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Greetings!
Nvidia, wow. The AI chip giant did it again, delivering better than projected 85% revenue growth for its April quarter, the first in its 2027 fiscal year. Even better, Nvidia forecast 95% growth for the second quarter. Its fiscal 2027 is shaping up to be a firecracker, with sharply faster growth than last year’s still-stellar 66% rate of expansion.
Nvidia is also printing cash: Free cash flow in the quarter was $48.6 billion, which is half what it produced for all of fiscal 2026! (More details are here.) For all that, the center of tech attention on Wednesday was on OpenAI and SpaceX, both moving rapidly toward their public debuts. SpaceX’s IPO paperwork finally became public late Wednesday—that news would be hard to miss, to be sure, seeing as business media has breathlessly chronicled every twist and turn of what’s expected to be the biggest IPO ever.
Meanwhile, we got news on Wednesday that OpenAI plans to file the initial paperwork for an offering in the next few weeks. That implies it will happen earlier than expected, perhaps by the end of the summer. You can understand why OpenAI is moving quickly. The frothy reaction to AI chip designer Cerebras Systems’ IPO last week—the stock is currently trading 57% above its price in that offering—suggests investors are keen for anything AI related right now.
OpenAI, despite its management drama and strategic missteps, would still be hugely attractive for public market investors given the name recognition of ChatGPT. There’s only one question: How much longer will the bullish sentiment hold up?
AI obsessives should pay more attention to the bond market, where long-term yields hit 19-year highs earlier this week (see this chart), which isn’t a good sign for the equity market (see this smart column by Bloomberg’s John Authers) or for AI financing generally. Bond investors are presumably worried about the still-unresolved Iran war and the possibility of a global oil shortage disrupting the economy. AI euphoria has allowed equity investors to shrug off those worries lately, but you can imagine a day sometime soon when that dynamic reverses.
If as seems likely we see a big stock market correction, all bets are off for IPOs that haven’t yet made it to market. As for those that have gone public—presumably SpaceX will make it in time—you might see a more realistic assessment of the value of that company, whose entire future is predicated on a rocket that is years behind schedule.
SpaceX’s Big Ambitions
There may never be a better case for the term “buyer beware” than SpaceX’s IPO. Here’s a company whose very essence is based on science fiction. Consider these excerpts from its IPO statement, which became public Wednesday afternoon:
Its mission statement is in part “to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.”
SpaceX claims to have “identified the largest actionable total addressable market…in human history,” totaling $28.5 trillion. And that excludes China and Russia. Hmmm.
SpaceX’s TAM includes $600 billion in digital advertising, which is about $100 billion more than the combined ad revenues reported by Meta Platforms and Google for 2025.
Just a minor cautionary note: SpaceX acknowledged that its “anticipated market opportunities” in areas like “passenger transport to the Moon…[and] to Mars and asteroid mining do not exist today.”
Moreover, “activities related to the industrialization and development of the Moon and Mars require” developing “novel or untested solutions” to technological and engineering challenges.
Achieving “our goals with respect to the Moon and Mars…may not generate meaningful revenue or achieve profitability for an extended period of time.”
Then there’s SpaceX’s AI business, which has “a limited number of customers for our AI products when compared to certain of our competitors.”
Even more fun, SpaceX’s controlling shareholder, Elon Musk, isn’t restricted from competing “directly or indirectly” with SpaceX through his other businesses, which include Tesla.
For more details on the offering, see here, here and here.
The Digital Media Land That Time Forgot
We interrupt this episode to update you on the latest sign of decay in the 2015 generation of digital media upstarts. Vox Media, owner of everything from The Verge to SB Nation to New York magazine, is breaking in two. James Murdoch is buying New York, Vox’s podcast business and Vox.com—reportedly for about $300 million.
Everything else will “make up a second independent company under a new corporate name,” run by Vox Media president Ryan Pauley. According to Vox Media co-founder and CEO Jim Bankoff, this separation “best sets up our brands, shows, businesses, talent and teams to continue to lead and prosper in the changing media landscape.”
Another way of putting it is that Murdoch only wanted the good stuff, and he’s leaving the rest—including such long-standing internet brands as SB Nation and The Verge—to fend for themselves.
The breakup reflects the reality that Vox and other older digital media like BuzzFeed—which recently agreed to sell control to media mogul Byron Allen—have lost web traffic thanks to the AI-fueled changes in search. That has added to long-term pressure from the competition for digital ad dollars as the giants—Google, Meta and Amazon—soak up more of what’s available.
Vox’s investors include media magnate Jay Penske, who invested $100 million for about 20% of Vox in 2023. He’ll presumably get some cash out of the company with the money raised from the sale.
In Other News
• Meta began notifying thousands of employees that it is laying them off as it embarks on its latest effort to cut costs and offset its heavy investment in AI. The company had said last month it would lay off about 8,000 people on Wednesday, about 10% of its 78,000 employees.
• Hackers broke into GitHub’s internal systems and stole data from thousands of its internal repositories, the Microsoft-owned company disclosed Tuesday night. While GitHub said it didn’t find any evidence that the hackers stole customer data, they were able to access over 3,800 of its internal repositories, where it stores its own code.
• Fintech startup Mercury said it raised $200 million at a $5.2 billion valuation shortly after receiving conditional approval from regulators for a bank license.
• Intuit shares dropped around 14% as the maker of QuickBooks and TurboTax reported revenue growth slowing to 10% from 17% a quarter earlier. Intuit said it would lay off 17% of staff, or about 3,000 people
Today on The Information’s TITV
Check out today’s episode of TITV in which we catch up with our Google reporter about the reaction on the ground from the company’s I/O conference.
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