North Carolina Treasurer passes on SpaceX citing valuation concerns; favors OpenAI, Anthropic

North Carolina State Treasurer Brad Briner said the pension fund is avoiding a direct SpaceX stake because the company's roughly $1.75 trillion to $1.8 trillion IPO valuation leaves little upside, even as the offering is set to price Thursday and begin trading Friday. The state instead has leaned into AI private markets, investing about $40 million in OpenAI and committing roughly $250 million to Anthropic, a position Briner said is now worth more than $600 million. North Carolina expects to gain SpaceX exposure later through public-market index funds rather than private ownership.

Analysis

The key signal is not that a single pension fund is passing on a headline IPO; it’s that large pools of capital are becoming more explicit about hurdle rates in a market where private-mark drawups have compressed future return potential. That tends to be bearish for late-stage private market liquidity broadly, because it forces sponsors to price exits closer to public-market discipline and reduces the odds that marginal buyers will step in at any valuation. The second-order effect is a widening gap between “strategic scarcity” and “financial scarcity”: companies with true cash-flow visibility will still clear, but narrative-driven assets may need a reset before institutions allocate meaningfully.

The more interesting relative-value signal is the contrast between AI software and frontier infrastructure. Capital is implicitly voting that near-term monetization and iteration speed matter more than absolute technological moat, which favors picks-and-shovels exposure to compute, cloud, and model distribution over capital-intensive platform bets with long-duration payoffs. If that preference persists, later-stage venture marks in AI could keep floating, but only for names that can translate product usage into revenue within 12-24 months; otherwise, valuation dispersion inside the AI complex should widen materially.

For SpaceX specifically, the public listing likely creates a trading overhang even if the business is exceptional. When an asset is already owned mainly by momentum and scarcity buyers, the IPO can function as a liquidity event that converts embedded optionality into benchmark risk, which may cap multiple expansion for several quarters. The contrarian risk is that index inclusion and passive demand absorb the float faster than skeptics expect; if so, the stock can remain disconnected from fundamentals for 3-6 months, but longer-term returns still look constrained unless growth re-accelerates into the listing.

Key Decisions for Investors

• Avoid chasing the IPO at launch; if we want exposure, wait 2-6 weeks for price discovery and look for post-inclusion volatility compression before initiating any position.
• Pair trade: long MSFT / GOOGL / AMZN versus short a basket of late-stage private-market proxies where valuation depends on continued mark-up rather than near-term cash flow; use a 3-6 month horizon.
• Overweight AI monetization beneficiaries over frontier model builders: consider long NVDA, ANET, or SNOW on pullbacks, with a 12-month view that favors companies converting AI demand into recognized revenue.
• Use the IPO as a signal to trim exposure to private-growth funds or secondaries whose NAVs imply continued multiple expansion; risk/reward worsens if institutional hurdle rates stay elevated.
• If shorting becomes feasible via derivatives, consider a defined-risk put spread after the first few days of trading rather than outright shorting, since passive flows may keep the name bid near term.