Invest in AI With an IRA: Why You’ll Likely Need a Self-Directed IRA (SDIRA)

If you’ve ever thought, “I want to own the next OpenAI before everyone else,” you’re not alone. More investors are looking for ways to invest in AI with an IRA, only to discover a modern investing challenge: the fastest-growing and most valuable AI companies are staying private longer than ever—and some may never go public. By the time these companies reach public markets, IRA investors often get access late, if at all.

This matters because a standard IRA at a brokerage firm usually gives you a familiar menu: stocks, ETFs, mutual funds, and bonds. But it doesn’t give you a practical way to invest in private companies, early-stage startups, or other pre-IPO opportunities.

If your goal is exposure to the next great American AI company before it hits the NYSE or Nasdaq, a Self-Directed IRA (SDIRA) is often the tool that makes that possible.

Below is a detailed guide on how SDIRAs work, why they matter for private AI investments, and what you need to know.

The New Reality: Unicorns Are Staying Private Longer

For decades, the classic wealth playbook looked like this:

• Company starts small
• It goes public
• Public investors participate in decades of growth

Today, many “unicorns”, private companies valued at over $1 billion — have the funding, revenue, and scale to stay private far longer than past generations of startups. Some even provide liquidity to employees and early investors through secondary transactions or tender offers without ever doing a traditional IPO.

Examples often discussed by investors:

• OpenAI (not publicly traded)
• SpaceX (mostly private; IPO plans remain uncertain)
• Anthropic (private; leadership has no immediate IPO plans)

If you meant “Anthropocene,” that’s a science term. In this context, the company is Anthropic, the AI company behind Claude.

Key takeaway: if a company stays private, a normal brokerage IRA can’t buy it because there is no ticker.

Why You Can’t Buy Private AI Companies on Wall Street

Buying a public company is easy: open your brokerage app and click Buy. Private companies work differently. They don’t trade on public exchanges. Shares may have transfer restrictions. Sales may only happen through company-approved programs or intermediaries. Many offerings are limited to accredited investors under Regulation D

So when people say you can’t buy OpenAI stock in a normal brokerage IRA, it’s not a conspiracy. It’s simply how private securities are structured and regulated.

How Investors Access Private Companies

How do investors gain exposure to private companies? Mostly through:

A) Venture capital or private equity funds
Invest in a fund that invests in private companies.

B) Direct private placements
Invest directly in a private company, often limited to accredited investors.

C) Secondary markets or tender offers
Buy shares from existing shareholders through approved channels, sometimes via secondary platforms like Forge or EquityZen.

Major financial institutions are acquiring private-market platforms to give clients more pre-IPO opportunities.

The catch for retirement investors: even with a legitimate private deal, your IRA needs a legal path to invest. That’s where a Self-Directed IRA comes in.

What Is a Self-Directed IRA (SDIRA)?

A Self-Directed IRA isn’t a new type of IRA in the way a Roth differs from a Traditional IRA.

Think of it like this:

• Traditional or Roth = tax treatment
• Self-directed = investment flexibility

An SDIRA is an IRA administered by a custodian that allows a broader range of investments, including alternative assets, as long as IRS rules are followed.

In plain language:

• Brokerage IRAs are built for public markets
• SDIRAs can hold both traditional and off-Wall-Street investments, like private equity and private placements

The IRS doesn’t provide a complete list of SDIRA-eligible assets. Custody and compliance are the keys.

SDIRA vs SD Roth IRA

A common confusion is the difference between a Traditional SDIRA and an SD Roth IRA:

Self-Directed IRA (Traditional SDIRA)

• Contributions may be deductible
• Growth is tax-deferred
• Distributions are taxed as ordinary income

Self-Directed Roth IRA (SD Roth IRA)

• Contributions are after-tax
• Growth can be tax-free
• Qualified distributions are tax-free

Both can hold private investments. If you want exposure to the next AI unicorn inside a retirement account:

• Choose Traditional SDIRA for tax deductions today
• Choose SD Roth IRA for potential tax-free long-term growth

Why an SDIRA Is the Right Way to Invest in AI With an IRA

A) Access growth earlier
Private markets often create value before IPOs.

B) Shelter upside in a retirement account
Dramatic growth inside an IRA can avoid annual taxation.

C) The Peter Thiel example
Peter Thiel bought early PayPal founder shares inside a Roth IRA. That IRA grew enormously. While most investors won’t see founder-level access, the lesson is clear: early-stage equity plus a Roth structure can be powerful.

How to Invest in Private Companies Through an SDIRA

Steps typically include:

1. Open an SDIRA with a custodian that allows alternative assets
2. Fund it (transfer, rollover, or contribution)
3. Identify the private investment (private placement, fund, SPV, or secondary opportunity)
4. Complete documents in the IRA’s name (or an IRA-owned LLC)
5. Custodian records and holds the investment

Two critical rules:

• Securities law compliance (accredited investor requirements)
• IRA prohibited transaction rules

Follow the rules carefully, especially if you have personal connections to the company.

Risks to Consider

Private AI investing has real risks:

• Illiquidity: you may not be able to sell quickly
• Valuation uncertainty: pricing can fluctuate sharply
• Transfer restrictions: approvals may be required
• Concentration risk: one investment can dominate your IRA
• Higher fees: layered fees in funds, SPVs, and secondaries
• Fraud risk: due diligence is essential

An SDIRA gives access but doesn’t make a bad investment good. The winning formula is access plus underwriting plus compliance.

The Bottom Line

Many of today’s most valuable companies are still private, and standard brokerage IRAs simply do not provide access to those opportunities. Investments such as private placements, venture funds, or secondary market transactions often require accredited investor status and a structure that can legally hold alternative assets. If your thesis is that you want IRA exposure to the next OpenAI or Anthropic, the simple truth is that a Self-Directed IRA is usually the only way to even have that option.