AI giant Anthropic files for an IPO that could break records

Anthropic, a startup that makes the popular Claude AI models, has taken a major step toward selling shares to the public. Experts expect its initial public offering, or IPO, to be one of the biggest ever.

On Monday, Anthropic filed its final paperwork with regulators for an IPO under the stock symbol ANT. News reports say the company could be worth between $1.5 trillion and $2 trillion.

That would put Anthropic in the same league as SpaceX, Elon Musk's rocket and AI company. SpaceX was worth about $1.8 trillion when it began selling shares to the public in June. Anthropic's IPO filing did not say how many shares it plans to sell or what prices it might ask for them.

Filing a public registration document, called a Form S-1, with the Securities and Exchange Commission is a major step in Anthropic's rapid growth. The company began just five years ago, when a group of researchers left OpenAI. The group was led by Dario Amodei, who worried that OpenAI, run by Sam Altman, was not on track to develop AI safely.

Anthropic has since grown into a major company and become OpenAI's biggest competitor. Its AI models are among the most widely used on the market. But the company has also faced controversy, including a dispute with the Pentagon over how its AI models can be used and questions about Amodei's strong warnings about AI risks.

AI stocks have faced big price swings

The filing comes at a time when stock prices for AI companies have been moving up and down sharply. Investors are excited about how AI could help the economy, but they are also worried about safety and the huge amounts of money being invested in the technology.

The IPO could happen as soon as November. It is expected to be one of the most closely watched stock offerings in years. OpenAI, the company behind ChatGPT, is also planning an IPO, but those plans are on hold for now. Altman has ruled out a stock market listing this year, calling it "ill-advised" because of growing concerns about AI safety.

"Going public has a lot of advantages. It brings in capital for growth. It makes it easier for you to raise additional capital elsewhere. And it makes it possible for your existing investors to cash out," said Jim Angel, an associate professor and markets expert at Georgetown University.

But Angel added, "there's concern that we may be in an AI bubble. We're in a very dynamic industry, to say the least, and we can expect a lot of volatility in the markets." Even so, Angel said it makes sense for Anthropic to "strike while the iron is hot" and sell shares now, while it may be able to get the highest possible value for the company.

Now that SpaceX is trading on the stock market, Anthropic's IPO could show how interested investors are in AI companies. This is happening while investors worry about whether these businesses can earn enough money to justify the enormous amounts being spent on AI. SpaceX's share price rose sharply for a short time after its listing but later fell back to about $150, where it started trading.

Worries about the AI industry remain

Companies hoping to benefit from AI's growth face a difficult challenge. CoreWeave, a company that provides data centers and other technology needed to run AI, saw its share price plunge this month. Investors became worried about whether it could pay for its expansion plans, and the returns investors demanded on its bonds rose sharply. Other major companies, including Intel, Meta and Nvidia, have also faced worries and seen their share prices fall in recent weeks.

Borrowing money to pay for AI projects has become a growing concern. AI companies are rushing to raise money to meet demand, while interest rates are expected to keep rising as the Federal Reserve tries to bring stubborn inflation under control.

In its S-1 filing, which explains its plans for the IPO, Anthropic listed risks that AI could create and risks to its own business. These include the chance that its AI models could improve faster than the company can keep them safe, that people could use the models to cause harm, or that the models could take harmful actions on their own. The filing also warned that the company could face closer government attention or political backlash because of its views on government policy and rules.

Amodei has given some of the strongest warnings in the AI industry about the possibility that AI could get out of control and cause harm. He has urged AI companies to "pace the frontier", meaning they should be careful about how quickly they develop AI, and to slow the development of their most powerful models.

Anthropic has also been in conflict with the Pentagon this year over how the military can use its AI models. Amodei has said the company will not allow its AI to be used for weapons that operate on their own or for the mass surveillance of Americans.

In response, the Pentagon put Anthropic on a blacklist and labeled it a "supply chain risk". This label had previously been used for organizations linked to countries that oppose the United States. Anthropic has sued the Pentagon in two federal district courts. Both legal cases are still ongoing.