How Much Is Anthropic Really Worth?

Anthropic CEO Dario Amodei.

Investors are still digesting the news of NVIDIA CEO Jensen Huang's resignation and the implications for the AI industry; meanwhile, they are also pondering another difficult question: How much is Anthropic really worth?

If all goes according to plan, the market will provide an answer next week when the company goes public on NASDAQ. Anthropic has initially set its valuation range for the IPO at $1.25 trillion to $1.4 trillion, although several investors we spoke to expect the final pricing to be above this range. {#quote_.IXIC}

Samantha Lau, Chief Investment Officer of Janus Henderson Small Cap Growth, stated, "If the IPO pricing is above the preset range, it indicates strong underlying demand, which is crucial for driving investor participation."

This initial range is lower than the $1.5 trillion or even higher valuations previously expected by investment banks. Several investors mentioned that the lower limit of the range is directly suppressed by the financing news from OpenAI (OpenAI aims to raise $9 billion, with a cap of $11 billion). However, Anthropic's business scale has already surpassed that of OpenAI: it reported revenue of $17 billion in the third quarter, while OpenAI's revenue during the same period was $10 billion. From this perspective, Anthropic's current valuation range appears conservative.

One valuation approach: assuming Anthropic's annualized revenue approaches $100 billion by the end of the year (with an October figure of $81 billion) and that revenue doubles over the next two years. Taking an adjusted operating profit margin of 25% (higher than the 19% level in June), this revenue projection suggests that operating profit could reach approximately $50 billion by 2028. In other words, the current valuation range corresponds to an EBIT multiple of over 25 times for 2028.

John Belton, a portfolio manager at Gabelli Funds, is considering participating in Anthropic's IPO subscription. He said, "From an EBIT multiple of around 25 times, this valuation seems cheap compared to software stocks; slightly expensive compared to large tech giants. Overall, it seems reasonable. The key point of contention in this valuation range is not the multiple itself, but the core question: after achieving such a large revenue scale, can it maintain this growth rate?"

Morningstar analyst Ahmed Khan has given a valuation of $1.7 trillion. He predicts a compound annual growth rate of 47% for Anthropic's revenue over the next five years. In a research report dated November 11, Khan mentioned that even in his optimistic scenario (valuation of $3.4 trillion), if Anthropic's models develop to the point of self-training and continuous iteration, this optimistic valuation might still be conservative.

However, some investors pointed out that the valuation on Anthropic's first day of trading is not solely based on the company's short-term financial fundamentals.

Willy Lee, head of Neostellar Investment Company, said, "The core determinant of valuation is not entirely how much free cash flow this company can ultimately generate, but whether it can grow to the scale of Google or Microsoft, and how long it will take to do so." Neostellar manages an ETF that includes unlisted companies like OpenAI and Canva. Lee stated that Neostellar currently does not hold equity in Anthropic but invested in OpenAI over a year ago. {#quote_MSFT}

A key question: Will the turmoil in NVIDIA's management trigger significant volatility in the AI sector, thereby impacting Anthropic's IPO?

On one hand, NVIDIA's substantial investments have deeply supported the entire AI sector; if NVIDIA faces setbacks, it would not bode well for Anthropic's valuation. Gabelli's Belton pointed out that model vendors like Anthropic "benefit from the continuous output of various technological innovations from NVIDIA." "If NVIDIA undergoes a leadership change and the pace of technological iteration slows, the progress of cutting-edge model development and the efficiency of model deployment will inevitably be affected."

On the other hand, an investor from a large UK asset management firm (who is participating in Anthropic's roadshow and considering a subscription) suggested: Companies that can withstand this round of turmoil are those that are chip-neutral and not tied to a single chip manufacturer, and Anthropic has an advantage over OpenAI and Google in this regard.

This investor indicated that asset management firms wishing to participate in new IPOs almost always have to sell part of their holdings to free up funds. To allocate funds for Anthropic, they may need to reduce their positions in the AI infrastructure sector, namely semiconductor stocks. "Recent declines in semiconductors have already reflected this reallocation expectation."

Another issue weighing on Anthropic: a significant portion of its growth this year comes from its AI code assistant business; can it continue to expand rapidly and penetrate vertical industries beyond coding?

Neostellar's Lee said, "If you are optimistic about the long-term growth of AI, you need to confirm two things: Can Anthropic continue to grow the AI market beyond knowledge work? And can it capture the corresponding market share? Currently, it has not fully proven this, which is why many investors find it difficult to accept this valuation."

Ultimately, Anthropic's valuation largely depends on external conditions that it cannot control—these factors could hinder its growth or prevent it from obtaining sufficient scarce computing power to train and run models.

Janus Henderson's Samantha Lau said, "If I were a large-cap investor, I wouldn't be overly concerned about profitability; I would only care about financing, not just for Anthropic itself, but for the entire AI ecosystem's funding supply.",