How You Can Get Exposure to OpenAI and Anthropic, and Why You Shouldn't

A lesson in paying the wrong price for the right asset

Retail investors, like myself, have been mostly sidelined in the AI trade, besides playing it through semiconductors, the mag-7, and the downstream effects of those two categories.

Until now. Fundrise, a company that began by democratizing access to large scale real estate investments, offered access to two of the premier AI labs, OpenAI and Anthropic, via their ‘Innovation Fund’ with the ticker VCX 0.00%↑

While the fund offers exposure to many other high profile private companies, the main excitement from retail investors has been the stakes in Anthropic and OpenAI. Below are the top 10 holdings by weight in the fund.

With both OpenAI and Anthropic at the top of the list, it’s easy to see why VCX 0.00%↑ has been bid up by retail investors. The problem is the level to which it’s been bid up.

The Net Asset Value (NAV) of this portfolio is $18.97/share, and retail investors have bid the fund up to $270/share as of writing this on Tuesday. This means the fund is currently trading over 14x the NAV of the assets it is meant to track.

The reason why? Well there is undeniably high retail demand for these AI companies, but more importantly for this specific phenomenon is that there is a massive supply/demand imbalance going on right now with VCX specifically.

The supply/demand issue is happening because:

“The majority of the fund’s shares remain subject to a lockup agreement. For the fund’s roughly 100,000 investors who bought prior to the market debut, VCX shares acquired before Feb. 20 are restricted from being sold for six months after the listing, the filings show.” (Investing.com)

This means that the float, or total shares being traded are extremely low, which means that this sort of ticker can be extremely volatile. As I’m writing this, it’s down to $258 from $270 just minutes ago.

Now obviously you don’t want to be invested in Anthropic/OpenAI through VCX right now as it’s just trading at such a premium to their NAV and it’s going to be highly volatile for the near term.

So, what can you do?

Well you can keep waiting, as Anthropic and OpenAI are expected to IPO this year, but obviously that may not happen depending on a myriad of factors.

What I am doing, and what you can do as well is have positions in large companies like Google, Amazon, and Microsoft, all of which are off the 52wk highs by a decent margin.

But if you wanted to bet on Anthropic specifically, and in a big way, I think Zoom ($ZM) is a good way to play it. They invested $51m in May of 2023 when Anthropic was valued at ~$4.5b. Since then, Baird estimates Zoom's stake is now worth $2–4 billion depending on dilution assumptions, against Anthropic's $380B valuation.

With all of that in consideration, Zoom’s stake in Anthropic is likely worth ~15-20% of their entire EV ($3.3b vs. $17b), meaning that they offer the most direct way to invest in Anthropic as it stands.

Obviously this means you will have to be exposed to Zoom in your portfolio, but I think this ownership stake will continue to dwarf their own business to the point where the stock will move significantly on news concerning Anthropic’s products, fundraising, and timeline for their IPO.

For direct ownership in OpenAI I think MSFT 0.00%↑ is the clearest as while its only ~5% of MSFT’s EV, they have ~27% ownership in OpenAI, so there’s significant upside once OpenAI IPOs.

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