Anthropic IPO valuation softens to $1.5 trillion amid market freeze
Anthropic is preparing to file for an initial public offering with a target valuation of $1.5 trillion, down from earlier reports of $2 trillion. The reduction reflects a broader freeze in the equity market, where investors are currently paralyzed by valuation mismatches.
Anthropic, the developer of the Claude chatbot, is expected to file public documents for its initial public offering within days. While some market participants previously believed a $2 trillion valuation was possible, the company is now entering the final stretch with some investors pushing for a $1.5 trillion figure. This softening comes as the broader IPO market remains frozen, with less than $600 million raised this month. West Riggs, head of equity capital markets at Truist Financial, stated that people are truly paralyzed and the market has to sort itself out. A Deloitte & Touche executive noted a stalemate on valuation where companies ask for more than banks will give. Anthropic was last privately valued at $965 billion. The potential wealth creation is illustrated by Spark Capital, a venture capital firm that invested $75 million in 2023 at a $5 billion valuation. That stake is now worth approximately $7 billion, representing a near-hundredfold return. However, retail investors will enter at a valuation nearly 200 times higher than the 2023 round. The company reported an $80 billion accounting loss in the first half, though its true cash loss was $8.7 billion. OpenAI's fundraising is also expected to close at a $1.25 trillion valuation, down from earlier reports of $1.4 trillion. Chris Hughes wrote in Bloomberg Opinion that resolving the Anthropic IPO would remove a major worry for the market. A weak reception of the IPO at a $1.5 trillion valuation would confirm fears about the state of the AI trade.