Anthropic IPO price range points to $1.4tn valuation

The Anthropic IPO will price shares at between $70 and $78 each, the company behind the Claude chatbot said in an updated filing on Tuesday (November 10), a range that could value it at up to $1.404 trillion on a fully diluted basis and make the listing one of the largest ever, TechCrunch reported.

Anthropic plans to sell 825 million Class A shares, raising between $57.75 billion and $64.35 billion. The stock is expected to trade on the Nasdaq Global Select Market under the ticker "ANT", with CNBC reporting a debut close to November 19.

Anthropic IPO: the key numbers

The updated filing sets out a series of figures that investors will be watching closely:

• Price range of $70 to $78 per share, with a midpoint of $74.
• A separate $26 billion private sale of non-voting Class N stock at the IPO price to AMD, Broadcom, Google, Micron, Microsoft, Nvidia and TSMC, with Google and Nvidia putting in $10 billion each.
• Estimated net proceeds of $84.6 billion to $93.7 billion, the higher figure if underwriters use their option to buy up to 123.75 million extra shares.
• Up to 20% of the offering expected to go to retail investors.
• Underwriters including Goldman Sachs and Morgan Stanley.

Below earlier hopes

The top of the range would be a big jump from the $965 billion valuation Anthropic reached in a fundraising in May. But it is well short of the $2 trillion that some backers were reportedly hoping for a few months ago, according to TechCrunch and the Financial Times. The BBC, which put the likely valuation at around $1.1 trillion to $1.3 trillion, noted that the company is coming to market at a volatile time for AI stocks.

After last week's US midterm elections, the Nasdaq fell sharply on concerns that a Democrat-led Congress could slow AI development and the construction of data centres. There are also wider worries about whether the huge sums being spent on artificial intelligence will pay off. Rival OpenAI was reportedly valued at $1.25 trillion last week after raising $11 billion.

Fiona Cincotta, senior market analyst at City Index, told Reuters that the amount Anthropic wants to raise was "fairly bullish" given recent volatility, and showed the company believes demand for AI will be there.

Revenue soars, but so do losses

Anthropic said its run-rate revenue reached $81 billion by the end of October, about $10 billion higher than a month earlier. Third-quarter revenue came in at $17 billion, and revenue for the first nine months of the year totalled $33.2 billion.

The costs are just as striking. The company reported a nine-month net loss of $104 billion, and its compute and infrastructure commitments have reached $900.9 billion. It holds nearly $132 billion in cash and short-term investments.

Founders keep control

Anthropic is a public benefit corporation, and its founders hold a Class F share carrying 50.1% of the voting power. Its Long-Term Benefit Trust will also elect a majority of the board, so buyers of Class A shares will have limited say over how the company is run.

The filing shows seven co-founders, including chief executive Dario Amodei and president Daniela Amodei, each plan to sell nearly 3.4 million shares, worth about $250 million apiece at the midpoint price. The company, founded in 2021 by former OpenAI staff, is just five years old.

Why it matters for Thailand

The listing is likely to be watched closely by investors worldwide, and public attitudes to AI in Thailand are broadly positive, as our report on a Thai AI survey showing 74% see more benefits than drawbacks found. Anthropic's own research has also drawn attention, including its METR report on AI speeding up AI research. The scale of spending on data centres is a global debate, as seen in the OpenAI data center NDA policy for public officials.

The original report was published by TechCrunch.

Image: Anthropic chief executive Dario Amodei at TechCrunch Disrupt 2023, used to illustrate the Anthropic IPO story. Photo by TechCrunch via Wikimedia Commons, CC BY 2.0.