Anthropic sets IPO range that could value it at $1.4 trillion

Anthropic has set a proposed price of $70 to $78 a share for its initial public offeringIPOInitial public offering: the moment a private company first sells its shares on the stock exchange. The company raises capital, and founders and early investors can sell part of their stake.Full explanation in the glossary →, or IPO. An IPO is the first time a company sells pieces of itself, called shares, to the public.

The company plans to sell 825 million shares. It is expected to set the final price on Nov. 18 and start trading on Nasdaq on Nov. 19 under the symbol ANT.

At $78, the share sale adds up to about $64.35 billion before offering costs. Other estimates put the possible raise at up to $63 billion. The small gap reflects how the final terms and costs are described, but either figure would make this an unusually large stock-market debut.

At the top of the range, Anthropic could be worth as much as $1.405 trillion on a fully diluted basis. That measure counts all shares that could exist, not just those sold in the IPO.

The figure is higher than the $965 billion valuationValuationWhat a company is worth to the market relative to its profit, sales or assets — usually expressed as a multiple such as P/E or EV/EBITDA.Full explanation in the glossary → attached to its funding round in May. It is also below the roughly $2 trillion value the company had recently been seeking. Some shareholders had viewed even $1.5 trillion as difficult to reach.

This makes the IPO a clear price test for AI firms. A valuation is like a price tag on an entire business. Investors would be putting a trillion-dollar-plus price tag on a company founded in 2021.

Anthropic sells AI products mainly to businesses. Its best-known products are the Claude family of AI models.

For the first nine months through Sept. 30, the company reported $33.24 billion in revenue, about 1,200% higher than a year earlier. It also reported a $104 billion net loss.

Most of that loss came from accounting changes tied to convertible notes and derivative liabilities. Even so, the numbers show the basic tension in the AI business: sales can rise quickly while building and funding the technology remains very expensive.

Anthropic said its revenue run rate reached about $81 billion at the end of October, up $10 billion from the prior month. Run rate is a simple annual estimate based on the latest pace of sales; it is not the same as revenue already earned.

AMD, Broadcom, Google, Micron, Microsoft, Nvidia and Taiwan SemiconductorSemiconductorA material (mostly silicon) whose conductivity can be controlled — the basis of every chip. In market news the word usually means the chip industry as a whole.Full explanation in the glossary → Manufacturing have agreed to buy $26 billion of Anthropic Class N stock privately at the eventual IPO price.

That purchase sits alongside the public share sale. The privately placed shares will not be registered in the offering and will not have the usual underwriter lock-up, a period that normally limits early selling.

About 20% of the IPO is expected to be set aside for retail investors, meaning individual buyers rather than large funds. That is well above the usual 5% to 10% range. Demand from large institutions has already covered the shares available to them within the proposed price range.

The offer arrives while investors are weighing the cost of the AI buildout. Data centersData centerA building full of servers, storage and network equipment with its own power and cooling. AI data centres need many times more electricity than classic ones.Full explanation in the glossary → and the equipment inside them require very large sums, and higher interest ratesInterest rateThe price of money — what a borrower pays for a loan. Central banks set the key rate, and it ripples through mortgages, bond yields and share valuations.Full explanation in the glossary → can make borrowing for those projects more costly.

Political pressure could add another hurdle. Recent statewide ballot measures may slow data-center construction, while a Democratic sweep in Congress has changed the policy backdrop.

At the latest market quotes, the tech-heavy QQQ exchange-traded fundETFA fund traded on the exchange like a share. It usually tracks an index, so one purchase buys a whole basket of companies at low cost.Full explanation in the glossary → was up 3.54% and the broad SPY fund was up 2.37%. Nvidia, a major supplier of AI chips and one of Anthropic's planned private buyers, fell 4.27% to $178.67.

The mixed moves underline the central issue for the IPO: investors may welcome rapid AI sales growth, but they are also judging how much cash the industry must keep spending to sustain it.