This is why Musk rushed consolidating xAI with Spacex and rushed to an IPO. And, why it was so important to him that Nasdaq and Russell rewrite their rules so he could dip into everyone's retirement accounts as quickly as possible. I don't think he's particularly bright, but he has an incredible cunning about how markets behave and how to manipulate those markets to his ends.

The writing was already on the wall about a lot of things WRT the AI market: 1. there's a limit to how much money will be thrown at it before investors expect a return, and that limit is fast approaching, 2. it's turning out "intelligence" is going to be a commodity and it's not much of a moat, 3. cornering the market on memory and GPUs (even if they sit in a warehouse for months or years before going online, as long as it drives up the price for competitors) only works if your competitors don't figure out how to do it more efficiently and on alternative platforms.

Spacex also soaked up a lot of the retail appetite for AI, even though it's an also-ran that barely qualifies, in terms of enterprise and government usage (and for good reasons, both technical and otherwise). Every other AI IPO is going to be facing a more pessimistic market, especially if we continue to be in a tough economic environment.

In short: They waited too long, now they're in a world where they've burned so much money people expect them to deliver something that no one in the AI industry probably can deliver: a monopoly-like hold on a huge percentage of the market, and to invent a bunch of new markets that aren't currently buying AI. They have to have a dominant position for this to work because they have to be able to set their price higher than is standard now, without everyone fleeing to other cheaper providers. And, when the market for memory and GPUs finally gets back to normal and supply catches up with demand, I'd wager a lot of companies, and even individuals, are going to get real serious about open models and self-hosting (unless prices remain competitive for the hosted models).