Anthropic Nears IPO at USD 2 Trillion Valuation, but Growth Slows and Infrastructure Bills Loom

Quarterly profit underpins hopes for a valuation of up to USD 2 trillion
Contract payments limit investment capacity as revenue growth slows
Early shareholder sales could add to downward pressure on the stock

U.S. artificial intelligence (AI) company Anthropic has begun the listing process by making its initial public offering (IPO) registration statement public. Buoyed by surging revenue and a quarterly operating profit, it is seeking a valuation of up to USD 2 trillion (approximately USD 2.04e+3 billion). But a recent slowdown in revenue growth is raising questions about the growth drivers needed to sustain that lofty valuation. Its capacity to invest in accelerating growth is also limited. Massive payment obligations under existing infrastructure contracts mean a substantial portion of IPO proceeds will likely go toward fulfilling prior commitments. Existing shareholders will also be allowed to sell shares from the outset of trading, raising concerns that selling pressure could weigh on the stock before the growth expectations embedded in the offering price translate into results.

Anthropic Begins Nasdaq Listing Process

According to The Wall Street Journal (WSJ) on the 26th (all dates hereafter are local time), Anthropic publicly filed an S-1 registration statement for its IPO with the U.S. Securities and Exchange Commission (SEC) that day. The filing showed revenue of USD 16.3 billion (approximately USD 16.6 billion) for the first half of this year, roughly 14 times the year-earlier figure, while its operating loss narrowed from USD 2.1 billion (approximately USD 2.14 billion) to USD 693 million (approximately USD 707 million). Notably, it turned profitable on a quarterly basis in the second quarter, posting operating income of USD 974 million (approximately USD 993 million). Second-quarter revenue rose approximately 144% from the previous quarter, while computing and infrastructure costs increased approximately 65% over the same period. In other words, as service sales increased, computing and infrastructure costs accounted for a smaller share of revenue.

Its first-half net loss was USD 80.7 billion (approximately USD 82.3 billion), mostly attributable to accounting charges arising from changes in the value of convertible financial instruments. Of this, USD 72.4 billion (approximately USD 73.8 billion) was a noncash loss from fair-value remeasurements of convertible bonds and similar instruments. As the company's valuation rose, so did the assessed value of financial instruments that investors could later convert into shares, with the increase recognized as an accounting expense. Anthropic is pursuing a Nasdaq listing and did not disclose an offering price range or the number of shares to be issued in this filing. Market estimates put its expected valuation at USD 1.5 trillion–USD 2 trillion (approximately USD 1,529.65 billion–USD 2.04e+3 billion).

The valuation of up to USD 2 trillion largely reflects expectations of continued rapid growth. Annualizing the third-quarter revenue of USD 16.8 billion (approximately USD 17.1 billion) disclosed at an investor briefing on the 14th of this month yields USD 67.2 billion (approximately USD 68.5 billion), putting the upper end of the expected valuation at 30 times that figure. The revenue used as the basis for valuation also includes fees paid to cloud distributors. Anthropic recognizes the full amount customers pay through cloud platforms as revenue and records the platforms' share as an expense. Approximately 48% of its first-half revenue this year came through cloud marketplaces, meaning fees paid to distributors were included in revenue.

First-Half Operating Loss Despite Quarterly Turnaround

Maintaining such a high valuation, however, requires steady growth in revenue and profits, yet revenue growth has recently been slowing. Anthropic's third-quarter revenue grew approximately 45% from the previous quarter, about one-third of the second-quarter growth rate. Customer spending has also been rising more slowly than service usage. Data from corporate spend management company Ramp showed that Anthropic's token usage increased nearly 90% from early July through the end of September, while related spending rose just 19%. Tokens are units used by AI to process data, meaning the companies surveyed paid less to process the same amount of data. Reuters Breakingviews identified declining revenue per token due to price competition among AI companies as a factor behind the growth slowdown.

As for profitability, its track record of profits is too short to conclude that it has moved beyond annual losses. Anthropic's operating loss last year exceeded USD 8 billion (approximately USD 8.16 billion), more than doubling from USD 3 billion (approximately USD 3.06 billion) in 2024. Revenue rose from USD 400 million (approximately USD 408 million) to USD 4.6 billion (approximately USD 4.69 billion) over the same period, but annual operating expenses exceeded USD 12 billion (approximately USD 12.2 billion), widening the loss. That means it spent more than USD 2.6 (approximately USD 2.65) in operating expenses for every USD 1 (approximately USD 1.02) of revenue last year. It also posted an operating loss of USD 1.7 billion (approximately USD 1.73 billion) in the first quarter of this year, and the second-quarter profit offset an amount equivalent to 60% of that loss. Its operating loss was approximately 4.3% of total first-half revenue, leaving it in the red for the half-year.

Table 1. Anthropic's Operating Results and Profitability

Long-Term Infrastructure Commitments Set to Consume IPO Proceeds

Large expenditures under existing computing and infrastructure contracts also lie ahead. Commitments to use cloud computing resources from Google, Amazon and Microsoft (MS) alone total at least USD 269.4 billion (approximately USD 275 billion), according to the filing. The Google contract calls for payments of at least USD 114.5 billion (approximately USD 117 billion) from April of this year through July 2033. Anthropic has committed to spending at least USD 110 billion (approximately USD 112 billion) with Amazon from May of this year through April 2036, and at least USD 44.9 billion (approximately USD 45.8 billion) with Microsoft from November of this year through May 2033. All three contracts require minimum spending regardless of actual usage, leaving the payment obligations in place even if Anthropic fails to fully utilize the computing resources it has secured.

Semiconductor and equipment lease payments are also substantial, on top of cloud usage fees. Lease payments under its equipment agreement with Broadcom total USD 161.2 billion (approximately USD 164 billion), while its agreement to use SpaceX's Nvidia graphics processing unit (GPU) computing resources is worth up to USD 120.5 billion (approximately USD 123 billion) through 2029. It has separately signed contracts to pay computing resource providers Nscale and Lambda up to USD 44.6 billion (approximately USD 45.5 billion) and USD 41.3 billion (approximately USD 42.1 billion), respectively. Payment schedules and performance conditions differ across contracts, but spending required to run its AI services—from securing semiconductors to using cloud services and leasing equipment—is committed over multiple years.

If a substantial portion of IPO proceeds goes toward payments under existing contracts, its capacity to make additional investments after listing will shrink accordingly. As of the end of June this year, fixed and minimum payment commitments under noncancelable purchase agreements totaled USD 265.6 billion (approximately USD 271 billion), while future payments under leases that had not yet commenced reached USD 321.4 billion (approximately USD 328 billion). Some of these contracts require payments for up to 20 years regardless of whether the facilities are used, making it difficult to cut spending even if demand falls short of expectations. The Broadcom equipment lease also requires payments to begin before data centers are ready, raising concerns that delays in bringing facilities online could create cash-flow pressure. If funds are consumed by existing commitments and the facilities take longer to generate sufficient revenue, the capital raised through the listing is likely to have a weaker effect on further growth and valuation gains.

Concerns Over a Post-Listing Share Price Decline

With Anthropic going public under the weight of massive spending obligations, a high offering price would increase the risk of a share price decline once trading begins. Art Hogan, chief market strategist at B. Riley Wealth Management, cited an excessively high offering price and a drop immediately after listing as his biggest concerns about Anthropic's IPO. Indeed, following this month's investor briefing, some existing and prospective investors lowered their valuation of Anthropic from USD 2 trillion to USD 1.5 trillion. Their proposed valuation is 25% below the upper end of expectations, showing substantial differences among investors even ahead of the listing. Even if the offering secures a USD 2 trillion valuation, it remains uncertain whether buying demand in subsequent trading will support that price.

Allowing existing shareholders to sell from the beginning of trading is also expected to weigh on the stock. The filing includes a plan allowing some early investors and employees to sell shares on the first day of trading, with additional sales permitted on the 27th and 48th trading days. The phased lifting of selling restrictions would increase the supply of shares available in the market. In particular, a sharp rise immediately after listing would give early investors and employees a greater incentive to sell and lock in gains. Without sufficient new buying demand, profit-taking sales could build up and derail the stock's rise. The prospect of additional supply could also weigh on the stock even before selling restrictions expire. Investors anticipating more shares coming to market could postpone purchases, weakening buying demand before existing shareholders begin selling in earnest.

A sharp post-listing share price decline combined with allegations of inadequate disclosures could also increase the company's burden through shareholder class-action lawsuits. U.S. securities law allows investors to seek damages from issuers, directors and IPO underwriters if a registration statement contains material misstatements or omissions. In such cases, a key issue is whether investors were adequately informed of signs of deteriorating performance or cost burdens known before the offering. Facebook, for example, faced a class-action lawsuit alleging that it had concealed information about its growth outlook after its shares traded below the offering price for more than a year following its 2012 listing. Shareholders alleged that the company had told underwriting banks to lower their earnings forecasts while withholding the relevant information from ordinary investors. Facebook agreed to pay USD 35 million (approximately USD 35.4 million) without admitting wrongdoing, and a court approved the settlement in 2018. Likewise, if Anthropic's post-listing performance falls well short of the growth outlook presented during the offering, investors could question whether it adequately disclosed information needed to assess its valuation, including profitability and the scale of its spending.

OpenAI Lowers Valuation Target by 11%

OpenAI's decision to postpone its listing until next year is also seen as reflecting both valuation scrutiny and fundraising pressures. OpenAI is seeking an additional USD 30 billion (approximately USD 30.6 billion) in investment in case a weak IPO market pushes its timetable back further. The aim is to secure funding in advance to meet large infrastructure commitments and give it the financial runway to reach a listing. To that end, it has discussed participation with existing shareholders, including SoftBank and Abu Dhabi investment firm MGX, and held briefings for long-term investment funds and sovereign wealth funds in the middle of this month. OpenAI is putting particular effort into securing investment commitments before Anthropic's listing. Since the two companies are approaching many of the same major investors, the move is seen as an effort to lock in investment before funds are allocated to Anthropic's offering.

OpenAI has also lowered its valuation expectations to secure investment. It proposed a valuation of around USD 1.4 trillion (approximately USD 1.43e+3 billion) to investors early this month, but after some pushed back, it adjusted the target to USD 1.25 trillion (approximately USD 1.27e+3 billion) in recent negotiations. That is approximately 11% below the original proposal, reflecting its acceptance of investors' demands for a lower price as it seeks additional funding ahead of a listing. It set the 30th of this month as the deadline for investors to confirm their participation and left open the possibility that the actual amount raised could fall short of its USD 30 billion target, depending on demand. With fundraising not yet complete, the final valuation and amount secured will be determined in the remaining negotiations.