Anthropic eyes $1.4 trillion IPO valuation in test of Wall Street's AI fervor

Nov 10 (Reuters) - Anthropic's blockbuster IPO is set to give the company a valuation of up to $1.4 trillion, slightly lower than some investors' expectations amid a recent cooling in investor appetite for AI, setting up a defining test of Wall Street's faith in the boom that it helped ignite.

The AI lab best ​known for its Claude chatbot, and some of its investors are aiming to raise up to $64.4 billion by selling 825 million shares in the IPO priced up to $78 per share.

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The company is launching the roadshow for a historic share sale that is expected to set a benchmark for the sector, following years of hype that fueled a massive influx of capital into AI companies.

"What we are seeing is essentially a reassessment of Anthropic's value in a more challenging AI environment," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank in Geneva. "The company continues to post impressive growth, but investors are increasingly focused on the cost of generating that growth."

At the top of the price range, Anthropic would be valued at about $1.4 trillion on a fully diluted basis, which includes securities such as stock options and restricted stock. On ​a non-diluted basis, excluding those securities, the company’s market value would be about $1 trillion.

Hours before Anthropic filed an updated prospectus with the US Securities and Exchange Commission on Tuesday, details of its IPO, including the proposed price range, were briefly circulated to investment ​banks late on Monday shortly before being retracted, according to emails seen by Reuters.

The preliminary terms showed Anthropic planned to sell about 867 million shares at up to $80 apiece, in an offering that could raise as much ⁠as $69.3 billion, including shares sold by existing shareholders.

The prospectus ultimately filed with the SEC contained different terms, with Anthropic setting a lower price range and targeting reduced proceeds.

BIG SPEND CONCERNS

Nvidia joined the deal amid an FBI probe into its CEO Jensen Huang's affair with a Chinese woman alleged ​to be a spy for Beijing, which has also triggered an internal investigation.

Investors had previously discussed a valuation of as much as $2 trillion, but expectations have since come down given the company's substantial infrastructure commitments and the recent volatility in AI-related stocks, with the $1.5 trillion figure viewed as the high end ​of the range, Reuters previously reported.

"The shift from a $2 trillion valuation to today's level reflects a change in focus from revenue growth alone to the significant financial commitments and spending required to sustain it," Ozkardeskaya said.

Investors are also closely watching Anthropic’s IPO for clues about rival OpenAI, which is seeking to raise $30 billion in what is expected to be its final private funding round before a potential IPO early next year. OpenAI recently secured $11 billion at a $1.25 trillion valuation, below the $1.5 trillion it had initially sought.

The second half of the year has brought a reckoning for the AI boom, as investors question whether returns will justify the massive spending and mounting debt costs in an elevated ​interest-rate environment.

Concerns are also rising over the sustainability of the investment cycle, with questions around circular financing arrangements, the risk of infrastructure overcapacity and how quickly companies can turn their AI investments into revenue.

The Nasdaq notched its deepest one-day drop in 19 months on Thursday, wiping out trillions in market value on ​fears of more AI scrutiny, particularly on data center construction, after Democrats' massive gains in the US midterm elections.

'HARMFUL ACTIONS'

Despite the midterms being widely viewed as a rebuff to a White House which has aggressively supported the AI build-out and opposed regulations, Anthropic adopted President Donald Trump's preferred name for the new technology, "Super Intelligence", ‌at several points in ⁠its IPO filing.

Its filing spoke of a vision to "bring forth an age of miracles," even as it warned of existential risks to humanity, laying bare the extraordinary promise and profound uncertainties at the heart of the AI boom.

The prospectus outlined a range of risks facing both the company and the technology, warning that competitors could gain an edge by developing models faster and that advances in AI could outpace Anthropic's ability to put adequate safety and security measures in place.

"Our models have in the past behaved, and may in the future behave, in unintended, misaligned, or autonomous ways, including by taking harmful actions that no user or third party directed, which could adversely affect our reputation and brand, business, financial condition, and results of operations," Anthropic warned in its latest prospectus.

The warnings come amid a growing number of incidents involving "rogue" AI agents that have escaped sandboxed environments and breached private company systems, alongside concerns that ​increasingly capable AI tools could be used by hackers to penetrate protected ​networks.

GROWTH COMES WITH RISKS

Greater oversight and potential regulatory hurdles could complicate ⁠the infrastructure buildout underpinning the AI boom.

But Anthropic's growth has so far defied those concerns, propelled by surging demand for its products, particularly its viral Claude models.

Anthropic's run-rate revenue was roughly $81 billion as of October 31, up $10 billion from September 30, according to the IPO filing.

Anthropic's net loss narrowed in the third quarter as revenue jumped 47% from a quarter earlier to $16.96 billion, though the pace of growth slowed. It had surged 144% in the prior ​quarter.

The company attributed the breakneck growth to the rapid adoption of Claude, including specialized products targeting industries such as healthcare, financial services and legal services.

Certain Anthropic board members and entities affiliated or associated with them have indicated interest in buying up to $303 million of shares from the offering.

Anthropic, locked in ⁠a fierce battle ​for market share with rival OpenAI, was last valued at $965 billion in a private funding round. The company's prominent investors include Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital.

Anthropic, led by CEO ​Dario Amodei, was founded in 2021 by a group of researchers who left OpenAI following disagreements over governance and AI safety.

The shares are expected to trade on the Nasdaq under the ticker symbol "ANT" after the IPO closes, which would make Anthropic one of the few major companies to go public this fall as higher borrowing costs, geopolitical turmoil and rising bond ​yields weigh on the IPO market.

Goldman Sachs and Morgan Stanley are leading the syndicate of investment banks underwriting the offering.

Reporting by Echo Wang in New York and Manya Saini and Arasu Kannagi Basil and Niket Nishant in Bengaluru; Editing by Sumeet Chatterjee, Christian Plumb, David Goodman, Jan Harvey and Arun Koyyur

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Echo Wang runs coverage of corporate dealmaking across the U.S. for Reuters, leading a team that breaks market-moving news on the biggest deals in corporate America. Her own reporting spans M&A, IPOs and enterprise investigations, and was the first to report exclusives on some of the largest initial public offerings on record, including 2026's SpaceX and Anthropic, as well as major transactions such as SpaceX’s acquisition of xAI. She has also led Reuters’s coverage of deals involving TikTok and Grindr, and investigations into the financing behind Truth Social. Echo began her career as a travel writer for Lonely Planet and has worked on NPR’s The Indicator podcast, Frankfurter Allgemeine Zeitung, and Le Monde. She joined Reuters in 2019 as an Overseas Press Club Foundation Fellow after completing her master's degree at Columbia Journalism School.

Manya is a senior correspondent covering the institutions and market forces shaping U.S. finance, from Wall Street’s largest banks and IPOs to payments companies, asset managers, insurers and fintech firms. Her reporting spans earnings, credit and capital markets, as well as broader shifts across the financial industry. Her work includes breaking news and in-depth industry reporting and appears across Reuters’ finance, markets and business sections. She holds a bachelor’s degree in political science from the University of Delhi and a master’s degree in journalism from the Symbiosis Institute of Media and Communication. Contact: manya.saini@thomsonreuters.com

Basil writes stories across the U.S. finance file including banks, asset managers, payment firms, insurers, and exchange operators. He also covers initial public offerings on U.S. exchanges and venture capital funding.