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Here’s a quick explanation for those who have their IRA’s and 401Ks in these large stock market indexes:

There are two main rules for a public company to get into the S&P indexes.

First, it has to make money. Before inclusion, the company must be profitable in both the most recent quarter and the sum of the past four quarters.

Second, it has to be public for at least one year (aka the “seasoning period”).

Both rules are going into the dumpster on June 8. After a recent consultation, S&P Dow Jones decided to waive the profitability requirement and cut the seasoning period to six months.

What’s surprising is that this isn’t a universal rule. The waiver only applies to mega caps, most of which are Big Tech.

That means ETFs tracking S&P indexes could soon be forced to buy large, unprofitable tech companies. Those include the S&P 500, S&P MidCap 400, S&P SmallCap 600, S&P Composite 1500, and a few others.

What’s even more surprising is the timing. The rule will go into effect only days before SpaceX’s IPO. OpenAI and Anthropic could also get a shot at the waiver later this year.

This also comes after Nasdaq adopted its own “Fast Entry” rule in March, allowing large IPOs to enter the Nasdaq-100 after just 15 trading days. That rule became effective May 1.

That means many ETFs will soon be forced buyers of giant, unprofitable tech companies immediately after they go public.

Now all conspiracy theories aside, this move points to another big change in the market: This is the end of Big Tech as we know it.

For most of this century, Big Tech was a low-capex, high-margin sector that could grow fast, carry little debt, and consistently increase earnings.

AI broke that story. Now tech has little choice but to spend hundreds of billions just to keep up. Even Google is issuing equity and diluting shareholders to bankroll its AI infrastructure.

In other words, tech companies have gone from printing money to burning it. And index providers are likely adjusting in advance to keep passive ETF money flowing.