Anthropic may need to cut IPO ambitions as investors balk

Anthropic may have to accept a lower valuation than the $1.5 trillion it had been targeting for its stock market debut, after a sharp tech sell-off spooked key investors, the Wall Street Journal reported.

The artificial intelligence company is aiming to hold its initial public offering the week of November 16 and had been expected to raise up to $100 billion, which would make it the largest IPO on record.

Huge sums poured into AI

The listing comes amid growing nervousness among investors about the huge sums being poured into AI.

Three major investors who plan to take part in the offering told the Journal the valuation would likely need to be lowered, with one saying it could end up closer to $1 trillion.

Previous estimates had put the valuation at between $1.5 and $2 trillion.

Another investor raised the possibility that Anthropic could postpone the listing.

Scaling back the size of the offering is another possibility, the Journal said.

Anthropic did not immediately respond to AFP’s request for comment.

Reflects the current mood in equity markets

“Anthropic’s reported willingness to accept a valuation below its $1.5 trillion target reflects the current mood in equity markets more than any change in the company’s own prospects,” said Quoc Dat Tong, Senior Financial Markets Strategist, Exness.

“With roughly $2.5 trillion wiped off the Nasdaq composite in a single session last week, even the most anticipated listings are being repriced.

“An offering once expected to raise up to $100 billion, potentially the largest on record, is now weighed against the risk of postponement or a smaller raise.

“With OpenAI already delaying its own listing until next year, and a company tied closely to Google, Amazon and Nvidia now reconsidering the terms of its debut, the appetite for expensive technology bets has clearly cooled since the sell-off,” Quoc Dat Tong concluded.

Investors pulled back

The size of the deal and Anthropic’s close business ties to Google, Amazon and Nvidia give its plans broad implications for markets and the economy.

Rival OpenAI has delayed its plans to trade on Wall Street until next year.

Companies in the Nasdaq composite lost $2.5 trillion in market value last Thursday as investors pulled back from AI bets.

Anthropic’s listing had been expected to surpass the record set by SpaceX’s IPO in June, which raised $86 billion.