Investors have scaled back their expectations for Anthropic's IPO valuation. The company had been counting on a $2 trillion valuation.

Some of the current investors in Anthropic, the most valuable startup in the artificial intelligence sector, and some potential participants in its IPO are considering a lower valuation following the release of its latest financial results. Reuters reported this, citing four sources. In August, the Financial Times reported that Anthropic’s investors expected the company to go public with a valuation of $2 trillion. The company itself had the same hope, according to Reuters.

Investors who attended a meeting with Anthropic on Wednesday, October 14, discussed valuing the company at around $1.5 trillion in an IPO, according to three Reuters sources. At the same meeting, the AI startup reported that its third-quarter revenue increased by approximately 50% to $16.8 billion, and that the company posted adjusted profits for the second consecutive quarter.

But some investors were disappointed by the slowdown in quarterly growth: in the second quarter, for example, Anthropic’s revenue more than doubled compared with the first quarter, reaching $11.6 billion, sources told Reuters. This compounded industry-wide concerns about the rising cost of funding artificial intelligence development, the agency’s sources said.

Anthropic did not respond to requests for comment from Reuters.

In May, Anthropic was valued at $965 billion following a funding round, becoming the world’s most valuable startup and surpassing OpenAI, the developer of ChatGPT. By August, according to the Financial Times, investors were expecting a valuation of $2 trillion—such an offering could have surpassed SpaceX’s listing in size and become the largest IPO in history. The startup is aiming for a $2 trillion valuation, Reuters reported in late September, citing an unpublished Anthropic IPO prospectus.

The cooler-than-expected reception of Anthropic’s IPO could affect the entire AI market, whose near-term prospects investors largely link to the success of this offering—which could be followed by a potential IPO for OpenAI next year, Reuters now reports. The agency believes that the disappointing results of Anthropic’s offering could heighten investors’ concerns about the scale of AI infrastructure development.

The IPO market has recently faced a number of setbacks. For example, in September, data center operator SB Energy postponed its listing, and nuclear technology company Holtec Nuclear scrapped its plans to go public.

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