Anthropic finally put a number on itself, and the number is $1.4 trillion. The company behind the Claude chatbot filed an updated prospectus on Tuesday that prices its initial public offering at $70 to $78 a share, and if the shares land at the top of that range the AI lab would be worth more than all but a handful of companies on Earth. It would also be one of the biggest IPOs in history by money raised, which is the kind of record that usually gets set when everyone is feeling rich. The timing is less cheerful than the number. AI stocks just had their worst week in months, investors have started asking how any of this spending pays for itself, and Anthropic is about to find out whether Wall Street still believes the answer.
A $64 billion sale, and a $900 billion bill
The deal itself is simple enough to describe. Anthropic plans to sell 825 million Class A shares, which would raise between $57.75 billion and $64.35 billion before fees. On top of that, the company struck a separate private deal to sell $26 billion of non-voting stock to a group of its biggest partners and suppliers, including Google, Nvidia, Microsoft, AMD, Broadcom, Micron and TSMC, with Google and Nvidia putting in $10 billion each. Add in the banks' option to buy another 123.75 million shares and the whole package approaches $100 billion, which would make it the largest IPO ever by money raised. The valuation math is where it gets slippery. Count only the shares that exist today and the company is worth about $1.02 trillion at the top of the range. Count every option and stock grant that could become a share someday and you get the $1.404 trillion figure, which is the one in the headlines. Either way it is a big jump from the $965 billion valuation Anthropic reached in a private funding round in May, and still well short of the $2 trillion figure that was floating around a couple of months ago.
The revenue growth is real, and so is the spending. Anthropic said its run-rate revenue reached $81 billion by the end of October, up $10 billion in a single month, and third-quarter revenue came in at $17 billion. But the filing also shows a nine-month net loss of $104 billion and nearly $901 billion in purchase commitments and leases, almost all of it for computing power and the data centers to house it. The company is sitting on about $132 billion in cash and short-term investments, which sounds like a lot until you compare it with the size of the bill coming due. Anthropic is not a company that sells software and keeps the money. It is a company that rents enormous amounts of computing to train its models, and the rent keeps going up. TechCrunch noted that the filing makes Anthropic one of the fastest-growing companies ever measured, and also one of the most expensive to run.
Your shares, their rules
Anyone thinking of buying in should read the fine print before the price. Anthropic is a public benefit corporation, and its seven co-founders hold a special class of shares carrying 50.1 percent of the voting power. A Long-Term Benefit Trust will also elect a majority of the board, which means ordinary shareholders will own a slice of the company and have almost no say in how it is run. That is not unusual for a founder-led tech company, but it is a bigger gap than most, and it matters more when the company is asking the public for $64 billion. The founders are also selling some of their own stock in the deal, about 3.4 million shares each, worth roughly $250 million apiece at the midpoint of the range. Up to 20 percent of the offering is set aside for retail investors, so regular buyers will get a real shot at shares instead of watching institutions take the lot.
There was also a small stumble on the way to the filing. Late on Monday, Anthropic briefly circulated draft terms to investment banks showing a higher range that could have raised as much as $69.3 billion, then pulled them back and said the numbers were wrong. The corrected filing came out lower, which is not the look a company wants the day before it starts asking for money. The Financial Times has since reported, citing unnamed people, that bankers are weighing a higher price that could push the valuation to $1.5 trillion or more, but Anthropic has not confirmed any change and the filed range is still $70 to $78. For now the only numbers that count are the ones in the filing.
The week that decides it
The roadshow is now under way, and the pricing is expected on November 18, with trading to start on the Nasdaq under the ticker ANT the next day, according to CNBC. That makes the next week a straight test of whether the AI boom still has buyers at these prices. OpenAI, Anthropic's biggest rival, was valued at about $1.25 trillion last week after raising $11 billion, which was less than half of the $20 billion it first tried to raise. The market has already shown it will pay up for AI growth, and it has also shown it will walk away when the price feels too rich. Anthropic's filing gives investors the growth story they want, with run-rate revenue up $10 billion in a single month, and the spending story they are starting to worry about, with $900 billion committed to computing. Both stories are true at the same time, and the price next Wednesday will say which one Wall Street believes more.
Anthropic is not asking the market to believe in a chatbot. It is asking the market to believe that a company can spend $900 billion on computing, lose $104 billion in nine months, and still be worth $1.4 trillion because the revenue curve points straight up. That bet has paid off for the company so far, and the queue of investors willing to make it has been long. Next week we find out if the queue is still there at $78 a share, or if the market has finally found a price it will not pay for the future.
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Author: Alan Ward
Seattle News Desk