By Hamza Faisal
Anthropic is pressing ahead with its blockbuster stock market debut even as investors slash what they are willing to pay for it, with the artificial intelligence company's expected valuation now down by nearly half from where it stood a month ago.
The company will start its IPO roadshow next week, according to reports from The Information and CNBC, with a listing targeted for the week of November 16, ahead of the Thanksgiving holiday. The decision ends days of doubt over whether the offering would go ahead at all after a brutal selloff in AI stocks.
Investors are now discussing a valuation of between $1.1 trillion and $1.3 trillion, Bloomberg reported, while the Wall Street Journal said talks had fallen as low as $1 trillion. That is a sharp fall from the roughly $2 trillion Anthropic was said to be targeting when it entered October, and well below the $1.5 trillion figure investors were using in the middle of the month.
A month of falling expectations
The slide tracks a wider repricing of the AI trade. The Nasdaq Composite fell 5.5 percent on Thursday, November 5, putting the index in correction territory and almost 12 percent below its high of October 6. Around $2.5 trillion in market value was wiped out in a single session.
Investors pointed to the Democratic sweep of the midterm elections on Tuesday, November 3, which rested partly on promises to slow the construction of data centres, as well as concerns about rising borrowing costs and the spending plans of AI companies. Lenders have reportedly pulled back from high-risk projects.
Anthropic's own numbers have added to the caution. An amended filing with US regulators on November 2 showed September-quarter revenue of $17 billion, with growth halving to 47 percent, and a swing back to a $567 million operating loss. The filing also disclosed $895 billion in long-term computing and infrastructure commitments. The company was last privately valued at $965 billion in May.
The roadshow goes on
Despite the markdown, more than half a dozen investors told reporters the company still intends to list before Thanksgiving, even if chief executive Dario Amodei has to accept a price cut. Anthropic declined to comment on the selloff and the outlook for its listing.
Some market watchers argue a lower price could work in the company's favour. Max Kettner, chief multi-asset strategist at HSBC, told Bloomberg Radio that a conservative valuation, even one below $1 trillion, might be the best way to reassure markets. Others are less sure: Gil Luria, an analyst at D.A. Davidson, said investors will expect the IPO to be priced at least at the low end of previous expectations.
A raise of roughly $100 billion would still make Anthropic's debut the largest listing on record, underlining how much is riding on the offering for the wider AI trade.
OpenAI felt the same squeeze
Anthropic is not the only AI giant to see its price come down. Rival OpenAI has also struggled to complete its latest private funding round, cutting the valuation it seeks from $1.4 trillion to $1.25 trillion and the round itself from $30 billion to $20 billion.
Whether Anthropic can price its shares at a level that satisfies both the company and a suddenly sceptical market will now be the first big test of the AI boom's next phase, and the answer is expected within weeks.
