Anthropic Investors Reassess IPO Valuation Amid Revenue Growth Slowdown

Recent financial disclosures from Anthropic, an artificial intelligence company, have led some investors to reassess their expectations for the firm’s upcoming initial public offering (IPO). According to sources familiar with the matter, current and prospective investors are considering a lower valuation for Anthropic after its latest quarterly results. This development comes as the broader AI market faces growing concerns over the ballooning cost of financing AI systems.

Some investors who attended Anthropic’s investor day in San Francisco on October 14 discussed a valuation of around $1.5 trillion, which is significantly lower than the roughly $2 trillion valuation previously expected for the November share sale. This revised estimate reflects a more cautious approach to valuing the company amidst slower revenue growth and increased costs associated with developing AI systems.

Anthropic’s latest financial disclosures showed that its Q3 revenue jumped 45% to $16.8 billion from the previous quarter, while also reporting profitability on an adjusted basis during the same period. However, some investors were disappointed by the slowing sequential growth rate in the latest quarter, as Anthropic’s revenue more than doubled from Q1 to $11.6 billion in Q2.

The concerns among investors are not limited to Anthropic alone; they reflect broader worries about the AI buildout and its financing. The tech sell-off has roiled global financial markets, affecting AI infrastructure companies, chipmakers, and neocloud providers that rent computing power for AI broadly. Shares and bonds of Nvidia-backed CoreWeave tumbled on Thursday, reflecting growing investor concern about an AI buildout increasingly financed with borrowed money.

A disappointing share sale for Anthropic could further add to investor worries about the AI buildout. The IPO market has suffered some setbacks recently, including data centre operator SB Energy’s decision to delay its listing and nuclear technology company Holtec Nuclear’s plans to go public being put on hold. During Wednesday’s meeting at Anthropic’s headquarters in San Francisco, attendees mostly comprised of prominent investors met with CEO Dario Amodei and finance chief Krishna Rao.

Anthropic has emerged as one of the leading generative AI developers with its Claude family of models. The company’s rapid growth has been underpinned by Alphabet’s Google and Amazon, which are simultaneously investors, suppliers of computing power, and important distribution partners, as well as AI competitors. Last year, Anthropic’s revenue surged 11 times to nearly $4.6 billion, even as the company lost more than $8 billion on an operating basis, excluding writedowns of various liabilities mostly tied to previous fundraising.