Investors Doubt Anthropic's Record $1.5 Trillion IPO Amid Market Slump
Major investors question Anthropic's $1.5 trillion IPO plans amid a sharp market downturn driven by AI sector corrections, which wiped out $2.5 trillion from the Nasdaq index following recent legislative hurdles and political shifts.
Major investors are casting doubt on Anthropic's ability to complete its massive planned IPO at a valuation of $1.5 trillion, amid sharp market downturns driven by AI sector concerns, according to reports. Anthropic's IPO is scheduled for the week before Thanksgiving, which falls on November 26, with the company aiming to raise $100 billion at a valuation of approximately $1.5 trillion.
However, three participating investors argue that the valuation will likely need to be lowered, potentially closer to $1 trillion. One investor suggested the company might also opt to raise less capital than expected, possibly around $80 billion, while hoping to hold more than $200 billion in cash reserves post-IPO. As of late September, the company held $146.6 billion in cash.
Another participating investor raised the possibility that Anthropic could choose to postpone the offering until market conditions improve. According to this investor, even with a swift market recovery, convincing institutional investors burned by recent losses to take another major risk on the AI sector will prove difficult.
Company executives and advisors are scheduled to meet in the coming days to discuss the IPO plans. Thus far, leadership has refrained from commenting on specific proposals. Nonetheless, Anthropic's plans carry significant weight for the broader market and economy given the unprecedented scale of the offering and its ties to tech giants such as Google, Amazon, and Nvidia.
Investors fear potential collateral damage from any shift in Anthropic's roadmap. The offering was projected to surpass the records set by SpaceX in June and become the largest IPO in history. However, market sentiment shifted dramatically this week as investors pushed back against heavy AI expenditures, resulting in a staggering $2.5 trillion wipeout on the Nasdaq index.
Market analysts attribute the sharp declines to the Democrats' sweeping victory in the midterm elections and the approval of several legislative bills halting the construction of new data centers across multiple states.
