Anthropic Sets IPO At $1.5 Trillion Based On Explosive Sales Growth

Anthropic has begun to set expectations for its IPO, expected in the next month or so. Based on a 14 times increase in sales of its software over the last year, the initial valuation is projected to be around $1.5 trillion, though that is at the low end of the market's early estimates and could well rise to $2 trillion as the hype builds, which is a time-worn Silicon Valley tactic.

That Anthropic is losing $80 billion on that revenue does not appear to bother investors. Yet. JL

Mike Isaac and colleagues report in the New York Times:

Anthropic's revenue skyrocketed to $16.3 billion in the first half of the year, a 14-fold increase from a year ago. But as it spends billions to grow, the company lost more than $80.7 billion in the first half of the year, compared with a loss of $13 billion a year earlier. The net loss was abnormally large because it included a one-time $72.4 billion charge related to convertible notes, debt that will later turn into equity. Anthropic aims to raise more than $100 billion in its public listing, which could value the company at $1.5 to 2 trillion, pushing it past Elon Musk’s SpaceX as the world’s biggest I.P.O. The privately held company had already surpassed rival OpenAI’s valuation in May, reaching $900 billion compared with OpenAI’s $730 billion. 

Four years into the artificial intelligence boom, investors are beginning to question how much longer it can go.

On Monday, Anthropic, the maker of the Claude chatbot and a key developer of cutting-edge A.I. models, painted a picture of future growth propelled by the technology — including advances in science, discovering cures for diseases and bringing about explosive economic growth — as it prepares for what could be the largest ever initial public offering.

“We believe that A.I. is one of the most consequential technologies in human history,” Dario Amodei, the chief executive of Anthropic, and the company’s six other founders said in a much anticipated corporate filing that signals its public listing is just weeks away.

Mr. Amodei and the other founders added that their San Francisco company aimed to “realize” the benefits of A.I. “while navigating and preventing the risks that come with a technological revolution this fast and this powerful.” In the filing, Anthropic said its revenue skyrocketed to $16.3 billion in the first half of the year, a 14-fold increase from a year earlier, largely from businesses using its A.I. software, including Claude.

But as it spends billions to grow, Anthropic has bled money. The company lost more than $80.7 billion in the first half of the year, compared with a loss of $13 billion a year earlier. The net loss was abnormally large because it included a one-time $72.4 billion charge related to convertible notes, a type of debt that will later turn into equity.

Anthropic could aim to raise more than $100 billion in its public listing, which could value the company at $2 trillion, pushing it past Elon Musk’s SpaceX as the world’s biggest I.P.O. The privately held company had already surpassed rival OpenAI’s valuation in May, reaching $900 billion compared with OpenAI’s $730 billion. (OpenAI is considering a new funding that would value it at about $1.5 trillion in advance of its own public offering.)

But some companies have recently pulled back from going public amid uncertainty in the stock market. Oura, a maker of smart rings, recently delayed a listing, as did SB Energy, a subsidiary of the Japanese conglomerate SoftBank that has proposed to build the world’s largest data center project in Ohio. And fears have grown over whether the spending on A.I. will pay off if demand for the technology cools.

Anthropic’s filing was unusual in that it warned its products could bring about disasters, including loss of control of the technology and authoritarian abuses. “To build A.I. is to harness cognition itself, and anything so powerful can be used for ill as well as good,” Mr. Amodei and the company’s other founders wrote. Anthropic’s finances underlined the growing might of an A.I. business that is only five years old and seemingly came out of nowhere. The company’s technology is regarded as so powerful that it plunged the start-up into disputes with the Department of Defense, rattled governments worldwide with how it could penetrate security systems, and brought company leaders into conversation with heads of state and even the head of the Catholic church. Anthropic’s own leader, Dr. Amodei, has called for a slowdown in development of its A.I.

If the company’s public offering is successful, it would likely unleash an avalanche of wealth for Wall Street and Silicon Valley. It would be the second “mega” I.P.O. this year, following SpaceX’s listing in June, which briefly turned Mr. Musk into the world’s first trillionaire. OpenAI is also aiming to list its shares in an offering that could come next year.

(The New York Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to A.I. systems. The two companies have denied those claims.)

Anthropic was founded in 2021 when a group of employees left OpenAI over disagreements about how A.I. should be developed. Dr. Amodei, who was OpenAI’s vice president of research, created Anthropic with his sister, Daniela, and others who were focused on developing a superintelligent computer system as quickly and safely as possible.

“I think that most people are underestimating just how radical the upside of A.I. could be, just as I think most people are underestimating how bad the risks could be,” Dr. Amodei wrote in an October 2024 essay titled “Machines of Loving Grace,” inspired by a Richard Brautigan poem on a future in which all-powerful robots commingle with humans in “harmony," Interpretations of the poem — and of Dr. Amodei’s writings — range from techno-optimism to a pessimistic view of A.I.’s impact on the world. Dr. Amodei and the other Anthropic founders have sometimes been called “doomers” about A.I.

Venture capital investors initially dismissed Anthropic as a science project. Many early backers were prominent figures in the effective altruism movement, which applies data and analysis to social causes. Dustin Moskovitz, a co-founder of Facebook; Jaan Tallinn, an entrepreneur; and Sam Bankman-Fried, the disgraced founder of the bankrupt cryptocurrency exchange FTX, were among Anthropic’s first investors.

Anthropic toiled largely in obscurity as OpenAI broke through with the 2022 release of its ChatGPT chatbot. Anthropic eventually focused on A.I. coding tools, which were so effective at generating software code that they sent shock waves through Silicon Valley’s engineering ranks. After the start-up released updates to its coding chatbots last fall, its business surged as tech companies worldwide adopted the programs. 

Investors including Menlo Ventures, Lightspeed and Iconiq Capital poured billions into the company. Anthropic has raised roughly $130 billion in private funding. Along the way, Anthropic also became a singular target for criticism. The company has incurred the ire of many in the tech industry for Dr. Amodei’s hard-line stance in support of A.I. regulation and his wariness of open-source software. Other tech leaders including Jensen Huang of Nvidia and Mark Zuckerberg of Meta have criticized Anthropic, accusing Dr. Amodei of trying to centralize A.I. power.

Goldman Sachs and Morgan Stanley are the investment banks leading the public offering.

Anthropic did not say how many shares it would sell in the I.P.O. or at what price. It will trade on the Nasdaq exchange under the symbol ANT.