Anthropic aims for $1.3 trillion valuation when it becomes a public company

Artificial intelligence company Anthropic is targeting a valuation of approximately $1.3 trillion when it goes public through an initial public offering (IPO), despite growing concerns about the significant investment flowing into the sector. According to a regulatory filing, the company plans to sell 825 million shares priced between $70 and $78 each, potentially raising over $61 billion if the IPO is priced at the midpoint.

The initial share price is a delicate process, as pricing too high could cause shares to plummet on the first day, while pricing them too low may leave money on the table for the company and the banks involved in the IPO. The San Francisco-based company is expected to make its debut on Wall Street this month, potentially becoming one of the largest IPOs ever, though it appears it may not surpass the record $86 billion raised by SpaceX in its June IPO.

A successful Anthropic IPO would also precede OpenAI's public listing, setting the stage for a significant debut by two rival AI developers. Dan Ives, a senior managing director at Yorkville Ives & Co., noted that "for tech and AI, this is the first time a U.S. frontier lab carries a standalone public market price, uncluttered by an ad business or a rocket business."

Anthropic's rapid revenue growth, reaching over $16 billion in the first half of the year, is 14 times higher than the same period last year, but the company has yet to turn a profit, like many other tech firms going public. Anthropic, OpenAI, Google, and other competitors, including startups in the U.S. and China, all battle for dominance in the AI landscape.

The rapid costs of building AI resources have led to significant financial losses for these companies, sparking concerns of an AI bubble. Earlier this week, Wall Street experienced a sell-off, particularly affecting stocks tied to AI data center expansion. Critics argue that a potential AI bubble may be forming as the industry continues to expand without sufficient checks.

Anthropic's CEO, Dario Amodei, has cautioned that the AI industry should slow its rapid development to ensure safety measures keep pace, warning that AI could potentially control the entire internet within six to 12 months if left unchecked. He proposed a plan to increase industry oversight but emphasized that such measures require coordination across the industry and with global governments, including authoritarian ones.

The company's shares are set to list on the Nasdaq Global Select Market under the "ANT" ticker symbol.