Anthropic IPO to test Wall Street's appetite for AI stocks

Anthropic is preparing for an initial public offering (IPO) that could value the artificial intelligence company at as much as $1.4 trillion, underscoring strong investor appetite for AI-related businesses despite growing concerns over the sector's soaring costs and uncertain returns.

The company, best known for its Claude chatbot, and some of its existing investors are seeking to raise up to $64.4 billion through the sale of 825 million shares priced at as much as $78 apiece.

Anthropic is also planning to raise another $26 billion through a separate private placement involving cornerstone investors, including Alphabet's Google, Nvidia and Advanced Micro Devices, Reuters reported.


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The proposed offering would rank among the largest public market debuts in history, although it would fall short of SpaceX's $75 billion IPO in June, which set a record for the biggest US listing. The SpaceX offering surpassed previous landmark debuts by Alibaba, Visa and Facebook, now known as Meta Platforms.

Anthropic's IPO plans come at a challenging time for technology stocks, with a recent sector-wide selloff highlighting investor concerns about the substantial capital requirements of artificial intelligence development and the uncertain timeline for generating returns.

Rising borrowing costs have added to the pressure, prompting investors to reassess the sustainability of massive investments in AI infrastructure and technology.

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The timing of Anthropic's proposed listing is particularly significant as investors have become increasingly focused on the costs of AI expansion, Reuters reported, citing market analysts.

Political and regulatory uncertainties, alongside a higher interest-rate environment, are also raising questions about the pace of future AI spending.

The proposed IPO could therefore serve as a major test of investor confidence in the AI sector, particularly as markets increasingly scrutinise the financial commitments required to sustain the industry's rapid expansion.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)