Anthropic targets $1.4 trillion valuation in massive stock market debut

Anthropic is seeking a valuation of $1.4 trillion for its upcoming IPO, with the company looking to raise as much as $64.4bn in what would be one of the largest stock market debuts in history.

The company, which makes the Claude AI chatbot, launched its investor roadshow on Tuesday, with reported plans to go public next week.

According to its filing with the United States Securities and Exchange Commission (SEC) on Tuesday, Anthropic plans to offer 825 million shares priced between $70 and $78, giving it a valuation of up to $1.4 trillion when potential shares are included.

It has also secured $26bn in a separate private placement backed by some of the world’s largest tech companies, including Google, Nvidia, Microsoft and AMD.

The listing is being closely watched as a major test for how much investors are still willing to bet on AI companies, which have driven huge gains in tech stocks and the broader US market.

The $1.4 trillion valuation is lower than earlier estimates, which had suggested Anthropic could be valued between $1.5 trillion and $2 trillion, as concerns grow about the company’s enormous infrastructure spending and recent swings in AI stock prices.

Those concerns extend beyond Anthropic, with investors increasingly questioning whether AI companies can make enough money to justify their soaring valuations and sustain the boom.

Despite the uncertainty, Anthropic’s growth has been explosive.

The company reported revenues of $17bn in their third quarter, up from $1.4bn a year earlier, as its net losses narrowed. On Tuesday, Anthropic said it was on pace to generate about $81bn in annual revenue, $10bn higher than its estimate a month earlier.

The company credits its growth to the demand for Claude, including from industries like healthcare, financial services and legal services.

But to keep up with that demand, Anthropic has committed almost $900bn to computing costs with partners including Amazon and Google, a massive financial bet on continued demand for its product.

The IPO also lands in an uncertain political climate, with Democrats having just won control of both chambers of the US Congress in the midterm elections last week. The new Democratic-led House of Representatives and Senate have raised the prospect of more regulation of AI companies and new restrictions on the construction of data centres that power the technology.

AI stocks slid after the midterms, with the Nasdaq falling 5.5 percent on Thursday, its biggest one-day drop in more than a year. The selloff, also driven by declines at Nvidia, whose CEO was targeted by an alleged Chinese spy, wiped out trillions of dollars from the market.

Markets have since recovered some of those losses, though the Nasdaq dipped slightly below 1 percent on Tuesday. Some analysts argued the sell-off was an overreaction and that the election was unlikely to derail the expansion of data centres.