an IPO in 2026, according to various media reports. SpaceX already did its IPO.

OpenAI raised 122 billion USDl currently at a post money 852 billion USDs valuation, Anthropic raised 65 billion USD at 965 billion USDs post money valuation and SpaceX staged an IPO on Thursday last week and is currently valued at 2.43 trillion USDs, 15 % above its IPO price.

OpenAI, Anthropic, SpaceX's AI business are currently heavy loss making. SpaceX' AI business recorded a net loss of (6.36) billion USDs.

If OpenAI, Anthropic which loose billions of USDs per year complete a successful IPO and other companies from other sectors that are also loss making complete also IPOs successfully, this could signal that we are in an artificial intelligence, AI bubble, which inflates assets across the global economy.

At the peak of the internet Dot Com bubble and subsequent bust, companies, which either had no revenue or were heavy loss making were staging IPOs and that signaled the peak of the internet Dot Com bubble.

Now, many analysts and investors say companies like OpenAI, Anthropic, SpaceX and even the magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and NVIDIA have revenue and that could substantiate their high for the magnificent 7 valuations and exorbitant for OpenAI, Anthropic, SpaceX valuations. If the AI boom does not turn into a bust.

The coming sky high IPO valuations of  OpenAI, Anthropic and SpaceX's IPO already priced and with market capitalization of 2.43 trillion USDs along with spades of other technology companies could well signal the top of the current artificial intelligence, AI boom which could be followed by a bust, defined by the Nasdaq Composite falling more than 62 % from its recent stock market high.

 

SpaceX Valuation. On The Eve Of The IPO

SpaceX is now valued by public markets at 2.1 trillion USD.

There are three possible scenarios for Tesla's value in the future:

1) Current scenario based on the three most recent yearly financial reports of SpaceX: 

SpaceX is worth 210 billion USDs. This is only true if Tesla spins off or sells out of its loss making AI business and is left only with its Connectivity business which produced net income of 4.423 billion USD in the calendar 2025. SpaceX's space business had a net loss of (657) million USDs in 2025.

SpaceX's reported a loss of (4.276) billion USDs for the 1st Quarter of 2026 and a loss of (4.937) billion USD for the calendar 2026. 

2) Mild profitability scenario. 

SpaceX's AI business lives only partially to the extremely positive scenarios of some Wall Street equity research investors and analysts and SpaceX's AI business starts making 5 billion USDs in net profit on 18 billion USDs yearly revenue in 2030. SpaceX's overall revenue and profit reach 42 billion and 10 billion USDs in 2030 and grow by 5 % a year from there on for the next 10 years.

In such a scenario, SpaceX could be worth 1.1 trillion USDs

3) Huge success 'current' scenario.

SpaceX lives up to the some of the most optimistic current Wall Street equity research investors and analysts' estimates. 

For example SpaceX's AI business is a huge success and reaches 87 billion USDs in revenue and 15 billion USDs in net profit in the calendar 2040. SpaceX's connectivity business clocks in 40 billion USDs of revenue and 8 billion USDs of profit in 2040 and SpaceX's space business also starts making around 15 billion USDs in revenue and 3 billion USDs in profit by 2040.

In such a case SpaceX's value could reach 2.8 trillion USDs. 

  

Tesla Valuation. June 2026. On The Eve Of SpaceX IPO

 

Tesla's intrinsic value is 120 billion USD. This is the value of the electric vehicle technology, itself, which is pending on Tesla finding a way to produce electric vehicles profitably, without subsidies. Electric vehicles like Tesla's use large quantity of ferrous metals, which make producing electric cars unprofitable.

Since Tesla is getting somewhere around 7 500 USD subsidy per Tesla electric vehicle, Tesla is inherently unprofitable. In reality. An unprofitable business is worth 0.

So, in reality there are three scenarios for Tesla's worth:

1)  Tesla finds a path to minor profitability after subsidies via a technological breakthrough. In this case Tesla is worth 120 billion USD.

2) Tesla does not become profitable after subsidies. In this case Tesla is worth 0, zero.

3) Tesla develops a new profitable business like robotic taxis, which could make money for the company. The size of such a business could be worth between 100 billion USDs to 1 trillion USDs, depending on Tesla's market share.

Partners Group Limits Withdrawals From A Private Equity Fund. Implications For Private Equity And Private Credit

 

Partners Group, the Swiss based alternative assets manager capped withdrawals from one of its private equity funds.

The recent wave of withdrawals limits affected mainly private credit funds. Cliffwater, BlackRock, Blue Owl, Ares, etc. all set limits on withdrawals from private credit funds they manage in the months since the beginning of 2026.

Partners Group's shares slid 16 % on the day the company announced it limits withdrawals from its private equity fund and this triggered a wave of selling of leading listed private equity giants like Blackstone, KKR, EQT, CVC, Bridgepoint Group, TPG, Ares etc., because they are fears the recent private credit rout could affect the private equity funds.

As long as the AI boom does not turn into bust defined by the Nasdaq Composite falling more than 62 %, the private equity giants Blackstone, KKR, Carlyle, Apollo EQT, CVC, Bridgepoint Group, TPG, Ares, Blue Owl etc. and mid sized and small private equity managers and the private equity industry should turn out OK and it would be able to weather the current troubles.

NVIDIA Valuation Scenarios

 

NVIDIA's market capitalization is currently 5.2 trillion USDs

There are several scenarios possible:

 1) The AI boom which NVIDIA leads really is the fourth industrial revolution and changes the world more than even the internet boom. The Nasdaq Composite could double from current levels in such a case, In such a case NVIDIA's market capitalization could reach 9.3 trillion USDs

2)  The AI rally lives up to half the current hype. The Nasdaq Composite falls by 30 % from current levels. NVIDIA's market capitalization could fall to 2.1 trillion USDs in such a case

3) The AI boom turns into a bust defined by the Nasdaq Composite falling more than 65 % from current levels. NVIDIA's market capitalization could fall to 810 billion USDs in such a case

 

The Embedded Leverage In Private Credit

 

The leading private credit firms Blackstone, Blackrock, KKR, Carlyle, Apollo, Ares, Blue Owl, TPG, Partners Group, EQT, CVC etc. disburse loans often 7 % to 15 % interest rates to clients, many of which a mid sized technology firms.

Many of these firms are considered risky and unbankable by money center banks as JPMorgan, Bank of America, Wells Fargo, Citi, Goldman Sachs, Morgan Stanley, etc. 

The high interest rates of private credit create operational leverage, whereby if the firm that receives the loan, develops very well, grows revenue fast and reaches profitability the private credit loan enhances the profitability and growth of the company. Contrary, if the firm goes into trouble, stops growing revenue and becomes loss making the high interest rates of 7 % to 15 % on the private credit loan stifle the firm even further, a sort of negative compounding.

So private credit is a natural amplifier.

The private credit industry manages 2.5 trillion USDs.

Barring a technology, AI lead bust the private credit industry should weather the current storm of First Brands, Tricolor, MFS and the redemption wave.

Private Credit's Main Client Is AI

 

The largest parts of the private credit industry's 2.5 trillion USDs assets under management are intertwined with the artificial intelligence, AI boom.

Wall Street equity research analysts estimate that 25 % to 35 % of the private credit industry's 2.5 trillion USDs assets under management are exposed to the risk of AI disruption.

Other sources say 20 % of the private credit industry's loans are directly tied to software.

So if the current fourth industrial revolution or the AI boom pops and the Nasdaq Composite plummets by 62 % or more, Blackstone, BlackRock, TPG, Carlyle, Apollo, KKR, Ares, Blue Owl, EQT, Partners Group, CVC etc. leading private credit asset managers and mid-sized  private credit asset managers could incur losses in their assets under management of 250 billion USD in mild losses scenario, 350 billion USDs in middle sized losses scenario, 500 billion USDs in worst case scenario and 1.2 trillion USDs in a catastrophic scenario, according to Wolfteam Ltd.'s projections and estimates.

Even the worst case should be absorbed by the global economy without a Great Recession 2008-2009 style economic loss. 

As long as the banking sector is not horrendously hurt by a credit crisis. 

The probability of which is 16 % currently. 

Will The Current Private Credit Difficulties Crash The Global Economy?

 

 Most probably not.

The private credit industry's assets under management are around 2.5 trillion USD, most probably not big enough to bring down the banking sector which participated with loans along the private credit disbursed by Blackstone, Blackrock, KKR, TPG, Apollo, Carlyle, Ares, Blue Owl, EQT, Partners Group etc.

However, if the AI boom turns into a bust, in a worst case scenario around 1.2 trillion USDs of the private credit industry's assets under management could be wiped out, according to Wolfteam Ltd.'s projections and estimates. There is no data how much banks have lent along into private credit financed deals.

Such a shock could possibly rattle the global banking sector. And if to that is added the losses on regular bank loans to the technology sector, AI and software especially, a new credit crisis could unfold.

Bur these are too many interconnected events to simultaneously unfold for the time being.

AI continues its fourth industrial revolution, barring a bust followed by wide scale defaults.

Alphabet Raised 60 Billion USD In Bonds In Four Months. Are Hyperscalers Getting Overextended?

 

Alphabet, the owner of the Google search engine is about to raise 60 billion USDs in bonds in the last four months. It raised the money not only in USD, but also in British pounds, Canadian dollars Swiss francs and Japanese yen.

Other hyperscalers like Meta, owner of Facebook have borrowed intensively to finance the huge capital expenditures in artificial intelligence, AI.

Amazon, Alphabet, Meta and Microsoft plan, taken together to invest in AI and cloud infrastructure, i.e. AI data centers and energy to power these data centers 750 billion USDs in 2026 alone according to their latest quarterly reports!

Much of the money will be borrowed.

No one from Amazon, Alphabet, Meta and Microsoft apparently wants to miss on the artificial intelligence, AI data center wave. Fear Of Missing Out, FOMO is rife in Silicon Valley. Apparently according to most of the leading technologists and technology investors it will be one winner to rule them all. Or at most 2.

The artificial intelligence, AI fourth industrial revolution will have many winners in hardware, software, energy infrastructure, according to Wolfteam Ltd.'s projections and estimates.

Amazon, Alphabet, Meta and Microsoft have fortress balance sheets with tens of billions of USDs of cash on them in each case.

However, the planned 750 billion USDs in investment is a huge sum of money and Amazon, Alphabet, Meta and Microsoft could easily run into hundreds of billions of USDs of debt which could threaten their operational excellence, namely to produce huge multi billions of USD of revenue and profit.

In end effect over-extension of AI investment could threaten the existence of Amazon, Alphabet, Meta and Microsoft if artificial intelligence, AI does not produce the envisaged benefits in productivity. A large increase in expected productivity could bring huge increases in revenue and profit for Amazon, Alphabet, Meta and Microsoft.

But this is only a rosy, positive assumption, expectation. If it does not come true or even comes true partially the very existence of Amazon, Alphabet, Meta and Microsoft could be threatened if they go on to burrow hundreds of billions of USDs.

One should bear in mind the non negligible probability of recession caused by let's say high oil prices, a new geopolitical conflict, a pandemic, banks bringing onto their balance sheets trillions of USDs of off balance liabilities, limit of chip technology production, sharp drop in technological productivity, etc.

All these events, if they cause a deep global recession will decrease by tens of percentages the revenues and profits of Amazon, Alphabet, Meta and Microsoft or even drive them in net losses, which could threaten Amazon, Alphabet, Meta and Microsoft's very existence.

But for nor, the positive and full of optimism artificial intelligence, AI train is going in full speed ahead. 

KKR Refunds 350 Million USD In Carried Interest

KKR, The New York-based alternative asset manager said it would refund $350 million in previously paid-out carried interest to investors in its second private equity fund in Asia.

This is the latest in a string of setbacks for the private equity and private credit industry.

The Tricolor, First Brands and Market Financial Services(MFS) bankruptcies have already caused a stir for the private credit industry.

Still, the private credit sector at 2 trillion USDs of assets under management seems big enough to absorb these shocks.

If the Federal Reserve does not raise interest rates abruptly and there is no AI technology bust, the private credit sector should weather the storm in 2 to 3 years.

Will Private Equity, Private Credit Recover Fast From The Recent Turmoil?

 

First Brands, Tricolor, Market Financial Services' sudden bankruptcies triggered a small run on leading private credit firms especially and private credit asset managers also like Blue Owl, Ares, BlackRock, Blackstone, Apollo etc.

Since there have been no other high profile bankruptcies of companies which took out high yield loans, it seems the private equity and private credit industry will recover from the shock in a year or so.

Provided that the AI boom does not turn to a bust or there is no other geopolitical or macroeconomic shock.

The recent redemptions from private credit funds staved off and the first quarter results of private equity and private credit firms were good. 

So private equity and private credit asset managers are on a recovery trajectory. 

Ares First Quarter 2026 Results

 

Ares Management Corp  wrote the following in its First Quarter 2026 Earnings Press Release:

 'GAAP net income attributable to Ares Management Corporation was $142.6 million for the quarter ended March 31, 2026. On a basic and diluted basis, net income attributable to Ares Management Corporation per share of Class A and non-voting common stock was $0.46 for the quarter ended March 31, 2026.

After-tax realized income was $452.4 million for the quarter ended March 31, 2026. After-tax realized income per share of Class A common stock was $1.24 for the quarter ended March 31, 2026. Fee related earnings were $464.4 million for the quarter ended March 31, 2026.'

Ares Management's stock price is down circa 40 % from its recent peak driven by the turmoil in the private credit business, namely the bankruptcies of Tricolor, First Brands Group and Market Financial Solutions.

Since private credit usually gives out credits with between 7 % and 15 %, even 20 % interest rates many a times to finance mid cap technology firms private equity buyouts, bankruptcies as Tricolor, First Brands Group and Market Financial Solutions are to be expected. This can not be called normal line of business, but given the inherent leveraged nature of private credit, especially when the private credit loans written are used to finance private equity buyouts, there are bound to be bankruptcies.

Circa 30 % or even more according to some analysts of the private credit loans are disbursed to technology, even artificial intelligence, AI related firms. Some of them loosely related as healthcare AI and energy related AI infrastructure.

If the AI boom does not turn into a bust defined by the Nasdaq Composite falling more than 62 % of its recent peak, private credit loans flows and private credit giants as Ares, Carlyle, Apollo, Blue Owl etc.'s stock prices should start to recover. 

A key risk to the AI trade are the coming high profile IPOs of ChatGPT, Anthropic and the combined SpaceX and xAI entity. It they are successful, there is the risk they will sap large scale capital from other AI technology firms. Both that or if the coming AI IPOs flop, could cause a large correction in the Nasdaq Composite and by extension the S&p 500, Dow Jones Industrial Average and most probably global stock markets.

 

The Current Geopolitics Could Lead To A Mining And Emerging Markets Boom. After The Current AI, Private Credit Boom

 

The current geopolitical tensions could lead to a boom for mining companies and emerging markets.

Between 2003-2008 there was an emerging markets and energy companies market capitalization boom, which followed the 1999-2001 dot com boom and bust.

Currently, a similar situation could develop.

We have now a technology artificial intelligence, AI driven boom carried to a large extent to money flows to the lightly regulated private credit markets. The current circa 2 trillion USD of assets under management private credit industry size lead inflows in AI technology companies. 

The recent TriColor, First Brands, Market Financial Services, MFS large profile bankruptices and funds like Blue Owl, Apollo holding private credit redemption could signal a slowdown of the AI boom or even an AI bust

Funds could easily flow into emerging markets and energy and mining companies, especially.

The private credit 2 trillion USDs of assets under management go to a large extent to finance high yield loans for private equity buyouts.

If there is a sudden stop to the private equity and private credit funds financing mainly mid sized technology deals, the artificial intelligence AI boom could slow down significantly.

And if the AI boom turns into a bust, caused either by the Federal Reserve raising rates or money suddenly stopping flowing into private equity and private credit, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the next boom where the money flows is emerging markets and energy, resources, commodities mining company, according to Wolfteam Ltd.'s projections and estimates.

Ares Limits Private Credit Fund Withdrawals After Large Scale Redemption Requests. An Analysis

 

Ares limited withdrawals to 5 % from its $22.7 billion Ares Strategic Income Fund (ASIF) after investors sought to withdraw as much as 11.6 % of the fund's Net Asset Value.

Ares' Strategic Income Fund (ASIF) redemptions cap, after also Apollo also capped redemptions from its $25 billion private credit fund, Apollo Debt Solutions is another sign of the stress the nearly 2.0 trillion + USD in assets private credit industry is going through.

Ares' 22.7 billion USDs and Apollo's 25 billion USDs are huge funds.

Investors sought to pull roughly 22% of shares from Blue Owl Credit Income Corp., its flagship $36 billion private-credit fund.

These are huge multi billion USDs redemptions requests.

If the private credit industry does not honor them, be it staggered through time, the private credit industry will have a huge credibility issue, which could turn into a solvency problem in time.

Furthermore, if the current AI technology boom turns into a bust, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the private equity and private credit industry will face bankruptcy possibility issues, because then clients may start puling out money from private equity and private credit funds en masse.

 

Apollo Limits Redemptions Of Its Flagship Private Credit Fund

 

 

Apollo announced it limits redemption from its 15.1 billion USD net asset value flagship private credit fund Apollo Debt Solutions BDC sticking to a predetermined 5 % cap.

The fund received redemptions requests equal to 11.2 % of shares of the fund.

Apollo has made the claims it has lent to larger, stronger companies, but the news it is limiting redemptions from its flagship private credit fund show it is not insular to the AI driven Software As A Service SaaS technology companies business models reappraisal that is plaguing the technology sector. 

Software is 12.3 % of the assets of Apollo Debt Solutions BDC.

The news that Apollo is having difficulties paying out request from its flagship credit fund confirms that the private credit industry is going through very tough times as both stretched software valuations and AI disruptions chips away at the previously winning model of Software As A Service SaaS for technology companies.

The private equity and private credit industry should recover from the current setback.

Artificial intelligence, AI is not going to disrupt software development as much as currently feared, according to Wolfteam Ltd.'s projections and estimates. 

If the AI boom does not turn to a bust, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the private equity and private credit industry should turn out OK, with limited defaults.

 

 

 

Private Credit And The Coming Inflation

 

If inflation goes up due to the current geopolitics, the Federal Reserve will most likely raise rates.

Other global central banks like the European Central Bank will follow.

The higher interest rates will hit the lending portfolios of the leading private equity and private credit asset managers Blackstone, KKR, BlackRock, Carlyle, Apollo, Ares, Blue Owl, EQT, Partners Group etc. by driving down the AI technology companies' valuations and hampering their ability to service the high interest rate private credit loans. Leveraged buyouts of technology companies will suffer as the AI companies will face difficulties servicing their debt.

The private equity, private credit industry will weather the shock if the current AI boom does not turn into a bust defined by a fall in the Nasdaq Composite of 62 % or more. If the inflation shock causes a global economic crisis, the Nasdaq Composite can fall more than 62 % and the private credit industry will face solvency problems, according to Wolfteam Ltd.'s projections and estimates.

Otherwise, the current inflation shock will be absorbed via large, multi billion private credit loans write offs. 

BlackRock's Private Credit Business. BlackRock Writess Off a 25 Million USD Private Credit Loan To 0

BlackRock is the world leader with great distance of the fast growing index investing funds. Due mainly to index funds' investments BlackRock is the world's largest asset management company in terms of assets.

But the asset management industry's profits in the last 5-7 years are concentrated in alternative asset management, namely private credit.

BlackRock is still building out actively its private credit business and BlackRock's private credit business is most likely in the top 10.

Due to BlackRock's aggressive build out of its private credit business there are problems also.

Two weeks ago BlackRock wrote of the value of a private credit loan to 0, from 100 % value of the loan filed in its third quarter 2025 filing. Most likely this is due to both heavy AI, technology investment and fast private credit growth by BlackRock.

Most probably more private credit loans from BlackRock and the entire private credit industry will be written off due to aggressive lending growth by private credit asset managers.

If the current geopolitical inflation shock causes leading central banks to raise rates aggressively, this will send tremors in the private credit markets which is basically a leveraged trade on interest rates. If global developed markets interest rates level rise by 1 % to 2 %, the private credit will most likely write down tens of billions USDs if not hundreds of billions of USD's from the current 3.5 trillion private credit assets under management globally.

However, if there is no  high scale financial crisis the private credit industry will weather such a shock without large, widespread insolvencies of both the leading large and mid cap and small private credit asset managers.