Anthropic's $1.5 Trillion IPO Faces Investor Pushback Amid AI Stock Selloff

Artificial intelligence firm Anthropic is encountering investor doubts surrounding its planned $1.5 trillion IPO, as US technology stocks have suffered a significant drop, according to The Wall Street Journal. Three potential investors have indicated that they believe the company's valuation should be lower, with one suggesting a potential reduction to around $1 trillion, which is $500 billion less than previously anticipated.

Anthropic had set its sights on an IPO before Thanksgiving, aiming to raise up to $100 billion. However, the market's volatility has raised questions about the valuation, the fundraising target, and the timing of the offering.

Investors are considering the possibility of delaying the IPO, with one suggesting that it might be prudent to postpone the offering due to recent losses in the AI sector. Another investor proposed a more modest fundraising target of approximately $80 billion. Anthropic reportedly held a substantial cash reserve of $146.6 billion as of September 30, and one investor reportedly hoped that this balance would rise above $200 billion following the IPO.

The company's executives and advisers are expected to review these plans in the near future, although no final decisions have been announced.

Earlier this week, US technology stocks took a significant hit, erasing approximately $2.5 trillion in value from the Nasdaq Composite following a technology sector sell-off. This downturn came in the wake of US midterm elections, which brought increased scrutiny of AI expansion and potential restrictions that could affect data center development.

Despite this turbulence, Anthropic had previously attracted strong investor interest, bolstered by its strong business relationships with tech giants Google, Amazon, and Nvidia. However, concerns about valuations had already begun to surface within the sector.

The WSJ also reported that rival OpenAI had secured around $11 billion in financing, which was less than the initial $30 billion target. This financing reportedly valued OpenAI at $1.25 trillion, falling short of its earlier $1.4 trillion goal. For Anthropic, the uncertainty surrounding its IPO remains as investors reassess the financial outlook for major AI companies. Its final valuation, fundraising amount, and IPO date have yet to be determined.