Anthropic IPO Demand Surges as Valuation Eyes $1.5 Trillion

IT之家 November 11 news, according to the UK's Financial Times, driven by exceptionally strong investor subscription demand, Anthropic's underwriters are considering raising the offering price for the artificial intelligence company's initial public offering (IPO). Less than a day earlier, Anthropic had just disclosed that the company plans to list next week, targeting a valuation of approximately $1.4 trillion (IT之家 note: approximately 9.36 trillion yuan at current exchange rates).

According to five people familiar with the matter, the underwriters have indicated they expect to raise the share price above the $70 to $78 per share range (approximately 468.1 to 521.6 yuan at current exchange rates) disclosed in the filing submitted earlier on Tuesday. In the coming days, Anthropic's target valuation could therefore rise to $1.5 trillion (approximately 10.03 trillion yuan at current exchange rates) or even higher.

The higher offering price would also push the total IPO fundraising above $100 billion (approximately 668.776 billion yuan at current exchange rates). Three Anthropic investors said the company is currently more focused on raising as much capital as possible through the listing to support massive spending on computing power, rather than single-mindedly pursuing a higher valuation.

Anthropic said on Tuesday that the IPO plans to raise up to $64 billion (approximately 428.016 billion yuan at current exchange rates), which would make it one of the largest IPOs in history. If market subscription demand exceeds the offering size, the company could also raise nearly an additional $10 billion (approximately 66.878 billion yuan at current exchange rates) through the over-allotment option (commonly known as the "greenshoe mechanism").

At the same time, Anthropic also announced a private placement plan running in parallel with the IPO. Strategic partners including Google, Nvidia, and Microsoft will collectively invest $26 billion (approximately 173.882 billion yuan at current exchange rates) in the company at the IPO offering price.

The IPO is being led by Goldman Sachs and Morgan Stanley. People familiar with the matter said the two investment banks received a large volume of positive subscription indications after launching the investor roadshow on Tuesday, and therefore expect to push the company to further raise the offering price.

Based on the filing submitted on Tuesday, and taking into account employee stock options and other restricted shares, Anthropic's fully diluted valuation range is $1.26 trillion to $1.41 trillion (approximately 8.43 trillion to 9.43 trillion yuan at current exchange rates).

The listing is expected to take place next week, but the current financial market environment is unstable. Just days ago, the US midterm elections triggered a sharp selloff in technology stocks, wiping $3.2 trillion (approximately 21.4 trillion yuan at current exchange rates) in market value and unsettling Wall Street investors.

Although the market subsequently rebounded somewhat, the plunge showed that market sentiment can reverse rapidly in a short period of time. At the same time, leverage has also amplified both investment gains and losses for many investment institutions.

An investor at a large investment institution said: "In the current market environment, a single weekend is enough for everything to change dramatically."

As doubts grow over whether the AI investment boom can be sustained, Anthropic's investors have also lowered their earlier expectations of a $2 trillion (approximately 13.38 trillion yuan at current exchange rates) IPO valuation in recent weeks.

Anthropic has been trying to allay concerns about whether its revenue growth can keep pace with its massive capital expenditures. The company plans to spend approximately $900 billion (approximately 6.02 trillion yuan at current exchange rates) over the next few years on computing power and infrastructure.

Anthropic has told investors that its annualized revenue reached $81 billion (approximately 541.708 billion yuan at current exchange rates) in October, while third-quarter revenue was $17 billion (approximately 113.692 billion yuan at current exchange rates).

As Anthropic's main competitor, OpenAI also disclosed to investors on Tuesday that its third-quarter revenue grew 50% year over year to $10 billion (approximately 66.878 billion yuan at current exchange rates). A person with direct knowledge of the matter confirmed the news.

Analysts at Morningstar believe Anthropic's fair equity value is approximately $1.7 trillion (approximately 11.37 trillion yuan at current exchange rates). However, given the significant uncertainty around how quickly its products will achieve market adoption, the company's valuation could fluctuate between $500 billion and $3 trillion (approximately 3.34 trillion to 20.06 trillion yuan at current exchange rates). This wide range also reflects the market's lack of confidence in whether the AI boom can be sustained over the long term.

Meanwhile, some investors who have already been allocated shares in Anthropic's IPO have begun reselling part of their holdings to other buyers. This practice mirrors similar transactions that occurred ahead of SpaceX's listing in June this year.

A New York brokerage said on Tuesday that it was selling up to $500 million (approximately 33.44 billion yuan at current exchange rates) worth of Anthropic shares on behalf of a venture capital firm. The information shows that these privately traded shares are being offered at a price 4% above Anthropic's final IPO offering price.

Another venture capital institution is offering $1.25 billion (approximately 83.6 billion yuan at current exchange rates) worth of shares through a special purpose vehicle (SPV), corresponding to a company valuation of $1.5 trillion (approximately 10.03 trillion yuan at current exchange rates). An SPV is a specially established investment entity through which pre-IPO investors can hold shares and sell part of their holdings to other buyers.

However, Anthropic has begun restricting the use of SPVs and has warned that it will not recognize share transactions proposed by certain pre-IPO secondary market brokers.