Dragoman Digest

Tech giants eye public markets as private capital reaches its limits
Listing would provide deeper funding pools but subject firms to unfamiliar scrutiny
US companies SpaceX, OpenAI, and Anthropic are preparing for IPOs that would rank among the largest in history, with SpaceX alone poised to become the largest public listing ever. SpaceX is currently valued at US$800 billion and OpenAI at US$500 billion in private markets, while Anthropic is seeking a valuation of US$350 billion in ongoing funding talks. Even then, their capital requirements continue to grow, and private markets are struggling to keep pace: after swelling at 10 percent annually between 2012 and 2021, global private assets under management have now plateaued at just over US$20 trillion. OpenAI’s latest funding round of US$40 billion required contributions so substantial that one investor described such deals as having “gone from a VC investment to a stock investment”. Public equity markets, with US$130 trillion in global capitalisation, offer deeper capital pools.

Public markets, however, demand levels of scrutiny that these firms have largely avoided to date. SpaceX has operated for more than two decades as a private company, and founder Elon Musk’s fractious record with regulators and shareholders at Tesla suggests the transition to public markets will prove uncomfortable. For OpenAI and Anthropic, the challenge is more fundamental: neither is close to profitability. OpenAI is expected to post a net loss of around US$12 billion this year and anticipates burning through US$115 billion before turning a profit in 2030. Anthropic projects breaking even a couple of years earlier but will still consume billions in the interim. In contrast, Facebook and Google were already generating substantial profits with defensible market positions before their listings.

For OpenAI and Anthropic, listing may be necessary to survive the competitive onslaught. Google poses a formidable threat, combining frontier model capabilities with unmatched data and distribution, and the capitalisation to sustain investment indefinitely. OpenAI recently declared a companywide “code red” after Google’s Gemini surpassed its models on industry benchmarks. Public market reception will test whether current valuations can survive both scrutiny and the shadow of better-resourced rivals.


Robotaxis reach commercial scale after decades of development
Cheaper Chinese vehicles and premium US valuations reflect competing visions for an industry yet to turn a profit
US robotaxi leader Waymo, a subsidiary of Google parent Alphabet, now completes nearly one million fully autonomous rides across five US cities every week. Cumulative trips are approaching 20 million. Chinese leader Baidu has surpassed 17 million rides; commercial robotaxi services now operate in at least 10 Chinese cities. These figures demonstrate operational progress for an industry long synonymous with unfulfilled promises. Chinese firms have built significant cost advantages – Baidu’s RT6 robotaxi costs approximately US$35,000 compared with US$130,000-200,000 for Waymo’s vehicles. Investors remain sceptical. Shares in Chinese robotaxi operators Pony.ai and WeRide have fallen since their November Hong Kong listings. Meanwhile, Tesla trades at over 200 times forward earnings, predicated largely on unproven robotaxi and robotics capabilities.

The valuation disparity reflects competing visions for the industry’s future. Chinese investors view autonomous driving as a hardware-intensive mobility service and are wary after earlier failures in bike-sharing and delivery robots. US markets are pricing in software-platform potential: the prospect of high-margin recurring revenue from licensing self-driving technology to carmakers and logistics firms. Neither approach has yet proved commercially profitable. Robotaxis are estimated to cost US$7-9 per mile to operate versus US$2-3 for traditional ride-hailing services like Uber, with industry-wide costs projected to take a decade to fall below US$2 per mile. China’s mature automotive supply chain has driven down vehicle costs across the board, yet low domestic taxi fares mean Chinese operators still struggle to generate returns.

Blocked from operating in the US under Biden-era restrictions, Chinese operators are targeting Europe and the Middle East where higher fares offer better returns. London will become the first city where US and Chinese robotaxis compete directly, with both Waymo and Baidu planning 2026 launches. Chinese operators are also deploying in Dubai and Abu Dhabi, where welcoming regulatory regimes have eased entry. For an industry yet to turn a profit, early international footholds may prove decisive.


China expands Belt and Road as global capital flows reorientate
Beijing pivots BRI from infrastructure to energy and mining
China’s renewed expansion of the Belt and Road Initiative (BRI) is being driven by a surge in large, resource-focused overseas projects. Recent data shows a sharp increase in financing for energy, mining, and power infrastructure in 2025, marking the strongest year of BRI activity since the pandemic slowdown. Around 350 deals were signed last year, up from 293 in 2024, with total financing rising by roughly 75 percent to more than US$210 billion. Energy projects accounted for the largest share of new investment, spanning oil and gas, electricity grids, and renewables. Projects in metals and mining also showed strong growth, reflecting a shift away from major infrastructure projects. Data from the Rhodium Group shows that more than 85 percent of outbound Chinese investment in 2025, including through the BRI, was in greenfield projects. Many of the largest deals now involve integrated projects combining extraction, processing, and power generation in a single investment package.

At a more systemic level, the resurgence of the BRI reflects widely diverging global capital flows. In the first half of 2025, China overtook the US as the world’s largest source of outbound investment, accounting for roughly 10 percent of global flows. Concurrently, the US absorbed around 20 percent of global inbound investment as tariffs, industrial policy, and political pressure pulled capital onshore. Chinese firms are being pushed abroad by weak domestic demand, deflationary pressures, and a growing number of trade barriers. At the same time, Beijing has no intention of allowing the US and EU to dilute its control over global minerals and metals supply chains. As a result, these dynamics are likely structural rather than cyclical, marking an accelerating reordering of the global investment landscape.


Brazil and the US test a rare earths partnership
Washington looks to Brazil as a non-Chinese anchor in critical mineral supply chains
The US and Brazil are in advanced discussions to develop Brazil’s rare earth sector, reflecting a widening US effort to alleviate dependence on China for key critical minerals. Brazil holds one of the world’s largest rare earth resource bases, estimated at roughly 20-23 percent of global reserves. However, production remains limited due to regulatory complexity, underdeveloped processing capacity, and prolonged underinvestment. The talks are unfolding against the backdrop of China’s dominance in rare earth processing, particularly heavy rare earths, which are required for permanent magnets used in EV motors, wind turbines, and advanced defence systems.

China’s control over the majority of global heavy rare earth separation and refining capacity represents a critical chokepoint, amplified by the geological scarcity of heavy rare earth deposits. This makes Brazil, which has sizeable reserves of heavy rare earths such as dysprosium and terbium, one of the few credible non-Chinese alternatives with scale. The discussions fit within a broader US strategy to diversify critical mineral supply chains, and build on parallel initiatives with Australia and the Democratic Republic of Congo.

The easing of tensions between President Trump and President Lula has generated additional momentum in the talks. The US is mobilising public financing, with the Development Finance Corporation approving a US$465 million loan last year to Serra Verde, Brazil’s only operational rare earths mine. Serra Verde, which has existing offtake agreements with Chinese companies, will use the loan to upgrade production which will be available to US and allied customers.