Elon Musk's trillion-dollar-plus SpaceX isn't a public company yet, but its size and ambitions are already upending the stock market and sparking questions over the power and influence wielded by such behemoths.

Why it matters: The IPO, expected next month, would signal the start of a new AI era for the public markets, potentially valuing SpaceX as much as $2 trillion.

The big picture: OpenAI and Anthropic are also expected to IPO this year — possibly translating into $5 trillion in value in the markets, estimates venture capitalist and MIT research fellow Paul Kedrosky.

The new stocks will hit the markets like a tsunami, he says.
The IPOs will trigger an enormous wave of demand from investors who will pull money out of other assets to buy — sort of like how the ocean pulls back before it crashes over the beach and into the surrounding area upending everything.
The "scale and consequences" will be massive, he says.

The latest: The S&P 500 is considering changing its rules to fast-track SpaceX's inclusion into the benchmark index.

If that happened, it would guarantee lots of buyers for the stock — index funds, which make up an increasingly large share of the market, would effectively be forced to invest.

Friction point: Critics say the changes are unfair and distort the stock market.

"The rules are being rewritten to benefit IPO issuers and early-stage insiders, and your capital is the tool being USED to enrich them," writes long-time investor George Noble on Substack.
The proposal is "egregious," argues WSJ columnist James Mackintosh, saying that it is an acknowledgement that there are different rules for the big companies.

Yes, but: The market is changing to accommodate these mega IPOs, not because of some conspiracy, but because the indexes want to reflect reality.

"Investors want indexes to be representative of the market," says Jay Ritter, the director of the IPO initiative at Warrington College of Business at the University of Florida.
"These companies likely would be included sooner or later unless they totally collapse, so it's mainly a question of timing."

Catch up quick: Nasdaq has already changed its rules for SpaceX to allow for fast-tracking onto the Nasdaq 100 index, which features the biggest tech companies.

Where it stands: The S&P is considering changing the rules for companies it calls "MegaCaps," defined as those with a value that puts it within the top 100 largest by market capitalization. The three proposed changes are:

There would no longer be a requirement that a company be profitable. (We'll know if SpaceX is profitable or not when its prospectus is made public.)
The 12-month wait to get included on the index would be cut to six months.
A requirement that a company needs to offer up at least 10% of its stock to the public would be eliminated. (SpaceX reportedly will have just a 5% float.)

Follow the money: In the 1980s and '90s, most companies that went public were profitable. But in this century, most haven't been, Ritter says.

"Some of these rules were decided on many decades ago, when the world was a bit different from now."

What to watch: If the proposed rule changes are approved by the May 28 deadline, they would take effect before the market opens on June 8, presumably ahead of the IPO.