The AI sector went on a massive tear last year, and there are few signs the pace will slow anytime soon. For investors, this presents a dilemma. While plenty of public companies offer exposure to AI—from chip giant Nvidia to the utilities that power massive sets of data—their sky-high share prices pose a risk of buying at the top.
But what about AI firms that have yet to go public? That’s where all the action seems to be, as companies like OpenAI attract the world’s top venture capital firms with record-breaking funding rounds—a process that mostly excludes everyday investors.
Venture capitalists may have the inside track when it comes to the likes of OpenAI, but the coming months are still poised to offer other intriguing new AI investments. Not only are more AI startups ready for the big time, but after a spell when uncertain economic conditions forced firms to stay private, a new era of public offerings is underway. Dzung Nguyen, a Wells Fargo banker, says she expects the tide to shift in the coming months, even if we don’t see the frenzied action of 2021 when a rash of firms went public, often at implausible valuations.
Who could go public?
Stock pickers can expect a handful of late-stage AI companies to test the IPO waters this year, with some already close to listing. Those include Cerebras, a California-based chipmaker competing against mighty Nvidia. Even though Cerebras is dwarfed by Jensen Huang’s chip behemoth, it has a huge opportunity for growth as firms of all sorts scramble for hardware to power their AI ambitions. But its expansion plans face an impediment: a national security review related to a proposed United Arab Emirates–backed investment. Cerebras declined to comment, but investors have expressed measured confidence it will go through.
Another AI native gearing up for an IPO is CoreWeave, a cloud-computing company, which is reportedly targeting a $35 billion public offering in 2025. Joe Endoso, president of investment platform Linqto, says that CoreWeave’s data center services are necessary for companies building bespoke AI applications. “It’s the difference between buying a sports car and an everyday sedan,” he says.
Both Cerebras and CoreWeave are “interesting AI companies to watch,” says Kelly Rodriques, CEO of secondary trading platform Forge Global. That said, he adds, “I don’t think they’re in the same category as OpenAI, xAI, and Databricks.”
The problem is, there could be a long wait for those best-in-breed AI companies to go public. That’s because AI startups are able to raise massive rounds from venture investors without needing to test public markets, where increased scrutiny and disclosure can lead to deflated valuations. “Public company investors are a lot more unforgiving if you miss a quarter,” explains Garrett Hinds, a senior analyst at PitchBook.
At the same time, Rodriques notes, there is less pressure from employees and early investors for IPOs, owing to a growing number of forums for trading privately held shares.
Databricks is a perfect example. Founded over a decade ago, the AI-powered data analytics platform seems like the ideal IPO candidate thanks to billions in venture funding and robust demand from investors. But instead of going public, Databricks last year raised a huge funding round at a whopping $62 billion valuation while allowing employees to cash out.
Investors hungry for artificial intelligence exposure may, though, have more options than they think, especially if they are willing to consider nonpublic shares or broaden their view of what makes an AI company.
Accessing private shares
For investors too eager to wait for IPOs, there are other ways to invest in hot AI startups. Those include platforms like Forge that connect buyers and sellers of shares in privately held firms. Such platforms, though, are mostly restricted to so-called accredited investors with a household income above $300,000 or a combined net worth above $1 million (excluding primary residence), in part because it is harder to gain an accurate valuation when a company’s shares are private.
Meanwhile, other new vehicles are rolling out that provide everyday investors exposure to venture-backed companies, including the Private Shares Fund, which holds a swath of stakes in pre-IPO companies such as Betterment, Databricks, and Cerebras. Forge has partnered with asset management firm Accuidity to launch a competing product, though it’s not yet available to non-accredited investors.
Another option for investors looking to gain exposure to the sector is to focus on firms whose primary business is not AI but that can make a strong case the tech is part of their growth strategy. That includes payment processing unicorn Stripe, another tech firm that, like Databricks, has been flirting with an IPO for years. Stripe’s valuation tanked along with the broader financial technology sector during the pandemic, forcing the company to accept a dreaded down round—a new funding round that produces a lower valuation—in 2023. Stripe also conducted tender offers in 2024, allowing current and former employees to sell shares.
While it remains unclear whether Stripe will attempt an IPO in 2025, the company has touted its AI adoption, including partnerships with Nvidia and OpenAI. Still, professional investors are skeptical as to whether shoehorning the AI narrative will garner any premium. “Stripe is not an AI company,” says Zeya Yang, a partner at IVP. "I just don’t think that’s something the public markets are going to reward arbitrarily.”
The digital banking platform Chime falls into a similar bucket. The company, which has raised $2.65 billion to date, reportedly plans to go public in 2025, and confidentially filed IPO paperwork late last year. Like Stripe, Chime saw its valuation take a hit during the pandemic and has since touted its AI adoption. Last year, cofounder Ryan King told Forbes that a Google-powered chatbot had automated about 70% of its 1.5 million monthly customer inquiries.
“A lot of fintech companies are leveraging AI,” Wells Fargo’s Nguyen says. “But it’s how they tell the story to the public that’s going to be the telltale here.”
Finally, investors should brace themselves for the possibility that opportunities to invest in AI could shrink if the market turns bearish as a result of the threat of tariffs under President Trump or other macroeconomic events. “I don’t know that it’s [automatic] the gold rush is going to begin,” says venture investor and political strategist Bradley Tusk.
In the meantime, there’s always Nvidia.
This article appears in the February/March 2025 issue of Fortune with the headline "Amid all the AI hype, these IPOs could be poised for long-term success."
