Episode summary
A16Z's David George on How Private and Public Markets Fused Into One | Odd Lots
Odd Lots
· · 49 min · Hosts: Tracy Alloway, Joe Weisenthal · Guests: David George
Summary
David George argued that the private markets have become deep enough and liquid enough to let the biggest technology companies stay private far longer than they used to. He said highly valued private tech companies now represent about $5 trillion of market cap, that the top 10 private companies make up 40% of that, and that the private-market pool has grown 10x in 10 years while the number of public companies has roughly halved over 20 years. In his view, the result is that the best growth opportunities are increasingly private, not public.
He said the main reasons companies delay IPOs are structural: private capital is easier to access, founders can use tender offers to provide employee liquidity, and private ownership can reduce volatility and simplify employee management. He also said public markets are harder for smaller or faster-growing companies to satisfy, because of reporting costs, less analyst attention, and a tendency for public investors to underwrite high-growth companies too conservatively.
George was optimistic on AI, saying demand is extremely strong and that infrastructure spending is being matched to usage rather than built blindly. He also argued that legacy software companies face a tougher future because new AI spending is taking budget first, and that the business-model shift toward outcome-based pricing could favor newer vendors over incumbents.
Key takeaways
- George said private tech companies now represent about $5 trillion of market cap, making the private market a major venue for growth investing.
- He argued the private market’s deeper capital base and tender offers reduce the pressure for companies like SpaceX and OpenAI to IPO early.
- He said public-market investors often undervalue hypergrowth, which can make a 60% growth company worth 3x to 4x more than the market implies.
- George expects AI spending to keep favoring private companies for now because demand is real and infrastructure can be scaled in roughly 12-month cycles.
- He warned that legacy software vendors face pressure as new AI budgets take priority and business models move from seats and subscriptions toward outcomes.
Notable quotes
“highly valued technology companies represent about $5 trillion of market cap in the private markets”
“the private capital markets are deeper and more liquid than before”
“If you're one of a select few that can access capital, you know, in the private markets cheaply, you can kind of steadily control the stock price movements”
“only three companies in our universe in the public markets are actually growing greater than 30%”
“If you take our portfolio on average it's growing 100%. And we invested at 21 times revenue”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news. — Hello and welcome to another episode of the OddLots podcast. I'm Jill Weisenthal — And I'm Tracy Aloway. Tracy, it feels like 2026 could be a big year for some mega IPOs that have been private for a while. There's talk about a SpaceX IPO, possibly maybe some of the big AI labs. Like some pretty massive companies that might be uh hitting the market soon.
Someone recently gave me a Facebook IPO hat from JP Morgan when they worked on it. Like I'm very proud. I need to start wearing it around the office. — Yeah, I remember. — But that was like that was a mega IPO. There was a mega
At the time and there was so much hype about it and then like technical difficulties and — So many people eager to get in on that one. — It's so many funny people called that a flop I guess because the technical difficulties and it didn't do that great for a little bit. That would have been a great time to buy it.
Yeah. And seriously,
The interesting thing about the um market or one of the interesting things about the market is you have these companies that are going to IPO when they're already gigantic. So like people point out that in earlier eras they might have IPOed when they're like billion-dollar companies and now they're like octicorns or whatever. And then you have other companies that are also enormous and there's no it's not clear that they're going to IPO at all.
You know I saw a headline about Stripe perhaps raising more money. People been they could have probably IPOed years ago. And one of the questions I have is are companies choosing not to IPO or delaying IPO because the public market is not that fun or because the private market has gotten so much richer, so much more liquid, etc.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ipo outlook
- private vs public markets
- ai disruption trade
- growth investing
- liquidity in private markets
Companies and tickers mentioned
- Anthropic
- SpaceX
- OpenAI
- Databricks
- Stripe
- Andreessen Horowitz
- Kavak
Watch the episode
Watch “A16Z's David George on How Private and Public Markets Fused Into One | Odd Lots” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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