After a mixed day on Wall Street Monday, stocks are looking to advance today. Crude oil is pulling back, while gold, silver, and Treasuries are mostly flat. The dollar is lower.
OpenAI just joined the going-public race, announcing it filed confidential paperwork with the Securities and Exchange Commission for an Initial Public Offering (IPO). The ChatGPT maker is in a race with Claude developer Anthropic to tap the public markets for capital. The SEC move allows the company to get feedback and address data requests from regulators in a process that will take several weeks to a few months. An IPO could follow sometime in the fall.
Source: Wall Street Journal
OpenAI recently raised $122 billion in a private funding round, money it needs to fulfill massive spending commitments in 2026 and beyond. As this Wall Street Journal story notes, companies up and down the AI food chain are selling hundreds of billions of dollars in bonds and shares – and tapping banks and private credit firms – to fund capital expenditures.
The hope is that selling access to AI models will generate enormous amounts of revenue over time. That would make future debt payments manageable, and reward shareholders with incredible long-term gains. It’s worth noting that the AI boom is also going global. China is planning to spend two trillion yuan, or around $295 billion, to build out a nationwide network of data centers that rely on Chinese technology in its AI race with the US.
Finally, interest rate pressures continue to build at home and abroad. The Bank of Japan is set to hike its benchmark rate to 1% at the policy meeting that ends next Tuesday. That would put Japan’s policy rate at its highest since 1995. Higher energy prices and a falling yen are helping push up inflation in a country long accustomed to deflation. The US Federal Reserve also meets next week. While it’s highly unlikely to raise rates, policymakers could prep the markets for a potential future hike in post-meeting commentary.
