Khosla Ventures Managing Director Keith Rabois: Headline IPO Setbacks Will Reassess AI
Khosla Ventures Managing Director Keith Rabois stated that the most disruptive factor for the venture capital-supported AI ecosystem is any short-term decline following the IPOs of Anthropic or OpenAI. He pointed out that the market currently prices these two companies at a trillion-dollar scale, and if their revenue or profit margins in the first month to the following quarters post-IPO fall short of expectations, confidence will be rewritten.
Rabois mentioned that this would immediately reset nearly all AI valuations and could cut off funding for about half of the companies currently raising capital. He did not assert that this would necessarily happen and believes that if it does, it is more likely to occur in profit margins rather than revenue. His logic is that the scale of new investment dollars is built on the premise of "creating trillion-dollar companies within a fund's lifecycle," and currently, there are only a few benchmark examples; once it becomes impossible to predict more trillion-dollar companies, the existing bids and investment volumes become invalid.
Both labs have submitted confidential registration drafts to the U.S. SEC, expected around June 2026, with market rumors valuing them from nearly a trillion to higher ranges, and reports also suggest Anthropic is aiming for a higher IPO price. Public discussions are also focusing on whether open-source models can drive down prices, and whether computing expenses and profit margins can support high price-to-sales ratios. Rabois emphasized that he is not predicting a collapse but pointing out that pricing anchors are highly concentrated on the performance of these two public companies.
In market mechanisms, buyers are VCs discounting the application and tool layers as the "next trillion," while sellers are the two model companies about to become public benchmarks; the driver is the confirmation of revenue and profit margins post-IPO, rather than another round of private equity stories. Funds are flowing from private equity premiums to pricing that can stand firm on exchanges. Beneficiaries are follow-on investment targets after successful IPOs and passing profit margins, while those under pressure are mid-to-late-stage financing companies still pricing based on trillion-dollar narratives, and the labs themselves that must deliver profit margins within a few quarters.
Source: Public Information
ABAB AI Insight
Khosla is one of the early investors in OpenAI, and Rabois has shifted the risk from "will the model win" to "will the exchange accept private equity multiples." By 2026, private equity has valued the two labs close to or exceeding the trillion-dollar discussion range, with large listings like SpaceX being used as templates. Once the public market discounts based on profit margins, all funds writing checks at the same multiple will have to revise their models; this is a liquidity event, not a technical route vote.
The capital path positions headline IPOs as the discount rate for the entire industry. Application companies, infrastructure, and tool rounds are based on the numerator of "trillion-dollar outcomes within fund lifetimes" and the two labs as the denominator. Profit margins are more sensitive than revenue because revenue can still rely on pre-sold computing power and enterprise contracts, while gross margins expose reasoning costs and open-source alternatives. Open-source models narrow capability gaps while maintaining price gaps, hitting the most challenging page to present during IPO roadshows.
Similar structures were seen in the network stocks after the decline of portal site IPOs in 2000 and the multiple compression following the first quarterly reports of a batch of high-growth SaaS companies in 2019. The industry phase is shifting from private equity internal benchmarking to public market pricing power. There are still multiple funds bidding based on trillion-dollar replicability, indicating that the anchor has not yet been broken; Rabois's comments before the IPO window serve to embed a markdown logic for non-headline targets in his portfolio.
This structure represents a transfer of pricing power: private equity consensus yields to the first few quarterly reports of the two companies. The mechanism is that the lifespan of venture capital is shorter than the profit realization period of the industry, necessitating the use of large IPOs as proof; failure to prove this leads to a contraction in dollar supply, with half of the ongoing financing not due to product stagnation, but because the assumptions of exit multiples have been rewritten by the exchange.
ABAB News · Cognitive Law
The valuations of the entire industry are often tied only to the quarterly reports of the two companies.
Revenue can tell a story, while profit margins are responsible for deconstructing the story.
When the fund lifespan is shorter than the industry's realization period, IPOs become the interest rate for the entire market.