Key Takeaways
- • Blackstone has told investors in Anthropic's $63 billion "Project Northstar" AI semiconductor financing deal with Broadcom that Anthropic likely will not regain investment-grade credit status after its IPO, according to the Financial Times citing people familiar with the matter.
- • Blackstone had previously expected an investment-grade rating post-listing but has shifted its view; Anthropic is now expected to receive a speculative-grade (junk) rating from major agencies, though at the higher end of that category.
- • Anthropic's S-1 filed with the SEC on October 26 outlines a plan to invest more than $800 billion in AI infrastructure by 2045, a goal that management says requires investment-grade borrowing costs.
- • A junk rating would raise borrowing costs and could exclude large insurers and pension funds that restrict speculative-grade exposure, potentially forcing reliance on guarantees from high-rated suppliers such as Broadcom and Nvidia.
- • Technology stocks fell broadly on the report, which came as Alphabet, Intel and Amazon earnings fell short of expectations; the planned Nasdaq IPO targets a valuation of up to $2 trillion.
Summary
The Financial Times reported on October 30, citing people familiar with the matter, that Anthropic may fail to obtain an investment-grade credit rating even after its planned U.S. listing next month. Blackstone, described as the world's largest private equity manager, recently told investors in Anthropic's $63 billion AI semiconductor financing deal with Broadcom, known as "Project Northstar," that this was the likely outcome. Blackstone had originally expected the rating to rise to investment grade with the IPO, but it has since changed its stance and now expects major rating agencies to assign a speculative-grade rating, albeit at the higher end of junk territory.
The shift matters because Anthropic's registration statement (S-1), submitted to the Securities and Exchange Commission on October 26, sets out a "bold but rational" plan to invest more than $800 billion in AI infrastructure by 2045. According to the filing as reported, that ambition depends on borrowing at investment-grade rates. Anthropic holds more than $112 billion in cash and cash equivalents and plans to raise about $100 billion through the IPO, but future infrastructure spending is expected to require debt issuance, including corporate bonds.
A speculative-grade rating, defined as BB or lower, would raise borrowing costs and could limit the scale of available funding. Investment grade generally requires BBB- or higher from S&P and Fitch, and Baa3 or higher from Moody's. Large insurers and pension funds often restrict exposure to speculative-grade issuers, which could compel Anthropic to accept higher rates or seek credit support from high-rated suppliers such as Broadcom and Nvidia.
The report weighed on markets. Technology stocks fell across the board the previous day, following weaker-than-expected earnings from Alphabet, Intel and Amazon this week, as investors weighed the prospect that Anthropic would not reach investment grade after listing. Anthropic, developer of the Claude model, is seeking a Nasdaq listing in November at a valuation of up to $2 trillion. If the fundraising proceeds as planned, observers cited by the report say it would be the largest IPO on record.
The shift matters because Anthropic's registration statement (S-1), submitted to the Securities and Exchange Commission on October 26, sets out a "bold but rational" plan to invest more than $800 billion in AI infrastructure by 2045. According to the filing as reported, that ambition depends on borrowing at investment-grade rates. Anthropic holds more than $112 billion in cash and cash equivalents and plans to raise about $100 billion through the IPO, but future infrastructure spending is expected to require debt issuance, including corporate bonds.
A speculative-grade rating, defined as BB or lower, would raise borrowing costs and could limit the scale of available funding. Investment grade generally requires BBB- or higher from S&P and Fitch, and Baa3 or higher from Moody's. Large insurers and pension funds often restrict exposure to speculative-grade issuers, which could compel Anthropic to accept higher rates or seek credit support from high-rated suppliers such as Broadcom and Nvidia.
The report weighed on markets. Technology stocks fell across the board the previous day, following weaker-than-expected earnings from Alphabet, Intel and Amazon this week, as investors weighed the prospect that Anthropic would not reach investment grade after listing. Anthropic, developer of the Claude model, is seeking a Nasdaq listing in November at a valuation of up to $2 trillion. If the fundraising proceeds as planned, observers cited by the report say it would be the largest IPO on record.
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