Investors are lining up for a piece of one of the world's leading artificial intelligence developers. Anthropic's initial public offering has attracted orders worth roughly six times the number of shares available, Bloomberg News reported on Thursday, November 12, citing people familiar with the matter, in what could become the largest IPO in history.
Anthropic and some of its existing shareholders are seeking to raise up to $64.4 billion by selling 825 million shares at between $70 and $78 each, according to a Reuters report on the Bloomberg story published by MarketScreener. Trading is expected to begin on the Nasdaq on November 19 under the symbol "ANT." At the top of the range, the offering would value the company at up to $1.4 trillion.
Bankers have told prospective investors that Anthropic will give priority to its existing backers, according to the report, meaning some new buyers may receive smaller allocations than they had hoped. Demand figures and other details could still change, and Anthropic did not respond to a request for comment.
The biggest offering ever
Including a concurrent private placement, Anthropic is seeking to raise as much as $90.4 billion, according to regulatory filings cited by Yahoo Finance. That would exceed the planned IPO of SpaceX and dwarf previous records such as Saudi Aramco's 2019 listing.
Goldman Sachs and Morgan Stanley are leading the offering, with 20 other banks participating, Yahoo Finance reported. The deal is scheduled to price on November 18, according to The Next Web.
Bloomberg had reported on November 11 that orders were several times the shares on offer, driven by large anchor orders from institutional investors. Such indications of interest are not binding until the shares are priced and allocated.
A global retail offering
Unusually for a US listing, Anthropic is offering shares directly to retail investors in several countries. Its offer covers Denmark, Finland, France, Germany, Ireland, the Netherlands, Norway, Spain and Sweden, under a prospectus approved by Germany's financial regulator BaFin, which also covers Swiss retail investors, according to The Next Web. A retail offer in Australia, led by Commonwealth Bank's CommSec with a group of eight brokers, opened on November 11 and closes on November 17.
In Japan, Anthropic plans to sell between 38.5 million and 50 million shares, worth $3 billion to $3.5 billion, and its filing also covers Canada and the United Kingdom.
Founders take some money off the table
Seven Anthropic co-founders are selling a combined 23.6 million shares in the offering, about 3.4 million each, according to The Next Web. At the $74 midpoint of the range, that amounts to about $250 million per founder and $1.75 billion in total, roughly 1.5% of each founder's stake. All seven have pledged to give away 80% of their personal equity.
"The market has gotten more comfortable with founders and large shareholders taking some money off the table," Jay Ritter, a University of Florida professor who studies IPOs, told Bloomberg.
The financial picture
Anthropic's amended filing on November 10 gave investors a detailed look at its finances. Its third-quarter operating profit fell from the second quarter, reflecting about $5 billion of short-term computing costs and a $2 billion charge related to matching employee charitable donations, according to The Next Web. Price cuts on new models reduced revenue by about $600 million, and its adjusted operating margin fell to 15% from 19%.
The company reported cash of $95.6 billion and short-term investments of $36.3 billion. It disclosed about $10 billion of new cloud commitments with Microsoft and Google since its previous filing.
Big Tech's windfall
The IPO is set to produce enormous paper gains for Anthropic's biggest backers. Amazon's $18 billion investment could be worth more than $250 billion at a $1.4 trillion valuation, and Google's $33 billion investment about $140 billion, according to The Next Web. Together, the two companies own more than a quarter of Anthropic's shares. Nvidia is putting about $10 billion into the private placement.
A test for the AI boom
The offering comes at a delicate moment for AI stocks. Nvidia's chief executive Jensen Huang resigned on November 12 amid a scandal, AI infrastructure stocks have been volatile, and investors are debating whether the massive spending on AI will deliver adequate returns.
"A successful I.P.O. is arguably required to validate the valuations of stocks in the A.I. ecosystem," said Craig Coben, a former global head of equity capital markets at Bank of America. Aswath Damodaran, a finance professor at New York University, told the New York Times: "It is a loaded bet, but I don't think anybody wants to be left out of the bet."
Not everyone is enthusiastic. Investor Jack Selby warned that "an underperforming Anthropic IPO has to be a very prominent player in what will be a pretty massive correction," according to The Next Web.
Valuation debate
The $1.4 trillion valuation ceiling was set on November 10, slightly below some investors' expectations; the Financial Times had reported that bankers were preparing for a valuation of $1.5 trillion or more. Rival OpenAI was recently valued at $1.25 trillion in a private funding round, according to Bloomberg News reports earlier this month.
Valuing a company growing as quickly as Anthropic is difficult. Investors are weighing the rapid growth of its enterprise and developer business against the enormous cost of computing power needed to train and run frontier AI models.
Risks disclosed
Anthropic's filing highlighted several risks. Between 5% and 7% of revenue in the first nine months of the year came from customers later found to have broken usage or commercial terms, according to The Next Web. A $35 billion computing deal with Lambda can currently be terminated, though Anthropic says it does not intend to end it.
Some early investors are also seeking to sell their shares before the IPO through intermediaries, and Anthropic has said it does not recognise share transfers it has not approved. Up to 316 million shares can trade from the first day, according to the filing.
What it means for India
India is one of the fastest-growing markets for AI tools, and Anthropic has expanded its presence in the country, including plans announced in August for in-country processing of Claude models through Amazon Bedrock. A successful listing would strengthen Anthropic's capacity to invest in markets such as India, where it competes with OpenAI, Google and domestic startups such as Sarvam AI. Indian investors may also gain indirect exposure through global funds that buy into the IPO.
What comes next
Anthropic chief executive Dario Amodei is expected to appear with JPMorgan Chase chief executive Jamie Dimon at a livestreamed investor event on Friday. The offering prices on November 18, with trading set to begin the next day. Investors will watch the final price, the size of the first-day move and whether the listing lifts sentiment across the AI sector.
