The Numbers Don't Add Up
What does the word "trillion" mean to you? In what contexts do you tend to encounter that number? It's not particularly meaningful, really. Can you picture one trillion of... anything? One billion is hard enough, for most of us — if you made $100,000 a year, you would need ten thousand years to earn a billion. A trillion would take ten million years.
Around 20 countries have an annual GDP of at least $1 trillion. Countries like Argentina, Israel, Singapore, and the United Arab Emirates do not reach that threshold. It is not reasonably an amount of money that any of us should have to consider, in any real sense. And yet.
"Anthropic files to go public in a potentially trillion-dollar debut," screamed a CNN headline on Monday. "Anthropic files for IPO before OpenAI amid race to the public markets for trillion-dollar startups," added NBC News. SpaceX, meanwhile, has apparently cut its target IPO valuation to a mere $1.8 trillion, per Bloomberg News a few days ago.
Calling these company values "absurd" doesn't really do it justice. These aren't, functionally, real numbers. In no possible way do I claim to have a hold on the underlying economics here — read people like Ed Zitron for more of that — but a company that is reasonably good at sending a few people into space but also good at blowing up rockets over large regions of ocean and seems to think its vaguely related Hitler-loving chatbot is worth, let's say extremely conservatively, Texas plus Florida is, well... let's say it is probably overvalued.
Again, without making any claims to macroeconomic wisdom, there is Something Happening Here. While the AI companies slap-fight their way to Switzerland-sized IPOs, the stock market in the US continues to act like material reality is irrelevant. Donald Trump's war in Iran, mixed in with however many other of his economy-destroying policies you feel like mentioning, has raised gas prices to the roof and driven most rational observers to drink, but the "market" — that ultra-rational economic index we all have been trained to treat like a sentient being — weathered a temporary blip a couple of months ago before clambering back up out of the canyon.
"Wall Street rides high into June on hopes that the war will soon come to an end," warbled CNBC at the end of May. Sure? I guess.
My point here, such as it is, is that nothing makes sense right now, and also AI companies are bad and almost certainly full of shit to a remarkable extent, and also the dollar amounts this industry is now trafficking in should literally not be in reach.
In 1937, John D. Rockefeller was so rich that his net worth was about 1.5 percent of that of the US GDP. If the SpaceX IPO goes as planned, the world's biggest dipshit and unrepentant mass murderer might reach over a trillion dollars himself; that's more than twice the percentage of GDP Rockefeller achieved. Of course, he managed it during the Depression; what do we call what's happening today?
