Anthropic Raises Stakes in Wall Street’s IPO Gold Rush

Another day, another historic IPO. 

With the SpaceX debut just days away, Wall Street’s marquee investment banks are already lining up for the right to underwrite a roughly $1 trillion IPO from Anthropic, expected sooner rather than later after the firm’s confidential registration filing with the Securities and Exchange Commission this week.

To Fee or Not to Fee

Morgan Stanley, Goldman Sachs and JPMorgan Chase are all shoo-ins for large roles in Anthropic’s IPO. After all, private companies don’t raise more than $100 billion in funding without getting a little cozy with Wall Street’s biggest institutions; one Polymarket contract asking who will lead the IPO gives Morgan Stanley a slight edge among the three heavy favorites as of Tuesday afternoon. It’d be a nice win for the bank, which led all Wall Street banks in equity capital markets revenue last year but has recently lost ground to Goldman Sachs. If Goldman gets the nod, it’d go two-for-two in securing the premier position for this year’s mega-IPOs after recently scoring the top slot among the 23 banks underwriting the SpaceX IPO. 

Just being involved in the process is a prize. In March, The Information reported that bankers involved in taking the company public expect it to raise a monstrous $60 billion in its IPO, at a roughly $1 trillion valuation, though that was before Anthropic’s most recent private fundraising round. Everyone’s going to want a piece of that pie, though if the SpaceX IPO is any indication, underwriting a giga-sized IPO might require one small concession:

• According to a Bloomberg report on Tuesday, Elon Musk’s conglomerate is attempting to negotiate its IPO underwriting fees to a mere 0.75%. For reference, a ho-hum $1 billion IPO typically comes with fees of 4% to 7%, though Wall Street will take fees slightly above 1% for mega-IPOs.
• Still, even a smaller-than-usual 0.75% underwriting fee would net underwriters some $500 million, as SpaceX seeks to raise a record-breaking $75 billion from the public market while setting its trajectory toward a $1.8 trillion valuation.

Liquid Death: Of course, banks will get another shot at a jackpot whenever OpenAI gets itself across the IPO finish line. But being slow out of the gate may have consequences for Sam Altman’s firm. “SpaceX is going to consume an absolute ton of capital, and the guy that goes second is going to have a better position than the guy that goes third,” Patrick Healy, founder of IPO advisory firm Issuer Network, recently told The Wall Street Journal. Worse for OpenAI, Google just cut in line. On Monday, the internet giant said it is seeking to sell $80 billion in stock to fund its ongoing AI infrastructure buildout, which is now eating into its substantial free cash flow, and analysts say other hyperscalers could soon follow suit. The clock’s ticking, Sam.