Americans overwhelmingly distrust artificial intelligence. Eight in ten report concern about where AI is heading, while only a third express excitement. More than half believe it will cause more harm than good in their daily lives. Seven out of ten think it will destroy jobs.
Yet whether they like it or not, their financial futures are about to become deeply entangled with AI's explosive growth. A massive wave of technology company IPOs is about to force ordinary Americans into massive bets on AI through their retirement accounts and index funds, whether they consent or not.
SpaceX kicks things off this week with a $75 billion initial public offering, the largest in history. At $135 per share, the company will be valued at $1.77 trillion, placing it among the world's ten largest firms by market value. Despite generating most revenue from internet access services, SpaceX largely needs the capital to fund Elon Musk's sprawling AI ambitions, which include launching data centers into orbit.
Two more AI giants are already in the pipeline. Both Anthropic and OpenAI have filed paperwork for their own IPOs later this year, adding two multitrillion-dollar artificial intelligence companies to America's major stock indices.
The mechanism that forces this exposure on unwilling investors is straightforward. Most Americans hold index funds through their 401(k) plans, marketed as safer investments that passively track the broader market. When major companies join indices like the Nasdaq or S&P 500, these index funds are forced to buy their shares proportionally, regardless of price or investor preference.
Musk has been pressing for SpaceX's rapid inclusion in major indices. The Nasdaq already changed its rules to expedite listings of massive companies like SpaceX. The FTSE Russell did the same for its US indices. Standard & Poor's is holding firm to its existing standards, which means SpaceX must first demonstrate profitability, make a minimum stake publicly available, and wait roughly a year before joining the S&P 500.
The current offering represents less than 5 percent of SpaceX's total shares. But if the company follows typical patterns for large firms post-IPO, roughly half its shares could be trading publicly by the time it reaches the S&P 500 next year. That would give SpaceX about 1.5 percent of the S&P 500's total market value of more than $60 trillion, forcing index funds to pump hundreds of billions into Musk's drive toward becoming the world's first trillionaire.
The risk here is substantial. Musk, whose recent ventures have included wholesale federal employee firings and dismantling foreign aid despite knowing it would cause hundreds of thousands of deaths, will maintain sole control over a company upon which millions of Americans' retirements depend. He will be free to pursue his instincts wherever they lead, with virtually no government oversight.
The problem extends far beyond SpaceX alone. Seven mega-cap tech firms already account for more than a third of the S&P 500's entire market value. Nvidia, Alphabet, Apple, Amazon, Microsoft, Meta, and Tesla have collectively driven the stock market's ups and downs through their massive AI spending. Adding SpaceX, OpenAI, and Anthropic to this group will give tech billionaires an even tighter stranglehold on American retirement security as they chase their most ambitious technological fantasies.
There is a potential upside. Workers displaced by AI might benefit from owning AI stock in their retirement accounts, giving them a financial stake in the productivity gains from automation. But the risk calculus points the wrong way. While AI advocates promise transformative economic growth, the technology has not yet delivered meaningful productivity improvements that justify these astronomical valuations. Optimistic claims about AI progress flood the headlines, but real economic gains remain elusive.
Stock markets can shift quickly. The Nasdaq recently dropped more than 4 percent when stronger-than-expected employment data suggested the Federal Reserve might raise interest rates, shaking the AI enthusiasm that has driven gains over the past year. This should be a sobering reminder that the AI boom propping up the market could collapse suddenly, potentially devastating ordinary Americans' retirement accounts.
Most Americans have no idea what an AI-dominated future actually holds. But they remember the 2008 financial crisis vividly. If the AI bet embedded in their investment portfolios turns sour, the economic damage will make that disaster look trivial by comparison.
Author James Rodriguez: "Americans are being forced into one of the largest leveraged bets in financial history, and they never got asked for permission."
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