VCs will make billions on Anthropic’s IPO, but Amazon is set to make much (much) more

Venture capital firms stand to profit significantly from Anthropic's upcoming IPO, with billions expected in returns from stakes held by firms like Menlo Ventures, Sequoia, Sound Ventures, and Spark Capital. However, Amazon is poised to reap even greater gains, according to Anthropic's S-1 filing. The tech giant's investment in Anthropic far exceeds the VC firms', making it the primary financial beneficiary of the IPO.

Amazon invested a total of $18 billion in Anthropic, including $6.2 billion in convertible notes and $10 billion in nonvoting preferred stock. The convertible notes, which were structured as debt that converts into shares upon an IPO or sale, are now valued at $97.9 billion. As Anthropic's valuation continues to rise, Amazon's shares will become increasingly valuable, with the potential to convert into 1.84 billion shares.

Amazon's total investment, including its $8 billion in convertible notes and $5 billion in each of Anthropic's two most recent funding rounds, brings its stake to roughly $18 billion. In addition to its stock gains, Amazon will also earn substantial revenue from Anthropic. The company has committed to spending at least $110 billion on AWS over the next ten years.

Google is also set to benefit from Anthropic's IPO, having secured a significant stake and cloud computing deals with the AI company. While venture capital firms stand to make substantial profits, the S-1 filing reveals that tech giants like Amazon may be the true winners of Anthropic's IPO.