Wealthy investors who bought into private artificial-intelligence companies ahead of this year's blockbuster listings may still see strong returns, but Tom Ruggie, founder and CEO of Florida-based Destiny Family Office and its affiliated RIA, Destiny Wealth Partners, expects a bubble to form after the wave of IPOs. He predicts a "feeding frenzy" when major private AI firms like Anthropic and OpenAI hit the public market, driven by fear of missing out and euphoric optimism.
"I think we have a period of time where AI related investments are going to go gangbusters," Ruggie said. "What I anticipate having is a feeding frenzy where everybody has kind of the fear of missing out and you get that euphoric optimism and everybody's trying to invest. In my opinion … a bubble is going to be created." He does not believe markets are in a bubble yet, but he draws parallels to the dot-com era, where a hockey-stick rise was followed by a sharp correction.
The IPO pipeline is already active. SpaceX began trading on the Nasdaq on June 12 after raising $75 billion in the largest IPO on record. Anthropic confidentially submitted a draft registration statement to the SEC on June 1 and could list as soon as November, according to a Bloomberg report citing The New York Times. OpenAI CEO Sam Altman told Fortune on Sept. 11 that the ChatGPT maker will not go public this year.
Ruggie argues that valuations of public AI leaders like Nvidia are still supported by fundamentals. "The fundamentals, the valuation behind Nvidia based on how they're growing is not out of whack at all," he said. He gives the rally another 12 to 18 months, including pullbacks, and predicts Anthropic will be "the most successful public company perhaps ever."
However, the window for pre-IPO investments has closed, according to Ruggie. "I think we've passed the optimal time," he said. Destiny's deal pipeline is thinner than a year ago, and new deals now face stricter scrutiny. "If I don't see a window where a company realistically could go public or get purchased by another company within the next 12 to 18 months, we're pulling the reins back on those offerings," he added.
Pre-IPO offerings are not registered with the SEC, which warns that buyers risk losing their entire investment. Dean Rubino, CEO of KPC Private Funds, told InvestmentNews in July that advisors gain an edge through institutional-grade access rather than chasing pre-IPO deals directly. Related concerns have surfaced in regulatory actions, such as the SEC suit against Meyer Global for allegedly misusing $1.27 million from SpaceX and OpenAI fund investors.
As private holdings go public, Ruggie will recommend that clients at least take their initial investment off the table, which after big gains may amount to "5 or 10% of the entire value." A broader cut could follow, including the Magnificent Seven stocks. "Within the portfolios we're managing, I'm just going to enact taking 20, 30, maybe even as high as 40% of chips off the table," he said. "And if history serves as any indication of what's going to happen, I'm going to be early."
Being early carries its own headache, as clients may bristle when markets keep climbing after a sale. "I'm not a go-to-cash guy," Ruggie said. "If I'm wrong, we're still participating some, but if I'm right, we're still going to get hit on some, but we're also going to have a significant amount of dry powder on the sidelines." He advocates a balanced mentality, telling advisors not to get too upset when things go poorly or too euphoric when they go well.
For advisors navigating this environment, Ruggie's approach underscores the importance of disciplined rebalancing. As Arch expands its AI diligence tools, family offices and RIAs are increasingly relying on data-driven methods to time exits. The coming months will test whether Ruggie's caution is prescient or premature.
