Chinese and U.S. AI firms rush to IPO, crypto awaits opportunity

Author: Connor Dempsey

Compiled by: DeepChain TechFlow

DeepChain Summary: Connor Dempsey, a seasoned professional in the crypto industry with prior roles at Circle, Messari, and Coinbase Ventures, currently leads marketing at Crossmint. In this commentary, he presents the view that under China’s “common prosperity” framework, AI companies are being encouraged to go public at reasonable valuations, while their U.S. counterparts won’t IPO until late 2026—when their valuations could be 100 times higher. The wave of AI IPOs will continue to draw market capital away, putting short-term pressure on crypto, but 2026 may be a strong year for early-stage investments.

Body:

A wave of Chinese AI companies' IPOs is coming, and it will last 1-2 years.

And their valuations are more attractive than those of their U.S. counterparts.

Disclaimer: The following content comes from a conversation I had with an old friend familiar with the Chinese market (the Chinese market is essentially a black box to me).

China's AI development speed is as fast as that of the United States. However, China has stronger control over the private sector and is more concerned about income inequality.

The logic is this: AI is a winner-takes-all game. The longer a company remains private, the more wealth becomes concentrated in the hands of a few entrepreneurs and investors.

China's policies have pressured rapidly growing AI companies to go public earlier, allowing retail investors to share in the rewards.

MiniMax (AI video generation) and Zhipu (China’s OpenAI) have already gone public. Moonshot AI (chatbot), Baichuan Intelligence (medical AI), and Kunlun芯, a subsidiary of Baidu, are all in line, with IPO valuations ranging from $2 billion to $7 billion, which is reasonable. DeepSeek is the only exception, claiming it will continue to remain privately funded.

As a Westerner, I’m not trying to take China’s side, but this logic makes sense. American AI giants won’t distribute wealth of equal magnitude to the public.

The U.S. is also experiencing a wave of AI IPOs, expected to launch between late 2026 and early 2027. OpenAI, Anthropic, Databricks, Perplexity, and Elon Musk’s xAI (after merging with SpaceX) are likely to go public within this timeframe.

But by the time retail investors can buy them, these companies’ valuations may be 100 times those of their Chinese counterparts.

OpenAI and Anthropic are likely to be valued in the hundreds of billions when they go public. Databricks and xAI are already worth over $100 billion.

No matter how it ultimately evolves, the U.S.-China AI race will proceed at full speed and may drain the air from all other technology sectors, including crypto.

Why? Because AI is the most important technology of our lifetime. If you're a capital allocator, it's extremely difficult to look elsewhere. For example, if you have $1 million to deploy, you'll most likely find a way to ride this AI wave.

As long as the AI IPO frenzy continues, cryptocurrency asset prices are likely to face downward pressure.

Venture capital in the crypto space has clearly slowed down. I recently met a founder raising funds in crypto who observed: if you're not building in AI, most investors aren't interested.

Emotions hitting rock bottom and investors losing interest—this is nothing new for crypto. For example, after the ICO bubble burst in 2018, most of the investing public became indifferent to crypto for a full two years.

But if you were an early investor during that period, you did extremely well. You invested in the seed rounds of Solana, Compound, and Uniswap, and Circle launched USDC in 2018 during that same time.

I believe 2026 could yield a similarly strong year for those who deployed early capital in the crypto space.

Meanwhile, U.S. cryptocurrency regulation is becoming clearer, and infrastructure development for tokenizing financial markets is underway.

Protocols like Hyperliquid have begun spilling over into traditional markets, offering 24/7 crude oil futures trading during weekends when traditional markets are closed (see Syncracy’s “The Great Perpification”).

Although there are fewer crypto founders today, new and interesting companies are still launching. For example, Ryan Yi, with four years of venture capital and corporate development experience at Coinbase, founded Onchain Group, essentially an investment bank built for token economies. Think of it as traditional M&A, but with tokens as the assets and the largest protocols in crypto as clients.

Although AI has sucked the air out of the room when it comes to investment, it will ultimately become the rocket fuel for crypto utility.

Cryptocurrency has always had user experience issues. Combining an AI frontend with a crypto backend will make using crypto suddenly as simple as using Claude or ChatGPT. This will ultimately become the mass entry point for crypto assets and protocols.

AI agents are also expected to become the largest user group in crypto. Commerce between agents—millions of AI agents autonomously trading without human intervention—is one of the strongest use cases for stablecoins and blockchains. When millions of agents need to create wallets and execute transactions costing fractions of a cent, traditional card networks collapse. Crypto does not.

I bet the integration of crypto and AI will be a major development in its mature phase—and one of the most significant phenomena to watch in this industry's history.

~CD