AI frenzy faces public-market test: Anthropic (ANT.US) IPO targets US$64.4 billion raise at valuation of up to US$1.02 trillion

Tuesday's updated prospectus from Anthropic (ANT.US) shows the company plans to raise up to US$64.4 billion in its IPO. The landmark listing will be the first public-market test of a frontier AI company's valuation, growth prospects and risks. Anthropic plans to offer shares at an indicative price range of US$70 to US$78 per share. At the top of the range, the company would be valued at up to about US$1.02 trillion. At the same time, Anthropic will raise US$26 billion through a separate private placement, bringing the combined IPO and related private placement to as much as US$90.4 billion. The valuation also reflects a shift in market expectations. Some potential investors had previously discussed a valuation of about US$1.5 trillion, but viewed that level as the high end of expectations. The top valuation implied by the current price range is about one-third below that previously discussed level, underscoring investors' cautious stance on AI company valuations and returns on capital expenditure. Strategic investors add another US$26 billion, bringing total fundraising to as much as US$90.4 billion The prospectus shows that Anthropic's IPO plans to offer 825 million shares, of which about 801 million will be newly issued by the company and about 23.65 million will be sold by existing shareholders. Based on the US$70 to US$78 price range, the IPO could raise up to about US$64.4 billion. In addition, Anthropic will raise US$26 billion through a separate private placement to strategic investors including Alphabet Inc. Class C (GOOGL.US), NVIDIA Corporation (NVDA.US) and AMD (AMD.US). Other participants include Broadcom Inc. (AVGO.US), Micron Technology, Inc. (MU.US), Microsoft Corporation (MSFT.US) and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US). The two financings combined could reach up to US$90.4 billion, potentially exceeding the roughly US$86.2 billion total raised by SpaceX's IPO including the greenshoe option, making it one of the most closely watched large listings in global capital markets. According to reports, some details of the blockbuster deal were briefly sent to investment banks on Monday evening and then withdrawn. The latest prospectus clarifies the number of shares to be offered and the indicative price range of US$70 to US$78. The AI boom faces a "moment of reckoning" as trillion-dollar valuation comes under scrutiny Anthropic's listing comes as the AI investment boom faces renewed scrutiny. As technology companies continue to expand spending on data centers, chips and energy infrastructure, investors are beginning to question whether AI-driven revenue growth can support massive capital expenditure, and whether the related investments can earn adequate returns in an environment of high interest rates and rising financing costs. Concerns about the sustainability of the AI investment cycle are also rising, with questions surrounding circular financing arrangements, the risk of overcapacity in infrastructure, and the speed at which companies can convert AI investment into actual revenue. The tech-heavy Nasdaq index last Thursday posted its largest single-day decline in 19 months, with market capitalization shrinking sharply. Previously, Democrats made progress in the U.S. midterm elections, and the market fears the AI industry may face stricter policy scrutiny, especially approvals for data center construction and related infrastructure. Stricter regulation and potential policy obstacles could increase the difficulty and cost of AI infrastructure expansion. Still, Anthropic's business growth remains strong for now, with adoption of its Claude models in enterprise and professional work scenarios continuing to drive demand. In its prospectus, the company painted a broad picture of AI driving economic and productivity transformation, while also warning that advanced AI technology could bring serious safety risks, highlighting the profound uncertainty facing this emerging industry beyond its enormous commercial opportunities. Some potential investors had previously discussed a valuation of about US$1.5 trillion for Anthropic, but some investors viewed that level as the high end of expectations. Now, the top valuation implied by the latest price range is about US$1.02 trillion, indicating the market's pricing of the AI company is becoming more cautious. However, this comparison reflects previously discussed market valuation expectations, not an IPO price formally announced by Anthropic. Revenue grows rapidly but pace slows; price competition and profit pressure emerge Financial performance will be an important basis for investors to assess Anthropic's valuation. According to the prospectus, Anthropic's third-quarter revenue rose 47% quarter-on-quarter to US$16.96 billion, extending its rapid growth momentum but markedly slowing from 144% in the second quarter. The company attributed the revenue growth to the rapid adoption of Claude models and specialized products launched for industries such as healthcare, financial services and legal services. Profitability presents a more complex picture. Anthropic's third-quarter net loss narrowed from the second quarter, but it recorded an operating loss of US$567 million in the period, compared with operating profit of US$974 million in the second quarter. The company explained that the third-quarter operating loss was mainly affected by US$5 billion in short-term compute spending and US$2 billion in non-cash expenses related to a donation matching program. Meanwhile, Anthropic's third-quarter adjusted operating profit reached US$2.5 billion, but its adjusted operating margin fell to 15% from 19% in the second quarter. This indicates that while the company is expanding revenue rapidly, it still needs to contend with the temporary pressure on margins from increased compute investment. Price competition is also beginning to affect revenue growth. Anthropic cut prices for some models and offered contract discounts to some customers, measures that reduced third-quarter revenue growth by about US$600 million. As competitors such as OpenAI launch lower-cost models and Chinese developers continue to release low-cost open-weight models, competition among AI companies is gradually extending from model capabilities to pricing and commercialization efficiency. In addition, Anthropic listed a series of business and technology risks in its prospectus, warning that competitors could gain an advantage by developing models faster, and that advances in AI capabilities could outpace the company's ability to implement appropriate safety measures. Recently, safety concerns have been rising over AI agents potentially escaping sandbox environments and intruding into enterprise systems, and the market is also watching whether increasingly capable AI tools could be used by malicious actors to attack protected networks. Nearly US$900 billion in compute commitments; long-term capital needs cannot be ignored Anthropic's rapid growth comes with massive infrastructure investment. According to the latest prospectus, as of September 30, 2026 and thereafter, the company's total signed purchase commitments and lease agreements amount to about US$895.4 billion, the vast majority of which relates to compute and infrastructure. This commitment does not mean Anthropic needs to pay nearly US$900 billion immediately. The prospectus shows that about US$447.5 billion is expected to be incurred by the end of 2030, with most of the remainder expected to be incurred between 2031 and 2045; related commitments due within the next 12 months are about US$69.8 billion. Although the related spending is spread over many years, its scale still highlights Anthropic's enormous demand for future compute resources, and means the company must continue to expand revenue, improve compute efficiency and maintain access to financing in order to fulfill the related contractual obligations. The prospectus also notes that some compute and infrastructure partners rely on third-party financing or credit support to purchase chips and build capacity. If such financing is unavailable or becomes more costly, signed compute supply arrangements could be delayed, repriced, reduced or even undeliverable. At the same time, Anthropic also faces risks such as uncertainty in compute demand forecasts and mismatches between infrastructure commissioning progress and customer demand. If future compute investment cannot be converted into revenue in a timely manner, or revenue growth is insufficient to cover related payment obligations, the company's cash flow and financial condition could be affected. Listing backdrop: after SpaceX, an AI unicorn faces public-market scrutiny The listing follows the blockbuster IPO of Elon Musk's SpaceX. SpaceX raised US$75 billion in June, becoming the world's largest IPO, with total proceeds of about US$86.2 billion after including shares additionally purchased by underwriters through the greenshoe option. Anthropic's IPO and private placement combined could raise up to US$90.4 billion, potentially setting a new record. Anthropic is competing with rival OpenAI for AI market share. The company is led by CEO Dario Amodei and was founded in 2021 by a group of researchers who left OpenAI over disagreements on governance and AI safety. Its prominent investors include Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital. Unlike many traditional technology companies, Anthropic makes AI safety and responsible development an important part of its corporate governance. The company uses a public benefit corporation (PBC) structure and has established a Long-Term Benefit Trust, which has the power to appoint and remove a majority of board members, ensuring the company balances AI safety and long-term public interest while pursuing commercial interests. However, how to strike a balance between its public-benefit mission and commercial returns will also be a continuing concern for investors after the listing. Anthropic must prove that revenue growth from AI products such as Claude can cover expanding compute, research and development and infrastructure costs, and ultimately sustainable profitability. After the IPO is completed, Anthropic's shares are expected to trade on the Nasdaq Global Select Market under the ticker "ANT". Goldman Sachs Group, Inc. and Morgan Stanley are leading the underwriting syndicate.