Anthropic IPO Faces Uncertainty After Tech Market Rout
Anthropic's planned IPO faces volatility as Wall Street tech stocks tumble and investor Michael Burry warns against the company's massive infrastructure spending commitments.
The initial public offering of Anthropic, expected by November 30, faces significant uncertainty following a sharp decline in Wall Street tech stocks on November 5. The Nasdaq fell more than 5%, while the S&P 500 and Dow dropped nearly 4% and 3% respectively. This market rout followed election results that gave Democrats control of the House and Senate, raising concerns that the nationwide data center build-out could be hindered. Dina Powell McCormick, president of Meta Platforms, stated that building data centers will be harder under the new political landscape.
Despite the volatility, Anthropic filed for its IPO on the Nasdaq under the ticker ANT on October 26, with an expected valuation between $1.5 trillion and $2 trillion. The listing is viewed as a bellwether for AI firms ahead of a projected OpenAI offering early next year. In response to the anticipation, broker Axi launched pre-IPO perpetual futures contracts for both OpenAI and Anthropic, allowing traders to speculate on their valuations with leverage up to 25:1.
Investor Michael Burry announced he will not purchase Anthropic shares, citing an amended S-1 prospectus filed November 2. While the filing showed third-quarter revenue of $17 billion, Burry highlighted a $895.4 billion commitment to AI compute power and infrastructure. He warned that these costs exceed bullish revenue targets by roughly 12 times and that take-or-pay contracts could force the company to pay for unnecessary compute power, reducing its competitiveness.
