Because token costs are doubling every 45 days while downstream productivity gains are only about 5%, AI labs are approaching a reckoning where costs vastly outpace benefits — so a lab that can IPO now should do so before that reckoning becomes visible to the market.
Chamath recounts a conversation with his CTO showing token costs doubling every 45 days for only ~5% productivity gain, and argues every company will hit this reckoning within a few years — so labs should IPO before that becomes apparent. ✦ AI generated
Chamath Palihapitiya · All-In Podcast · 2026-07-11 · original ↗
starts at this moment · 5:49
“What are the chances here, Chimoth, that these other two get out this year or maybe in like, you know, say 9 months in the in the first quarter of next year?”
I don't know how many other companies will actually go through this reckoning now, but the point is everybody in the next three or four years will for sure go through it. So, I suspect that if you can get out now, you should get out now before all of that starts to seep into the water table because I think that's probably what allows you to get out at a huge price and raise a huge amount of money.
verbatim transcript · starts at 5:49
5:49essentially flat. And he said, basically, and I said, well, explain why that is. and he said, "Honestly, what we're finding out is that you need to use a lot more tokens to get to this next iteration of improvement because we've effectively already asmmptoted." And I said, "So, what should we do?" And he said, "Honestly, we have we have to figure this out." And so, we're going to
6:13take a step back and try to figure out what to do. I don't know how many other companies will actually go through this reckoning now, but the point is everybody in the next three or four years will for sure go through it. So, I suspect that if you can get out now, you should get out now before all of that starts to seep into the water table
6:33because I think that's probably what allows you to get out at a huge price and and raise a huge amount of money. >> All right, Brad, you are uh well invested and well known for being invested in these two uh next IPOs, so you probably have some good insights since you talk to them on a regular basis. chances they get out in the next six to nine months. Both of them, you'd
6:55say 100% chance, unless there's some outside event, you know, blockade of Taiwan, some black swan event that we're not anticipating. What do you think the chances are they're public when we're sitting here and I'm skiing in Hokkaido? >> Yeah, I think I think it's very high. But let me let me first say, you know, the SpaceX IPO where we were also investors and we also bought in the IPO.
7:17I mean, it was textbook. It was a hugely successful IPO. They raised $75 billion at 1.75 trillion. Okay, so it went out below where we are today. It's up 25%. You know, and let's call it on 35 billion of forward revenue. So if you think about that revenue multiple, it's trading at 2 trillion on roughly 35 billion of of forward revenue. It's an incredible achievement. I think it was
7:42textbook. I think Anthropic and OpenAI were watching very closely because frankly we had not had an IPO of that size and to Elon's credit and to the team's credit Brett and Gwen they really pioneered some really smart and interesting things as part of that IPO. So, you know, you heard from Gavin Anthropics rumored to be, you know, trending over a 100red billion in revenue compared to the 35, right? If
- ·Token costs double every 45 days
- ·Productivity gains from tokens are only ~5%
- ·Chamath's CTO surfaced this cost-benefit mismatch
- ·Every company faces this reckoning within years
- ·Reckoning will spread through the market over time
- ·Getting out early avoids that exposure
- ·Early exit enables huge valuation, big raise