AI giant Anthropic files for an IPO that could break records

Anthropic, the company behind the very popular Claude AI models, has taken a major step toward selling shares to the public. Experts expect this kind of stock market sale, called an initial public offering (IPO), to be one of the biggest ever.

On Monday, Anthropic filed its final paperwork with government regulators for an IPO. The company plans to use the stock symbol ANT. News reports say the IPO could value the company at 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 valued at about $1.8 trillion when it began trading on the stock market in June. Anthropic's IPO document does not say how many shares it will sell or what price it will ask for them.

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

Since then, Anthropic has 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. This includes a dispute with the Pentagon over how its AI models can be used, as well as questions about Amodei's strong warnings about the dangers of AI.

Even so, Anthropic's IPO document shows that the company is very hopeful about AI. “We believe this abundance of AI will rapidly transform every sector of the global economy in ways greater than the impact of industrialization, electricity, semiconductors, and the internet,” the document said. In other words, the company believes AI could change the world even more than these major technologies did.

Anthropic's IPO document showed that the company has grown very quickly, with big changes in its revenue, operating income and losses. The company said its revenue in the first six months of the year rose by 1,300% to $16.3 billion. Its adjusted operating income, a measure of how well its main business is doing financially, reached $1.6 billion during that period. In the same period a year earlier, it had recorded a loss of $1.8 billion by this measure.

Anthropic has not yet made a profit over a full year. It said it lost nearly $81 billion from January through June, compared with a loss of $13 billion during the same six months last year.

In a statement emailed to NPR, Raj Joshi, a senior vice president in the corporate finance group at ratings agency Moody's, called Anthropic's move from a negative to a positive adjusted operating income “a strong positive for the AI ecosystem.”

U.S. stock market indexes rose on Monday after Anthropic made its announcement early in the morning.

AI stocks have been hit by volatility

The filing comes at a time when stock prices for AI companies have been moving up and down sharply. Investors are weighing excitement about how AI could help the economy against worries about safety and the huge amounts of money being spent on the technology.

Anthropic's 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 have been put 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 specialist at Georgetown University.

But Angel said there are also worries that AI companies may be worth much more than they should be, creating what is known as a 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” by selling shares now, while investors may still be willing to give the company a very high value.

Now that SpaceX is trading publicly, Anthropic's IPO could show how much investors are willing to spend on AI companies. This comes at a time when markets are nervous about whether these businesses can make enough money to justify the enormous sums being invested in AI. SpaceX's share price rose sharply for a short time after its stock market listing, but later fell back to about $150, the price at which it began trading.

In May, during its most recent fundraising round with private investors, Anthropic was valued at $965 billion after the new investment.

Concerns remain about the AI sector

Companies trying to benefit from the growth of AI face a difficult choice: how to expand quickly while managing financial risks. CoreWeave, a company that provides data centers and other computing equipment and services, saw its share price plunge this month. Investors became worried about whether it could afford its expansion plans, and the interest rates on its bonds rose sharply. Other major companies, including Intel, Meta and Nvidia, have also faced concerns and seen their share prices fall in recent weeks.

Borrowing money to fund business growth has become a bigger concern as AI companies rush to raise enough money to meet demand. At the same time, interest rates are expected to keep rising as the Federal Reserve tries to bring stubbornly high inflation under control.

Anthropic's Form S-1 filing, which prepares the way for its IPO, listed risks the company sees from AI and risks to its own business. One concern is that its AI models could become more powerful faster than the company can make sure they are safe. Another is 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 more scrutiny or a political backlash because of its views on government policy and regulation.

Amodei has issued 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 slow the development of their most powerful models.

Anthropic has also clashed with the Pentagon this year over how the military can use its AI models. Amodei has firmly opposed using Anthropic's AI to control weapons that can choose and attack targets without human control, or to carry out mass surveillance of Americans.

In response, the Pentagon blacklisted Anthropic and labeled it a “supply chain risk.” This label had previously been used for organizations linked to U.S. adversaries. Anthropic has sued the Pentagon in two federal district courts. Both legal cases are still ongoing.