By Echo Wang
Nov 10 (Reuters) - Anthropic is targeting a valuation of up to $1.02 trillion in its landmark U.S. IPO, its filing showed on Tuesday, well short of the previously discussed amount in the latest sign of cooling investor appetite for AI.
The AI lab and some of its investors are aiming to raise up to $64.4 billion by selling 825 million shares in the IPO in an indicative price band of between $70 and $78 per share.
Reuters had exclusively reported on Tuesday details of Anthropic's blockbuster
deal.
Some prospective investors have questioned whether Anthropic's previously discussed $1.5 trillion valuation was too high, particularly given the company's substantial infrastructure commitments and the recent volatility in AI-related stocks.
At one point this year, investors expected the IPO to take place in October and to seek a valuation as high as $2 trillion.
The company is launching the roadshow for a historic share sale that is expected to set a benchmark for the sector, following years of hype that fueled a massive influx of capital into AI companies.
Details of the blockbuster deal were briefly circulated to investment banks before being retracted late on Monday, according to emails seen by Reuters.
The second half of the year has brought a reckoning for the AI boom, as investors question whether returns will justify the massive spending and mounting debt costs in an elevated interest-rate environment.
Concerns are also rising over the sustainability of the investment cycle, with questions around circular financing arrangements, the risk of infrastructure overcapacity and how quickly companies can turn their AI investments into revenue.
The tech-dominated Nasdaq notched its deepest one-day drop in 19 months on Thursday, wiping out trillions in market value on fears of more AI scrutiny, particularly on data center construction, after Democrats' massive gains in the US midterm elections.
Greater oversight and potential regulatory hurdles could complicate the infrastructure buildout underpinning the AI boom.
But Anthropic's growth has so far defied those concerns, propelled by surging demand for its products, particularly its viral Claude models.
Its filing spoke of a vision to "bring forth an age of miracles," even as it warned of existential risks to humanity, laying bare the extraordinary promise and profound uncertainties at the heart of the AI boom.
Anthropic will also raise $26 billion via a separate private placement deal with cornerstone investors including Alphabet's Google, Nvidia, Advanced Micro Devices.
Together with investments from cornerstones, which include Broadcom, Micron Technology, Microsoft and TSMC, the Anthropic share offering will raise a total of up to $90.4 billion.
Certain Anthropic board members and entities affiliated or associated with them have indicated interest in buying up to $303 million of shares from the offering.
GROWTH COMES WITH RISKS
Anthropic's net loss narrowed in the third quarter as revenue jumped 47% from a quarter earlier to $16.96 billion, though the pace of growth slowed. It had surged 144% in the prior quarter.
The company attributed the breakneck growth to the rapid adoption of Claude, including specialized products targeting industries such as healthcare, financial services and legal services.
The prospectus outlined a range of risks facing both the company and the technology, warning that competitors could gain an edge by developing models faster and that advances in AI could outpace Anthropic's ability to put adequate safety and security measures in place.
The warnings come amid a growing number of incidents involving "rogue" AI agents that have escaped sandboxed environments and breached private company systems, alongside concerns that increasingly capable AI tools could be used by hackers to penetrate protected networks.
Anthropic's ambitions also come with enormous infrastructure costs. The company has nearly $900 billion in computing commitments with partners including Amazon and Alphabet's Google, highlighting how its rapid growth depends on securing vast amounts of future computing capacity, some of which relies on financing beyond the company's control.
The listing move follows Elon Musk's SpaceX raising $75 billion in the world's largest IPO in June, at a valuation of nearly $1.75 trillion, excluding additional shares purchased by underwriters through the greenshoe option.
Anthropic, locked in a fierce battle for market share with rival OpenAI, was last valued at $965 billion in a private funding round. The company's prominent investors including Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital.
Anthropic, led by CEO Dario Amodei, was founded in 2021 by a group of researchers who left OpenAI following disagreements over governance and AI safety.
The shares are expected to trade on the Nasdaq under the ticker symbol "ANT" after the IPO closes, which would make Anthropic one of the few major companies to go public this fall as higher borrowing costs, geopolitical turmoil and rising bond yields weigh on the IPO market.
Goldman Sachs and Morgan Stanley are leading the syndicate of investment banks underwriting the offering.
(Reporting by Echo Wang in New York and Manya Saini and Arasu Kannagi Basil in Bengaluru; Editing by Sumeet Chatterjee, David Goodman, Jan Harvey and Arun Koyyur)
