Note that index funds don't hold companies in proportion to their market cap, but in proportion to their free float (shares available to purchase on the market).

Both SpaceX and OpenAI's estimated free float are around 4-5% of their shares at IPO. This means that we really are talking about companies in the sub $100M valuation in term of index fund impact (assuming under $2T for each).

Collectively, Alphabet (Google), Amazon, Microsoft, and Nvidia already own approximately 25 - 35% of OpenAI and Anthropic respectively. They already are a part of your portfolio.

What will managed funds do?

Are we now suggesting people get out of index funds?

Worse, will this and spacex ipo destroy the index funds?

Afaik, Nasdaq removed the seasoning rules to include it from the start, S&P would usually be only a year after IPO but they are also discussing changes

So these extremely risky companies will become a big part of American retirement funds.

I am sure nothing bad will happen

Upside of robo advisors?

ETFs are a trap. Put most of your money in single stocks. It is ok to diversify, you don't need an ETF for this.