Here’s a sentence that should make anyone with a retirement account sit up straight: S&P Dow Jones Indices is considering dropping its profitability requirement and cutting its IPO waiting period in half — specifically so it can fast-track SpaceX, OpenAI, and Anthropic into the S&P 500.
The index that your 401(k) tracks is about to rewrite its rules to accommodate companies that have never made money. Let that sink in.
What’s changing
The S&P 500 currently requires companies to:
- Be profitable (GAAP) in the most recent quarter and the preceding four quarters combined
- Have been publicly traded for at least 12 months
- Have at least 50% of shares available for trading
Under the proposed changes, so-called “mega-cap” companies — those with market capitalizations of $200 billion or more — could join the S&P 500 as soon as six months after their IPO. The profitability requirement? Also under review, though S&P hasn’t explicitly said it would drop it for mega-IPOs.
S&P Dow Jones Indices’ own statement is remarkably candid: “MegaCap IPOs have the potential to achieve immediate and material investor ownership, trading liquidity, and market relevance.” In other words, these companies are too big to ignore — even if they’re too unprofitable to qualify under existing rules.
Why now: the $4 trillion IPO pipeline
SpaceX is targeting a $2 trillion valuation for its IPO, expected as early as June. Anthropic is in talks for a $900 billion valuation. OpenAI was recently valued at $852 billion. That’s nearly $4 trillion in combined value heading for public markets this year.
Index providers are scrambling because their current rules would lock these mega-IPOs out for at least a year — and potentially longer if they’re not yet profitable. That’s a problem when your benchmark is supposed to represent “the market” and the market’s biggest new companies can’t get in.
S&P is soliciting comments until May 28, with potential implementation by June 8. Not coincidentally, that’s right before the SpaceX IPO window opens.
Your retirement money, redirected
Here’s the part that affects you even if you’ve never bought an individual stock: approximately $24 trillion is invested in S&P 500-tracking funds. When a company joins the index, passive funds are forced to buy it. Not because fund managers think it’s a good investment. Because the index says so.
If SpaceX, Anthropic, and OpenAI all get fast-tracked into the S&P 500, billions of dollars from retirement accounts, pension funds, and index-tracking ETFs will flow into these companies automatically. No due diligence. No risk assessment. No choice.
This is what index inclusion means in 2026: your retirement savings become passive capital for whatever the AI industry decides to IPO.
The profitability problem
Let’s be direct. These companies are rewriting index rules because AI’s biggest companies can’t meet the old ones. The S&P 500’s profitability requirement exists for a reason — it was added after the dot-com bust, when unprofitable companies inflated the index and then collapsed, taking retail investors’ savings with them.
OpenAI reportedly loses money on every dollar of revenue. Anthropic’s $380 billion valuation rests on a fraction of the revenue that would traditionally justify it. SpaceX, while generating revenue, has a business model that depends on government contracts and a Mars colonization vision that’s decades from profitability.
Removing the profitability gate because these companies are “too big to exclude” isn’t index management. It’s risk management theater — the appearance of prudence while abandoning the substance.
New Zealand angle
For NZ investors, this matters because our KiwiSaver default funds are heavily weighted toward international index funds. If you’re in a diversified or growth KiwiSaver fund, there’s a high probability your money tracks the S&P 500. When these AI mega-IPOs join the index, NZ retirement savings will flow into them just as automatically as American ones.
The NZ Super Fund, which manages over $70 billion, also uses passive index strategies for a portion of its portfolio. The same automatic allocation applies.
🔍 THE BOTTOM LINE
The S&P 500 isn’t just a benchmark — it’s the plumbing of the global retirement system. When you change the rules to let unprofitable AI companies into that system faster, you’re not democratizing access. You’re socializing risk. Retail investors didn’t ask for this exposure. Index fund managers didn’t choose these stocks. The rules are being rewritten because the AI industry needs passive capital to sustain valuations that active investors won’t pay.
The dot-com bust taught index providers to demand profitability. Apparently, that lesson has an expiry date — and it’s June 2026.
Sources
- Motley Fool: SpaceX, Anthropic, and OpenAI Could Be Fast-Tracked Into the S&P 500
- Bloomberg Law: S&P Weighs Rule Changes That Would Speed SpaceX S&P 500 Entry
- Reuters: S&P Dow Jones Indices considers new index rules as mega IPOs loom
- Stocktwits: S&P Joins Nasdaq, Russell In Push To Speed Index Entry For Mega IPOs
