Anthropic to test Wall Street's AI fervour with $1.4t IPO valuation target

Anthropic's planned initial public offering is set to value the Claude developer at up to $1.4 trillion on a fully diluted basis, a level slightly below some investors' earlier expectations and a test of Wall Street's appetite for AI companies after a recent cooling in investor enthusiasm. According to Reuters, the company and some of its investors aim to raise up to $64.4 billion by selling 825 million shares at up to $78 each. Anthropic will also raise $26 billion through a separate private placement with cornerstone investors including Google, Nvidia and Advanced Micro Devices. Including cornerstone commitments from Broadcom, Micron Technology, Microsoft and TSMC, the offering could raise up to $90.4 billion in total. Certain Anthropic board members and affiliated entities have indicated interest in buying up to $303 million of shares.

Preliminary terms circulated to investment banks on Monday, showing about 867 million shares at up to $80 apiece and potential proceeds of up to $69.3 billion, were retracted before the company filed an updated prospectus with the SEC on Tuesday. The filed prospectus set a lower price range and reduced targeted proceeds. Investors had previously discussed valuations as high as $2 trillion, but expectations have come down given Anthropic's substantial infrastructure commitments and recent volatility in AI-related stocks. Reuters previously reported that $1.5 trillion was viewed as the high end of the range.

Financially, Anthropic reported run-rate revenue of roughly $81 billion as of October 31, according to the filing. Third-quarter revenue rose 47% from the prior quarter to $16.96 billion, though growth slowed from a 144% surge in the previous quarter, and the company's net loss narrowed. Growth has been driven by adoption of Claude, including products aimed at healthcare, financial services and legal services. Against this, the company's roughly $900 billion in computing commitments, some dependent on financing outside its control, underline the spending pressures investors are scrutinizing. Ipek Ozkardeskaya of Swissquote Bank said investors are increasingly focused on the cost of generating growth.

The prospectus also warned that its models could behave in unintended or harmful ways, and that competitors could gain an edge by developing models faster. Anthropic adopted the term "Super Intelligence" at several points in the filing, which also outlined existential risks alongside its vision of an "age of miracles." The offering follows SpaceX's $75 billion IPO in June at a valuation of nearly $1.75 trillion. Anthropic was last valued at $965 billion in a private round, with investors including Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital. The company, led by CEO Dario Amodei, is expected to list on the Nasdaq as "ANT" after the IPO closes. OpenAI, a rival, is seeking $30 billion in what may be its final private round before a potential IPO next year, and investors will watch Anthropic's pricing for signals on that valuation.