'Very tough spot': Could Anthropic delay its IPO amid the AI stock selloff?

The selloff in tech stocks could force Anthropic to postpone its IPO or settle for a lower valuation, MarketWatch reports. One prospective investor said the valuation could be closer to $1 trillion, down from the $2 trillion investors had initially anticipated.

Current market conditions have put Anthropic in a “very tough spot,” Jay Goldberg, an analyst at Seaport Research Partners, told MarketWatch. Tech stocks have fallen over the last month amid expectations of higher interest rates, the conflict involving Iran, and rising debt across the AI industry. The U.S. midterm election outcome added to the pressure, with investors worried that a Democratic majority in Congress and victories by Democratic candidates for governor could slow data center construction.

Anthropic is aiming to go public before Thanksgiving, which falls on November 26 this year. Polymarket traders put the odds of Anthropic going public before December at 57%, down from just under 90% in late October.

Goldberg estimates that Anthropic has enough cash to last at least nine months if it postpones the IPO. As of September 30, the company had $95.6 billion in cash and cash equivalents on its balance sheet, according to its prospectus. The company has also entered into computing and infrastructure agreements totaling around $895.4 billion, with around $69.8 billion due by the end of September next year.

The bigger issue, Goldberg said, is that the offering has already been pushed back two or three times. Anthropic has never formally announced an IPO date, but the unofficial timetable has slipped. The company was initially expected to list in late September or early October.

Anthropic is more likely to move ahead with the IPO than postpone it, said Lior Prosor, managing partner at venture capital fund Deep33. He said the company and its underwriters could agree to a steeper discount to the anticipated valuation given the market volatility.

Earlier this year, investors expected Anthropic to go public at a $2 trillion valuation. Anthropic was also aiming to match or exceed the record proceeds from SpaceX’s IPO. After the sharp selloff in AI stocks on November 5, the Wall Street Journal reported that three major investors planning to participate in the IPO said the valuation would likely have to come down from the roughly $1.5 trillion expected before the selloff. One of the three said it could be closer to $1 trillion. The Journal also reported that the rout could make it harder to persuade institutional investors to take on more exposure to AI so soon.

Goldberg said Anthropic’s own financial results, disclosed in an amended prospectus on November 2, may have contributed to last week’s tech selloff. The company generated around $17 billion in third-quarter revenue, up 1,127% year over year and 47% quarter over quarter. That marked a slowdown from 144% quarter-over-quarter growth in the second quarter. On its IPO roadshow, Anthropic will have to explain to investors whether the slowdown reflects infrastructure constraints or weaker demand.

“The Anthropic roadshow, if it takes place, could be a positive catalyst,” Goldberg said. “But it could be a negative one, too.”

Anthropic declined to comment.