Is Databricks the last great AI pre-IPO bet? Clear Street thinks so

Fintech prime broker Clear Street has launched a platform that enables accredited investors to acquire pre-IPO shares in late-stage tech companies. The initiative allows investors to invest in an investment area that heretofore was reserved for only large institutions. Databricks, an AI and data software company with a valuation of $188 billion, is the first business to be introduced on this platform.

The platform is emblematic of a larger trend in AI investment. With the likes of Databricks, Anthropic, and OpenAI staying private longer than earlier tech behemoths, an increasing share of the value of the industry is being created before public debuts. Clear Street is betting that making this investing approach accessible will provide additional funds, although it is unclear whether this will spur AI innovation or lead only to higher private valuations.

Margin loans on private stakes set the platform apart

Chief Executive Officer and co-founder of Clear Street, Uri Cohen, said that the objective of the firm is “to remove friction and give more people the ability to invest in more products.” He claimed that a major part of making today’s wealth takes place in private markets and that demand from retail investors keeps growing.

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