Anthropic IPO stands alone as AI market jitters sideline others

Synopsis

Many technology IPOs had been planned for this fall, but now Anthropic is the only one expected to go ahead.

The AI company is moving forward with plans to sell shares to the public around the middle of next month. It may publish the document explaining its business and offering as early as late October, people familiar with the matter said. They warned that the plans and dates could change.

Anthropic's planned IPO will test whether its important role in the fast-growing AI industry can help it succeed despite market conditions that would usually lead investment bankers and deal lawyers to recommend waiting. The company is believed to consider a possible valuation of $1.5 trillion reasonable. Anthropic is expected to begin promoting its shares to potential investors during the week of November 9, one person familiar with the matter said.

Other companies that build AI infrastructure and data centers have delayed plans to sell shares to the public. Interest rates have risen, helping drive a sharp drop in the prices of shares and bonds issued by AI companies such as CoreWeave. Investors are also asking whether spending on AI can continue at its current level.

This difference highlights how attractive Anthropic is to investors, even as concerns about competition from open-source AI models and AI safety affect the industry.

Many large investors remain confident about Anthropic's future despite the market turmoil this fall. They see the company as one of the few ways to invest in a technology industry that long-term investors cannot afford to ignore. Two people familiar with the matter said other companies are reluctant to compete with Anthropic for the attention and money of large institutional investors.

Anthropic did not immediately respond to a request for comment.

Valuations are under pressure

The slowdown in the AI sector follows several IPO delays and cancellations since September. Unstable markets and rising interest rates have made it harder for companies to get the share valuations they want.

Switch, a data center operator, and Nscale, a company that provides AI infrastructure, have delayed their IPO plans until later this year, people familiar with the matter said. They stressed that the plans could still change. One person said Nscale partly delayed its IPO because it needed to address comments from staff at the US Securities and Exchange Commission (SEC). SoftBank-backed SB Energy has also postponed its listing, Reuters previously reported.

Switch, Nscale and SB Energy did not immediately respond to requests for comment.

South Korean AI chip startup Elice was among the latest companies to put its IPO plans on hold overnight. Blackstone-backed AirTrunk REIT and Nvidia-backed Firmus have also withdrawn or paused their share offerings, Reuters has reported.

Oura's recent IPO has also made other companies more cautious about going public. The offering attracted little interest from investors who usually hold shares for a long time, one person familiar with the matter said. This has raised concerns about whether enough institutional investors are willing to buy shares. These investors often provide a stable base of shareholders for newly listed companies.

Questions on several fronts

The decision by AI infrastructure companies to delay their listings reflects growing questions about the huge amounts of money needed to build data centers. Investors want to know whether future demand will be strong enough to justify that spending.

Recent developments involving CoreWeave have added to fears that spending on AI could slow down, although some people in the market do not expect such a slowdown to happen.

Nscale publicly filed its IPO registration document in September, while Switch submitted its filing confidentially, Reuters previously reported. A confidential filing allows a company to work with regulators on its registration document before making details about its finances and business public. Companies usually publish the document before investor roadshows, when they begin promoting their shares to potential investors.