Anthropic’s IPO Is Both Boom and Bust for Big Tech

Dario Amodei had a message in the closing remarks of Anthropic’s IPO roadshow: “Cancer, Alzheimer’s, heart disease, mental illness, these will be relics of the past in less than a decade.”

It’s a big promise, and he seems to have secured some big buy-in; Bloomberg reported Wednesday that the orderbook for the IPO, widely expected to hit next Thursday, is already multiple times oversubscribed. In fact, at a price range of $70 to $78 per share the debut is likely to raise $90 billion, an all-time record. Take it as a sign that excitement for the first bite at a pureplay AI lab is enough to override bubble fears. Some of the biggest beneficiaries will be its (theoretical) bubble co-habitants.

Return to Office

The Claude-maker is targeting a valuation of around $1.4 trillion to $1.5 trillion, massive but a tick below previous expectations. Either way, Big Tech will be happy. Google and Amazon stand as Anthropic’s two largest outside shareholders, collectively owning about a quarter of shares after buying in low in the early days, while Microsoft also has a stake from an early investment. Amazon could see its $18 billion investment soar to a $250 billion valuation next week, large enough to “forever change” the e-commerce and cloud computing giant per CEO Andy Jassy.

That valuation is still based on a projection-slash-hypothetical “that there will be new commercial advancements and product developments in AI that will drive faster new spend that we can’t conceive of yet, that there will be another coding agent revolution,” Ara Kharazian, lead economist at Ramp, told The Daily Upside. The promise is strong enough for Goldman Sachs, the IPO’s lead investment bank, to forecast annual revenue of $600 billion by 2030, or roughly 12 times its expected revenue this year. In the meantime, Anthropic already has its next revenue stream idea in mind, and it’s one that its Big Tech backers are quite familiar with:

• On Tuesday, Anthropic unveiled a suite of office productivity applications including a video call assistant, a collaborative tool called Claude Whiteboards and Claude Sheets, which, yes, is just an AI-ified ripoff of Microsoft Excel and Google Sheets.
• Yes, that means Anthropic is directly squaring off with some of its biggest backers; Microsoft shares slipped 3% on Tuesday and more than 2% on Wednesday following the apparent asSaaSination attempt. On the other hand, adoption of the Claude tools could still benefit Big Tech backers, who sell Claude tools through their cloud computing platforms.

“There is a circularity in investing here, partly driven by not wanting to be left out,” Aswath Damodaran, a professor at Stern School of Business at New York University, told The New York Times.

Code Red: The second assumption of the AI trade, Kharazian says, is that “the coding agent revolution is still ongoing.” That will require much stronger adoption. Just 1% of businesses — primarily VC-backed companies in tech, finance and technical services using coding tools — drive 80% of OpenAI and Anthropic’s revenue, Kharazian’s analysis of Ramp’s corporate spending data found. “That spend is already starting to slow down because of a combination of factors, mainly price cuts, and that it’s just getting easier and more fashionable to control your AI spend,” he said. Translation: Tokenmaxxing didn’t even make it into the New Year.