$1.5 Trillion Dream Shattered? Anthropic's IPO Caught in a Bind as Tech Stocks Plummet
- Core Viewpoint: Hit by the post-midterm-election tech stock rout and AI infrastructure policy risks, Anthropic's IPO plan is under dual pressure on valuation and timing. Its $1.5 trillion target valuation is being questioned by investors, and confidence in a listing this year is rapidly fading.
- Key Elements:
- Nasdaq constituents shed $2.5 trillion in market value in a single day, with more than 50 tech stocks falling over 10% on the day, led by data center and computing power concept stocks.
- Three major investors believe the $1.5 trillion valuation is difficult to achieve, with one expecting the actual valuation to be closer to $1 trillion and demanding a larger pricing discount.
- The tech sector has underperformed the S&P 500 by 10.7% over the past month, the most extreme single-month performance since May 2002, with retail selling pressure the strongest since the pandemic.
- Investors are waiting for the October revenue data left blank in the S-1 filing, while the company's continued quarterly losses and large-scale capital commitments further complicate institutional subscription decisions.
- OpenAI's latest funding round closed at only about $11 billion, less than half of its $30 billion target, with an actual valuation of $1.25 trillion below expectations, confirming the cooling financing environment.
- Anthropic faces multiple paths — a discounted listing, reduced fundraising, or a postponed IPO — with $146.6 billion in cash on its books as of September 30.
Original author: Zhao Ying
Original source: Wallstreetcn
AI star company Anthropic is facing a major test of its IPO plans. In the tech stock rout two days after the midterm elections, Nasdaq Composite constituents shed $2.5 trillion in market value in a single day, and the Anthropic IPO—once seen as a "must-buy"—is now under pressure on both core issues of valuation and timing.
On Thursday, according to The Wall Street Journal and Reuters, people familiar with the matter said that three major investors planning to participate in the IPO have explicitly stated that the $1.5 trillion target valuation may be difficult to achieve, with one believing the actual valuation may be closer to $1 trillion. At the same time, some investors have directly questioned whether the roadshow can start as scheduled in the week of November 9, and market confidence in whether Anthropic can complete its listing within the year is rapidly fading.
The situation has far-reaching implications for the entire market. Anthropic has deep business ties with tech giants such as Google, Amazon, and Nvidia, and its IPO was originally expected to break the historical record set by SpaceX in June this year and become the largest public offering ever. If the listing plan is derailed or forced into a significant discount, it could further weigh on already fragile sentiment in the AI sector and put pressure on the broader market, which is heavily weighted toward tech stocks.
Market "Bloodbath": AI Confidence Faces Its Most Severe Test
The trigger for this round of tech stock selling was this week's midterm election results. The results brought a group of AI policy skeptics into the centers of power, and multiple states passed moratoriums that could delay U.S. data center construction, directly striking at the core of the AI infrastructure investment thesis.
In the two trading days that followed, AI-related assets were sold off en masse. More than 50 S&P 1500 tech stocks in the Nasdaq fell more than 10% in a single day. Data center and computing power concept stocks such as CoreWeave, Nebius, and IREN led the declines, each having seen their market value halve over the past month. Credit default swap spreads covering CoreWeave and SpaceX both hit record highs, and market-implied default expectations for the coming years rose significantly.
Keith Lerner, chief investment officer at Truist Advisory Services, said the tech sector has underperformed the S&P 500 by 10.7% over the past month, the most extreme single-month underperformance since May 2002. He described the current selloff as "uncomfortable but not unusual," while warning that "the rubber band is being stretched tighter and tighter." Vanda Research data shows that retail selling intensity is the strongest since the COVID-19 pandemic.
Microsoft also tightened oversight of some data center projects of emerging cloud service providers such as Nebius, IREN, and Nscale during the same period, further intensifying market concerns about a slowdown in AI infrastructure investment.
Valuation Disagreements Surface as Investors Demand Bigger Discounts
Anthropic originally planned to complete its listing in the week before Thanksgiving, raising up to $100 billion at a valuation of about $1.5 trillion. Earlier this year, the market had once expected its valuation could reach as high as $2 trillion.
Now, according to Reuters citing four people familiar with the matter, some investors have come to view $1.5 trillion as a valuation ceiling rather than a reasonable baseline, and are demanding a larger pricing discount before they are willing to lock in subscription commitments. Investors' concerns stem not only from market volatility but also from scrutiny of Anthropic's fundamentals—the company continues to post quarterly losses and has taken on large-scale capital commitments to AI infrastructure construction partners.
Investors are also waiting for the October revenue figures left blank in Anthropic's latest S-1 amendment to assess whether the company has regained momentum after a slowdown in growth in recent months. The absence of this key data makes it harder for institutional investors to make large bets in the current market environment.
According to The Wall Street Journal, another major investor said bluntly that even if the market rebounds, persuading institutional investors who have just suffered losses in this selloff to once again make heavy bets on the AI sector remains a huge challenge. This investor did not rule out the possibility of Anthropic delaying its listing.
List or Wait? Anthropic Faces a Dilemma
Anthropic executives and their advisers are expected to meet in the coming days to discuss next steps for the IPO. According to people familiar with the matter, the company deliberately avoided publicly committing to a specific timetable throughout the preparation process in order to preserve flexibility for adjustment. As of September 30, the company had $146.6 billion in cash on its books.
Under external pressure, Anthropic faces multiple options: proceed with the listing at a lower valuation, reduce the size of the fundraising, or simply postpone until market conditions improve.
However, delaying the listing is not without cost. A delay could further exacerbate concerns about the health of the AI ecosystem, especially against the backdrop of clear political signals that data center construction will be constrained. At the same time, as one of the highest-valued AI companies, if Anthropic is seen as struggling to complete financing, it would have a negative spillover effect on the overall market valuation of large tech companies that are heavily weighted in portfolios.
By comparison, the experience of AI competitor OpenAI similarly confirms the cooling of the current financing environment. According to The Wall Street Journal, OpenAI's latest funding round has so far raised only about $11 billion, less than half of its initial $30 billion target, and the actual transaction valuation was also below previous expectations, settling at $1.25 trillion.
Rick Meckler, a partner at Cherry Lane Investments, remains cautiously optimistic about the market's long-term prospects: "These companies will eventually become part of the future, they will eventually go public, and investor interest is still there. Private market valuations have been rising for a long time, and some pullback now is normal." But under current market conditions, whether this optimism can support Anthropic in completing its listing at its desired price remains to be seen.
