Anthropic's record-breaking IPO faces uncertainty after $2.5 trillion tech wipeout - report
Major investors question Anthropic's $1.5 trillion valuation as a sweeping AI selloff raises the prospect of a smaller IPO or delayed listing.
Anthropic's projected $1.5 trillion initial public offering is encountering skepticism from major investors amid a significant downturn in US technology stocks, leading some backers to propose lower valuations or delays, according to a report in The Wall Street Journal. The AI firm, which creates the Claude chatbot, aims to go public during the week of November 16, potentially raising up to $100 billion, possibly becoming the largest IPO ever.
Three prominent investors have indicated the proposed valuation should be lowered, with one suggesting a valuation closer to $1 trillion, down about a third from the initial estimate. This shift is driven by growing doubts about AI companies' valuations, especially after a massive $2.5 trillion loss in US tech stocks. The Nasdaq Composite saw a severe sell-off on Thursday, with companies losing around $2.5 trillion in market value following the US midterm elections, which bolstered the positions of politicians critical of the industry's rapid growth and approved restrictions that could hinder data center development.
Despite the challenging environment, Anthropic's financial performance, including a revenue run rate exceeding $80 billion at the end of October, is crucial for investor confidence. However, the company's massive funding needs and infrastructure costs pose challenges. Potential investors are debating whether to reduce the offering to $80 billion or postpone it, both moves that come with risks.
If Anthropic's IPO is delayed or downsized, it could have far-reaching effects on the broader AI market and related technology sectors, sparking further uncertainty and market volatility.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
