Anthropic Debut Price. Does One Trillion Dollars Sound Reasonable?

Anthropic, the company behind the Claude AI model and arguably the world's largest artificial intelligence laboratory, began meeting with investors on Tuesday, November 10, ahead of its planned listing on the Nasdaq. The company and some of its existing shareholders plan to sell 825 million shares at prices between $70 and $78. This would raise between $57.8 billion and $64.4 billion. If the banks managing the sale use their option to sell another 123.75 million shares, the total could reach about $74 billion. This would make it the second-largest initial public offering (IPO) in history, behind SpaceX's listing earlier this year. The shares will trade under the symbol ANT. At the planned prices, the company could have a market value of around $1 trillion. This seems fairly reasonable compared with earlier estimates of $1.5 trillion to $2 trillion. At the same time, it may be a safer price while AI stocks are facing a market sell-off. What does the IPO document tell us, and when are the shares expected to start trading?

Very Fast Revenue Growth

The IPO document shows the company's financial results in full for the first time. Revenue in the third quarter reached almost $17 billion, compared with $1.4 billion in the same quarter a year earlier. That is about twelve times more. By the end of October, the company's annualized revenue run rate was around $81 billion, an increase of $10 billion from the previous month. The number of customers paying more than $100,000 per year reached 11,900.

The biggest reason for this growth is the use of AI models to help write software. According to the IPO document, Claude wrote more than 90% of the changes to Anthropic's own computer code. The company is also building AI tools for specific industries, especially healthcare and life sciences.

Profits Are Still Uncertain

Anthropic made an operating profit for the first time in the second quarter, earning $974 million. But it returned to a loss of $567 million in the third quarter. Operating costs rose by 292% compared with a year earlier, reaching $17.5 billion. The loss was mainly caused by about $5 billion in short-term commitments to buy computing capacity and $2 billion in non-cash costs linked to a donation program.

There are also early signs that the company may be facing pressure to lower its prices. Cheaper prices for new models and discounts for some customers reduced third-quarter revenue growth by about $600 million. Anthropic is also facing more competition from cheaper AI models whose underlying technology is openly available, including models developed in China.

The Biggest Risk: Huge Financial Commitments

Some of Anthropic's major agreements are with companies that also own shares in the business. Google, Amazon, and Microsoft are all investors, customers, and providers of computing power. These relationships are important when judging how much of Anthropic's demand comes from independent customers rather than companies that are also its business partners or investors.

How Does It Compare With Other Companies?

At a value of $900 billion to $1 trillion, Anthropic would be worth about 11 to 12 times its annualized revenue run rate. That is lower than Nvidia's 16 times, Broadcom's 21 times, and OpenAI's private-market valuation of around 18 times, based on a value of $1.25 trillion. It is similar to the valuations of Microsoft and TSMC.

 

However, it is important to remember that the annualized run rate is based on the company's most recent monthly results. It does not show how much revenue the company actually earned over a full year. If we instead multiply third-quarter revenue by four ($17 billion times 4), the valuation rises to 13 to 15 times that revenue. Anthropic is also only just beginning to make a profit, unlike older, well-established technology companies.

 

What Should Investors Watch?

The IPO is taking place after a sharp fall in AI stocks. The Nasdaq 100 has fallen by almost 10% over the past month, while Nvidia shares have dropped by more than 20%. Investors are also worried about stricter rules for data centers. However, news of the IPO helped improve market confidence. On Monday, the Nasdaq 100 rose by 3.4%. On Tuesday, shares of Anthropic's business partners also climbed, with AMD rising 13% and Broadcom gaining almost 9%.

Anthropic is set up as a public benefit corporation. This means it must balance making money for shareholders with its goal of developing AI responsibly. An independent group called the Long-Term Benefit Trust chooses most of the members of the board of directors. The founders also hold 50.1% of the voting power on other decisions through a special class of shares. This means people who buy shares in the IPO will have limited power over how the company is run. Anthropic also clearly warns in its IPO document that its technology could create "catastrophic or existential risks to humanity" if it is not developed with proper safety measures.

The IPO is being managed by Goldman Sachs and Morgan Stanley, together with 20 other banks. Two important things to watch are whether investors are willing to pay the highest price in the proposed range and how the shares perform during their first days of trading. This IPO will be a major test of whether investors are still willing to pay high prices for fast-growing AI companies after the recent market fall. It could also help set a price benchmark for OpenAI's expected IPO in 2027.

At the highest proposed share price, Anthropic would be worth about $1 trillion. At the lowest price, its value would be around $900 billion. This would put it at a similar value to Walmart or Berkshire Hathaway, but below Meta and Broadcom. Almost all the shares being sold are new shares issued by the company itself. This means Anthropic could raise between $56 billion and $62.5 billion. Its strategic partners, including AMD, Broadcom, Nvidia, and Google, have also committed another $26 billion.

 

One Trillion or 1.4 Trillion Dollars?

Reports mention two different values for Anthropic, and both are correct. The figure of about $1 trillion is the company's market value at $78 per share, based only on the shares currently outstanding. The higher figure of around $1.4 trillion is its fully diluted value. This includes employee stock options, shares promised to employees that have not yet vested, and shares set aside for the donation program. These shares could enter the market in the future, so the higher figure may be more useful for people investing over the long term. At a value of $1.4 trillion, Anthropic would be worth about 17 times its annualized revenue run rate. That is more than Nvidia's valuation multiple and roughly the same as OpenAI's private-market valuation. From this point of view, the IPO price looks less like a bargain.

When Will the Shares Start Trading?

According to reports from Bloomberg, the final IPO price is expected to be announced on Wednesday, November 18. U.S. stock trading usually begins the next day, so Anthropic shares are expected to start trading on Thursday, November 19. The company has not officially confirmed this date. Changes in the wider market could also lead to a change in the schedule.