Key Takeaways

  • American mutual funds face legal caps on illiquid holdings, meaning massive private marks in SpaceX and Anthropic freeze their ability to back other private tech companies.
  • Public market debuts by Anthropic and SpaceX will instantly convert those private stakes into liquid public equities, freeing up billions in fresh allocation power across firms like Capital Research, T. Rowe Price, MSAM, and Franklin Templeton.
  • Sovereign wealth funds in the Gulf Cooperation Council, led by UAE entities like MGX and Mubadala, are stepping in to underwrite multi-billion-dollar compute deals, including Crusoe alongside Atreides Management and Valor.
  • Hyperscalers and neoclouds are generating accelerating high-margin revenue, which will allow them to finance much of the 2027 compute buildout out of operating cash flow instead of new external debt.

The Mutual Fund Liquidity Trap

Everyone tracks whether the public markets are receptive to tech IPOs. Almost nobody tracks what those listings do to the back offices of traditional mutual funds. American mutual funds operate under strict regulatory limits that cap the percentage of illiquid assets they can hold in a portfolio. Over the last decade, asset managers like Capital Research, T. Rowe Price, Morgan Stanley Asset Management, Goldman Sachs Asset Management, and Franklin Templeton bought aggressively into elite private startups.

When positions like SpaceX and Anthropic balloon in valuation, they eat up the legal ceiling for illiquid assets inside those funds. The managers cannot write new private checks, not because they dislike growth assets, but because securities laws forbid them from holding more illiquid paper. Baker explains the dynamic plainly: “SpaceX and Anthropic going public is actually going to free up a huge amount of buying power in private markets once those are fully unlocked.”

As soon as SpaceX and Anthropic begin trading publicly, those shares turn liquid. The illiquid asset tally drops instantly on mutual fund balance sheets. That mechanical shift unblocks a massive reservoir of growth-stage capital. The late-stage private market has felt sluggish for two years partly because these traditional institutions were balance-sheet constrained. Once their biggest winners exit onto public exchanges, they have structural headroom to buy into private rounds again.

Sovereign Wealth and the 2027 Compute Stack

While mutual funds wait for IPO liquidity, the financing structure of AI hardware is changing. The capital required to build data centers for 2026 and 2027 exceeds standard venture syndicates. Sovereign wealth funds from the Gulf Cooperation Council, specifically the United Arab Emirates, have stepped up to bridge the gap. Baker points to vehicles like MGX and Mubadala as active balance sheets: "Atreides and Valor, we co-led Crusoe with Mubadala."

Yet Baker argues that reliance on external debt and sovereign balance sheets may be approaching its ceiling. Hyperscalers and neoclouds are experiencing rapid cloud revenue expansion that drops directly to the bottom line at high margins. That incoming cash flow gives compute operators the ability to self-fund future server orders. As Baker notes: “Operating cash flow is following and then you're going to be able to, I think, finance probably more than people think of the 2027 buildout out of cash flow. I don't know if we've seen the peak of external financing, but I think we're getting close.”

What to Do With This

If you run a growth-stage company planning a fundraise within 18 months, build an institutional target list that includes mutual fund crossover desks, not just traditional venture firms. Map which asset managers hold large marks in pre-IPO giants like Anthropic and SpaceX, because their checkbooks will open the moment those listings settle. Concurrently, audit your unit economics to show how internal cash generation will fund your server commitments by 2027, rather than assuming external compute credit lines will remain open indefinitely.