German startup DeepL is planning to go public. The fast-growing competitor to Google Translate has reportedly more than doubled its valuation over the past year to around $5 billion. A potential IPO on the New York Stock Exchange could happen as early as 2026.
We’ve already seen the first two phases of the AI revolution: the development of chips, then infrastructure. This move symbolizes the arrival of the third phase of the AI revolution — companies that are building AI-powered applications directly for everyday users and businesses. For now, however, most of them remain privately held.
DeepL uses artificial intelligence to gain a deeper understanding of translation context, enabling more natural and accurate results. Users can edit and customize translations, which has helped DeepL gain popularity and market share. It is an example of how new AI applications are gradually taking market share from traditional tech giants, and similar stories are likely to multiply in the coming years.
AI startups are springing up like mushrooms, and investor interest in AI applications is enormous. This particular area of artificial intelligence might already be entering a bubble stage. Capital is flowing into anything with “AI” in its name. Over time, however, it will become clear which companies have real business potential and which will fade into obscurity.
AI industry IPOs this year have sent mixed signals. CoreWeave, an AI infrastructure provider, has surged 250% since going public in March. Figma, a design software company that is rapidly expanding its AI capabilities, jumped nearly 60% on its IPO day but has since fallen 41% from its debut.
Fermi, a data center operator, is the latest example of AI fever. The company is less than a year old and has no revenue, yet it was valued at over $12 billion. Its stock rose 30% on IPO day and is still holding above its initial price of $25 per share.
The market potential for an established company like DeepL is therefore enormous. In 2024, it reported revenues of $185 million and is expected to approach profitability soon.
Successful or not, all AI applications share one thing in common — they need computing power. This drives demand for companies such as Nvidia, AMD, Oracle, and even energy providers like Vistra and Constellation Energy.
On the stock market, we are still in the second phase of the AI revolution, as most publicly listed companies tied to AI are related to chips and infrastructure. Once that peaks, companies like DeepL, which use AI for specific tasks, will also join the capital markets and gradually take center stage.
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https://www.etoro.com/news-and-analysis/market-insights/deepl-ipo-could-mark-the-start-of-phase-three-of-the-ai/
