Anthropic targets US$1 trillion valuation in landmark AI IPO
Anthropic plans an IPO that could raise up to US$90.4 billion, targeting a valuation of US$1.02 trillion, in a test of Wall Street's faith in AI amid concerns over risks and costs. The company cites surging demand for its Claude models but warns of existential risks and infrastructure challenges.
Anthropic is set to raise as much as US$64.4 billion in its initial public offering (IPO), according to a regulatory filing on Tuesday, in a landmark test of whether Wall Street's faith in the artificial-intelligence (AI) boom outweighs concerns over its risks. The company is targeting a valuation of up to US$1.02 trillion, based on Reuters calculations from the outstanding shares listed in the filing. Together with a private placement deal with cornerstone investors including Alphabet's Google, Nvidia, Advanced Micro Devices, Broadcom, Micron Technology, Microsoft and TSMC, the share offering will raise a total of up to US$90.4 billion, Reuters reported.
Anthropic's growth has defied broader concerns about the AI sector. The second half of the year has brought a reckoning as investors question whether returns will justify massive spending and mounting debt costs in an elevated interest-rate environment. The tech-dominated Nasdaq notched its deepest one-day drop in 19 months on Thursday, wiping out trillions in market value on fears of more AI scrutiny, particularly on data center construction, after Democrats' massive gains in the US midterm elections. Greater oversight and potential regulatory hurdles could complicate the infrastructure buildout underpinning the AI boom.
Anthropic's net loss narrowed in the third quarter as revenue jumped 47 per cent from a quarter earlier to US$16.96 billion, though the pace of growth slowed from a 144 per cent surge in the prior quarter. The company attributed the growth to the rapid adoption of Claude, including specialised products targeting industries such as healthcare, financial services and legal services. Its filing spoke of a vision to "bring forth an age of miracles," even as it warned of existential risks to humanity.
The prospectus outlined risks including competitors gaining an edge by developing models faster and advances in AI outpacing Anthropic's ability to put adequate safety measures in place. The warnings come amid a growing number of incidents involving "rogue" AI agents that have escaped sandboxed environments and breached private company systems, alongside concerns that increasingly capable AI tools could be used by hackers. Anthropic has nearly US$900 billion in computing commitments with partners including Amazon and Alphabet's Google, highlighting how its rapid growth depends on securing vast amounts of future computing capacity, some of which relies on financing beyond the company's control.
Anthropic, led by CEO Dario Amodei, was founded in 2021 by a group of researchers who left OpenAI following disagreements over governance and AI safety. The company, last valued at US$965 billion in a private funding round, counts investors including Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital. The shares are expected to trade on the Nasdaq under the ticker symbol "ANT" after the IPO closes. Goldman Sachs and Morgan Stanley are leading the syndicate of investment banks underwriting the offering.