Investors balk at Anthropic’s $1.5 trillion IPO valuation

Big institutional investors are pushing back on Anthropic's plan to go public at a $1.5 trillion valuation. A steep selloff in artificial intelligence stocks has made them warier of the deal, and one prospective backer suggested the shares could be priced closer to $1 trillion, The Wall Street Journal News Corp ↘ 13.24% reported in an exclusive on Thursday, November 5, according to Investing.com's summary of the report. Anthropic makes the Claude models. It had been aiming to raise up to $100 billion in the week before Thanksgiving, which would be a record listing. Its executives and advisers plan to meet in the coming days to review the IPO, and some backers are debating whether to cut the price range or delay the deal entirely.au.investing.com

A market rout hits a pending deal

The pushback came as the Nasdaq Composite lost about $2.5 trillion in market value in Thursday's session. The rout followed Tuesday's midterm elections, which put more AI-skeptical lawmakers in office and raised the threat of limits on data center construction. Chipmakers including Nvidia ↘ 9.26%, Broadcom ↘ 10.43% and Micron ↘ 17.46% led the losses.finance.yahoo.com+1

Prediction markets reacted quickly. On Kalshi, the odds that Anthropic files for its IPO by November 30 fell from 84% on Wednesday to 60% by Thursday afternoon. The odds of a filing by December 31 dropped from 90% to 74%, and Polymarket showed similar moves. Private funding is also getting harder. According to the Journal, rival OpenAI raised only $11 billion of a planned $30 billion round. Reuters Breakingviews Thomson Reuters Corporation ↗ 0.75% warned that if Anthropic pauses its debut, it risks setting off "a spiral of fear".au.investing.com+2

Why analysts still expect a listing

Not everyone thinks the deal will stall. "We don't expect any near-term impact on the IPO," Morningstar ↗ 1.20% senior equity analyst Malik Ahmed Khan wrote in a note on Thursday, Barron's reported. Barron's pointed out that Anthropic needs the money. It has nearly $900 billion in supply commitments for chips and computing power, and delaying the IPO would stop it from adding to its $146.6 billion in cash and liquid assets. Earlier this week, Khan cited Meta's ↘ 3.96% stock sale, which was five times oversubscribed, and said that if Anthropic tries to raise $100 billion, "I don't think they're going to have any issue".barrons.com+1

Valuation pressure was already building

Anthropic filed its prospectus on October 26 to list on the Nasdaq ↘ 2.62% under the ticker ANT. Reports at the time put its value at $1.5 trillion to $2 trillion, up from $965 billion in its May funding round. Investors had already been pressing for the low end of that range after third-quarter results showed revenue growth slowing and costs rising. PitchBook analyst Harrison Rolfes summed up the company's spending commitments: "Growth is not optional for this company; the contracts assume it".morningstar.com+2