Daybreak - The AI gold rush is over. The emperors are cashing out

Episode Date: June 2, 2026

Anthropic raised $65 billion last week making it the largest funding round in AI history. It also filed for an IPO days later. So did OpenAI and SpaceX after its merger with xAI. Three of the most powerful AI companies in the world are heading to public markets in the same window. They're flush with capital but burning through more than they earn. Meanwhile, the startups that were supposed to be the next wave are being quietly absorbed. The funds that would have backed them are drying up. So what exactly does the future of AI entrepreneurship look like from here on?Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Last Thursday, Anthropic, the AI company that was founded by Dario Amaday, raised $65 billion in a single funding round, putting its valuation at nearly a trillion dollars, more than every other AI company on this planet. On the same day, the company announced that its revenue had grown from $9 billion a year ago to $47 billion annual run rate today. And then just days later, on the 1st of June, Anthropic filed confidentially for a US IPO. The company that four years ago was a little known alleged OpenEI spin-off is now racing to become a publicly traded trillion dollar company. Now, what made this funding round a bit different from the others before it, though, was who showed up to write the checks. Samsung, Micron and SK Hynix. These are the companies that manufacture the chips that make AI run. All of them invested.

What makes this really interesting is that these are not the type of companies that usually bet on promising startups. They only invest in things that have already become infrastructure, things that their own customers have no choice but to depend on. So their presence here tells us something about how the industry now sees Anthropic, and about where AI as a whole has arrived. In fact, a lot happened in AI last week. Open AI also filed a confidential IPO prospectus with the SEC,

targeting a September listing that analysts say could value the company at a trillion dollars. And SpaceX, which earlier this year completed a merger with Elon Musk's AI company XAI, publicly filed its own IPO prospectors with a NASDAQ listing expected this, month itself. These numbers and developments are extraordinary, but if you really think about it, it's been this way for at least two years now. AI companies growing and setting record after record is not new information. But what is new this time is what these events, taken together, actually signal. The companies that spent the last four years raising money to build the future are now cashing out into public markets.

Meanwhile, the startups that were supposed to challenge them are being absorbed. And the data from inside the venture industry itself tells you a story that you will not get from press releases. Capital in AI is concentrating so fast and into so few hands that the only question worth asking now is, is there anything meaningful left to fund even? Welcome to Daybreak, a business podcast from the I'm your host, Nick Dha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Vargis and I will come to you with

one business story that's worth understanding and worth your time. Today is Wednesday, the third of June. To understand how concentrated things have become, let's start with a number buried in KPMG's Venture Pulse Report from April this year. In the first quarter of this year, Global Venture Capital Investment roughly hit 330,30 billion dollars, which is a record surpassing even the peak of the 2021 boom. That figure gets reported as a sign of industry health, and in a narrow sense, it is accurate. But what it hides is that five US-based companies alone accounted for more than half of that total.

Open AI took $122 billion, Anthropic took $30 billion, and Elon Musk's ex-AI took $20 billion. The remaining roughly $160 billion was split across thousands of other deals globally, meaning the rest of the startup world was dividing up less than half of the pie. A KPMG partner, in fact, put it quite plainly in the same report. They said these big investments are really centered around a few companies, which suggests VC investors are putting money on companies that they expect to be winners as opposed to putting those kinds of bets on smaller players. So, in other words, what looks like a booming venture market underneath is actually a consolidation

market, where capital is flowing towards the already powerful rather than backing the next challenger. The reason for that concentration is AI coding software, which has become the most valuable new software category in a generation. Anthropic launched Claude Code in early 2025 made it generally available by May and by late that year, after a major upgrade in November,

it had gone viral among developers worldwide. My colleague Rachel did an episode on this. I will link it to the show notes. Do give it a listen. So by February this year, Claude Code had roughly crossed $2.5 billion in annualized revenue and this is according to CNBC.

For context, we are talking about a product that did not even exist 18 months ago. Soon after, Open AI2 came up with its own coding tool called Codex which crossed 5 million users by me. So basically, the AI coding market as of now, which barely existed two years ago, is already theirs. So when a product generates this kind of revenue, the character of the investment that follows also changes.

For example, what Samsung? Micron and SK-Hinex are doing by investing in Anthropic is basically buying guaranteed access to a platform that their own customers already depend on. You could say this is the same calculation that led chip companies to invest in the world's largest contract chip manufacturer DSMC, or let telcos to buy stakes in undersea cable operators decades ago. It is the logic of companies that cannot afford to be locked out of something critical, which means the technology has to be. has moved past the startup phase and into something closer to infrastructure. And the recent IPO filings by these AI giants are the final confirmation of that shift.

OpenAI filed its confidential prospectors with the SEC on 22nd of May targeting a September listing. Anthropic followed on 1st of June and worth noting, all three companies, Anthropic, Open AI and Space X, are still losing more money than they make. Jill Luria, who is an analyst at DA Davidson, put it quite plainly to Al Jazeera in an interview. They said Open AI and Anthropic are in a race to go public before capital runs out. Because the combined capital demand from all three listings is so considerable, he added, that it is likely to disrupt markets, meaning going early is a strategic advantage. In other words, the rush to go public right now is partly a risk. race against a finite pool of investor capital that all three companies are competing for at the

same time. Now, here is where the story gets structural, because the companies being absorbed into this orbit, to a striking degree, are people who came out of the same San Francisco AI ecosystem, the same one that produced Open AI and Anthropic and who are now being brought back in. More on this in the next segment. Let's take the example of Cursor. It is an AI coding tool built by four MIT graduates who founded a startup called Ennisphere in 2022. The tool led software developers write, edit and debug entire code basis

through a conversational AI interface. And it became one of the fastest growing software products in history reaching over a million paying customers. And then in April, SpaceX secured the right to. to acquire Cursor for $60 billion later this year. According to TechCrunch, cursor was hours away from closing a $2 billion funding round led by Anderson Horowitz when SpaceX intervened

and the round was abandoned. Because when a near trillion-dollar company put $60 billion on the table, the conventional venture route stops making financial sense. Another example of this is Grog. It is a different kind of a story, but it leads to the same place. This is GROC with a Q by the way. It was founded in 2016 by Jonathan Ross, one of the engineers who built Google's custom AI chip.

GROC spent nearly a decade building specialized hardware for AI inference. This is essentially the computing work that happens every time a model responds to a prompt. In December last year, Nvidia struck what it called a licensing agreement with GROC for roughly $20 billion. With this, it absorbed a. GROC's top engineering talent and its chip technology in what CNBC described as NVIDIA's largest deal ever. GROC continues to exist as a company, but its technology and its people are now inside Nvidia. Cursor and GROC together illustrate the exit parts that are now

available to AI startups. Either it is an outright acquisition by an incumbent or have your most valuable assets absorbed through a licensing arrangement that functions like an acquisition without being called one. KPMG's Q1 report flagged the second model explicitly. It noted that Nvidia's grog deal had already prompted interest in acquieshires from other corporates looking to obtain in-demand AI talent. So basically, this template is spreading. Now, what this produces over time is a closed low.

Talent leaves the big labs, builds something valuable and then gets brought back in. Ideas that were supposed to diversify the AI landscape end up flowing back to the same handful of companies and what looked like an open ecosystem reveals itself to be a very efficient recycling machine. For a venture investor, this creates a structural problem with no clean answer. The KPMG data shows it from the supply side as well. By the end of Q1 this year, funds of a billion dollars or more had already raised more capital than they did in all of last year combined, and this while smaller early stage funds are being starved of LP money. Essentially, the capital is now moving upmarket. So even if a genuinely

novel AI startup exists somewhere, the funds that would have once backed it at seat stage are shrinking. The frontier model layer is close to new entrance now and the infrastructure layer is being locked up through strategic investment and the application layer is getting eaten by the models themselves as they grow more capable. Anthropics $65 billion round is the capstone of a gold rush. The companies that will shape AI for the next decade are already known and they are about to go public.

So the next disruption, if there is one, will come from someone who builds something that none of them saw coming. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague Snitha Sharma and edited by Rajiv Sien.