Anthropic Presses Ahead With IPO Despite Sharp Plunge: Roadshow to Start as Early as Tuesday, Valuation May Face Another 20% Cut

Author: Li Dan, Ye Zhen, Wallstreetcn

Despite recent sharp sell-offs in the AI sector, Anthropic has decided to push forward with its IPO amid market pressure. This large-scale public offering will directly test the public market's risk appetite and willingness to price cutting-edge AI assets.

According to a recent report by The Wall Street Journal, one week ago investors expected Anthropic's target valuation to be around $1.5 trillion, but following the crash in AI stocks, some key investors now desire a lower target valuation. Currently, company executives have been meeting with bankers from Goldman Sachs and Morgan Stanley to finalize the valuation range.

On the 6th, Bloomberg cited an informed source stating that valuations discussed among some potential investors have dropped to approximately $1.2 trillion to $1.3 trillion, with even some considering as low as $1.1 trillion.

The report states that Anthropic has scheduled meetings with key investors this week, aiming to have its shares begin trading next Thursday or Friday. The company could still delay its target valuation and wait for more favorable market conditions, though this might trigger market panic.

The progress and final pricing of this IPO will not only determine Anthropic's fundraising size but also serve as a bellwether for the valuation of the entire AI industry chain, directly impacting the market's reassessment of the high capital expenditures for AI infrastructure and their commercialization prospects.

Racing for a Thanksgiving Pre-Holiday Listing, Valuation Expectations Face Downward Adjustments

Anthropic's timeline for this IPO has entered a critical phase.

According to Bloomberg, under relevant regulations, after publicly filing its prospectus on Oct. 26, Anthropic can begin official IPO marketing as early as Nov. 10. If progress goes smoothly, the company hopes to complete pricing during the week of Nov. 16 and list on NASDAQ before the U.S. Thanksgiving holiday on Nov. 26, with the ticker symbol "ANT".

However, severe market volatility has made valuation the core of negotiations among all parties. Several months ago, the market discussed a figure around $2 trillion, but Anthropic will almost certainly need to accept a much lower valuation now. As reported by Bloomberg on the 6th citing an informed source, valuations discussed among some potential investors have fallen to approximately $1.2 trillion to $1.3 trillion, with some even considering down to $1.1 trillion.

For investment banks, pricing strategy is crucial. If the target is set too high, investor demand may suffer and lead to a stock price drop; if the range is too low, the company and bankers will face criticism for "leaving money on the table." In practice, bankers sometimes encourage companies to propose a price range slightly below expectations so they can later raise it based on strong investor demand.

Documents filed this week are expected to detail the number of shares and price planned for sale, and may disclose well-known investors who have committed to subscribe at the IPO price.

Dual Headwinds from Politics and Markets, AI Sector Faces Reassessment

The challenges facing Anthropic's IPO are not only driven by investor disagreements over its own valuation, but also influenced by shifting risk appetites across the entire AI industry chain. Following the U.S. midterm elections, a new wave of figures skeptical of AI have taken power and issued moratoriums that could slow the development of U.S. data centers, causing NASDAQ Composite component stocks to wipe out $2.5 trillion in market capitalization in a single day.

Market volatility previously pushed the Chicago Board Options Exchange Volatility Index (VIX) above the 25 to 28 level. Matt Kennedy, senior strategist at Renaissance Capital, noted that when the VIX stays above 25, companies typically consider delaying IPOs.

Furthermore, growing concerns over the lack of clarity regarding massive AI investments and their potential returns have increased. Recently, Anthropic's competitor OpenAI raised less than half of its initial funding target in its latest financing round, with a valuation also falling short of the target $1.25 trillion.

However, the market subsequently experienced a degree of recovery. A rebound in the S&P 500 Index and the Philadelphia Semiconductor Index, along with a decline in the VIX, may provide additional confidence for Anthropic to continue pushing forward with its listing.

Matt Kennedy believes that Anthropic's IPO differs from that of typical companies. The current market environment may not necessarily force it to delay, but investor demands for discounts and valuations may be higher.

High Revenue Growth Hits Slowdown, Investors Focus on Computing Costs

Another core issue in the valuation debate is whether Anthropic can prove that its revenue growth is sufficient to support its massive listing valuation. The prospectus shows that Q3 revenue reached $16.956 billion, up 1,127% year-on-year. However, signs of deceleration are already apparent, with the Q3 quarter-on-quarter increase dropping to 47%, far below the 144% QoQ growth seen in Q2.

Profitability is also under pressure. In Q3, Anthropic recorded an operating loss of $567 million and a net loss of $23.291 billion. The downturn was mainly impacted by approximately $5 billion in short-term computing power procurement costs and roughly $2 billion in non-cash expenses related to its employee donation matching program. More notably, the company disclosed total commitments for computing power procurement and infrastructure spending reaching $895.4 billion.

According to Reuters, investors are currently awaiting Anthropic's October revenue data, hoping to use it to judge whether the company can reverse its recent growth slowdown. Revenue performance, enterprise client usage, and computing cost control capabilities will be the core metrics investors focus on questioning during roadshows.

Record-Breaking Fundraising Size Expected, Signaling Role Highlights Industry Trends

As one of the first companies to make developing cutting-edge AI models its core business and attempt to enter the public market, the scale and pricing of Anthropic's offering will provide an important reference for the entire AI industry.

The market is closely watching whether Anthropic's IPO can rival the record-breaking listing performance of Elon Musk's SpaceX. SpaceX was valued at approximately $1.77 trillion in its previous issuance, raising between $75 billion and $86.2 billion.

Meanwhile, Reuters reports that Anthropic's issuance scale could even reach $100 billion.

Co-led by Goldman Sachs and Morgan Stanley with 20 other banks participating, the actual subscription levels for this mega IPO will send a clear signal: after significant corrections in AI concept stocks, exactly how high a premium the public market is willing to pay for the long-term growth potential of frontier AI companies.