Aaron Schwartz/Bloomberg via Getty Images
- This post originally appeared in the Business Insider Today newsletter.
- You can sign up for Business Insider's daily newsletter here.
$1.4 trillion valuation. $90 billion raised.
That's Anthropic's best-case scenario for its upcoming initial public offering, according to its recent regulatory filing.
It's now up to the AI startup and its bankers to drum up interest with investors during its IPO road show, which started yesterday. The AI startup expects to price shares between $70 and $78.
An official go-public date hasn't been set, but the end of next week appears the likely candidate.
One thing that's not up to chance: The investors that committed to buying $26 billion in Anthropic shares at its IPO price.
The backers are some of the biggest names in the AI race, including Broadcom, Google, and Nvidia. It highlights an ongoing criticism of the industry relying too heavily on circular financing.
BI's Joe Ciolli, author of the First Trade newsletter, unpacks the decision to make an AI-heavy private placement in conjunction with the IPO.
Aropic's IPO is an investor referendum on AI.
It's a chance for investors to either support (or avoid) a new, key bellwether for the AI industry.
The last time the general public had its say on AI, things didn't go well for the tech. (See: midterms.)
Granted, these are investors, not general voters. Their interest is less about data centers in their backyard and more about whether it's a business that'll keep the stock price going up after they buy it.
Anthropic's IPO paperwork, which shows the soaring compute cost needed to keep revenue growing, doesn't necessarily make that an easy sell either.
Brian Boland knows something about going public in a challenging market. He was a vice president at Facebook during its disastrous 2012 IPO. He spoke to BI's Stephen Council about that experience and the similarities he sees with Anthropic's looming IPO.
Facebook (now Meta) eventually figured it out, but it took more than a year for it to recover and close above its IPO price.
With so much riding on AI, the stakes are much higher this time around. It's unclear if the market could stomach an AI darling underperforming for that long.
Regardless of Anthropic's IPO performance, one group (besides early investors and employees) is already coming out ahead. The startup has budgeted a staggering $41.5 million in legal fees for its IPO, nearly double what SpaceX planned during its record-breaking IPO.