Anthropic, the artificial intelligence company behind the Claude chatbot, is reportedly considering an initial public offering (IPO) valuation of $1.5 trillion or more. This potential figure is being driven by strong investor demand, with the IPO already fully covered at launch. The offering, including a private placement and potential overallotment, could raise approximately $100 billion, potentially surpassing SpaceX's base deal as the largest listing on record.
Skepticism Amidst High Demand
Despite the significant investor appetite, the proposed valuation has sparked considerable debate and concern among market observers. Jack Selby, a venture capitalist and managing partner at Peter Thiel's family office, has warned that an underperforming Anthropic IPO could trigger a major correction in the broader AI market. Selby, who has previously described the enthusiasm around private AI technology as the 'biggest bubble,' highlighted several risks.
Valuation and Revenue Concerns
Selby questioned Anthropic's decision to list despite its cash reserves and expressed skepticism about its long-term revenue model, noting that over 80% of its current revenue is non-recurring. He argued that while Anthropic is a 'real business,' its early stage of development makes a trillion-dollar valuation seem 'exceptionally far-fetched,' especially given the substantial spending required for data, energy, data centers, and chips.
Competitive Landscape and Market Risks
Competition from rapidly advancing Chinese AI models, such as DeepSeek, also poses a significant threat to Anthropic's proprietary advantage. Selby suggested that if given the opportunity, he would be 'massively long Chinese AI.' The fundraising also comes as the market recovers from a sell-off driven by expectations of tighter regulation and increased costs for data centers and related AI infrastructure. The Anthropic IPO is set to test investor confidence in AI valuations, the sector's ability to manage high costs, and the ongoing competitive and regulatory risks.
Fundraising Details and Market Impact
Anthropic and its co-founders aim to raise up to $90.4 billion through the IPO and a private placement, targeting a market value of $1.4 trillion on a fully diluted basis. The base offering alone could raise $64.4 billion from the sale of 801.4 million shares by Anthropic and 23.6 million shares by existing backers. A substantial $26 billion private placement is expected from major technology firms, including Advanced Micro Devices, Broadcom, Google, Micron Technology, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing Company.
The IPO is scheduled to be priced on Wednesday, November 18, with trading expected to commence the following day. While the potential fully diluted valuation of $1.4 trillion would be below SpaceX's $1.77 trillion market value at its offering, the sheer scale of Anthropic's fundraising and its ambitious valuation are poised to be a significant indicator for the future of AI investments.