Micron commits $1 billion to Anthropic IPO placement

Micron Technology ↗ 11.89% has agreed to buy about $1 billion of Anthropic stock through a private placement that will close alongside the AI developer's initial public offering. Anthropic disclosed the commitment in an updated IPO prospectus filed Tuesday, Nov. 10. Micron is one of seven technology suppliers buying a combined $26 billion of shares, according to The Motley Fool via The Globe and Mail.theglobeandmail.com

Nvidia ↗ 2.87% and Alphabet's ↗ 2.00% Google are each committing $10 billion, and Advanced Micro Devices ↗ 7.32% is putting in $2.5 billion. Broadcom ↗ 3.99% and Microsoft ↘ 2.26% are each investing $1 billion, the same as Micron, and an affiliate of Taiwan Semiconductor Manufacturing ↗ 4.25% is investing $500 million, the filing shows. All seven will get nonvoting Class N shares at the IPO price.theglobeandmail.com

Deal terms

Anthropic and some existing shareholders plan to sell 825 million shares at $70 to $78 each, which would raise up to $64.4 billion. Shares are expected to begin trading on the Nasdaq ↘ 0.31% on Nov. 19 under the symbol "ANT," Reuters reported. Counting the cornerstone investments, the total raise could reach $90.4 billion. At the top of the range, Anthropic would be valued at about $1.4 trillion on a fully diluted basis, Reuters said. Pricing is expected on Wednesday, Nov. 18, according to CNBC's reporting cited by The Motley Fool.reuters.com+1

At the $74 midpoint, Micron's $1 billion would buy about 13.5 million shares, FourWeekMBA calculated. The placement still needs stockholder approval, among other conditions. The filing also says the IPO itself does not depend on the placement being completed. Shares from the placement will not be subject to the underwriters' lock-up agreements, TradingKey reported. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 1.83% and Morgan Stanley ↗ 1.63% are leading the offering, Bloomberg reported.mitrade.com+2

Suppliers investing in a customer

Each of the seven investors sells chips, cloud capacity or other infrastructure to Anthropic. The updated prospectus puts Anthropic's computing and infrastructure commitments at $900.9 billion, up from $895.4 billion in the previous filing. That means the $26 billion placement equals less than 3% of those commitments, The Motley Fool noted.theglobeandmail.com

Part of the money was already promised. Google's $10 billion comes from exercising an option under an earlier note purchase agreement. AMD's $2.5 billion counts toward an existing $5 billion equity commitment. Micron and TSMC have no stated-amount commercial agreements in the filing, according to FourWeekMBA's review.fourweekmba.com

For Micron, which sells memory and storage chips to data centers, the stake links it more closely to one of the biggest AI infrastructure buyers. A Simply Wall St analysis warned that it also adds customer-concentration and timing risk at a time when the company is already spending heavily on new fabs.finance.yahoo.com