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Anthropic bankers are considering raising the price of AI Group’s IPO after receiving strong investor demand, less than a day after revealing it would target a $1.4 billion valuation when it lists next week.
Bankers said they planned to raise the stock price above the $70 to $78 range announced Tuesday in a filing, which could raise the valuation target to $1.5 trillion or more in the coming days, according to five people familiar with the matter.
An increase in the stock price would also increase the total funds raised in the IPO beyond $100 billion. Three of the company’s backers said Anthropic was now focused on raising as much as possible through listing to support its heavy spending on computing power, rather than maximizing its valuation.
Anthropic said Tuesday it plans to raise up to $64 billion in one of the largest IPOs of all time, with the option to extend that by nearly $10 billion via a “shoere” option if the deal is oversubscribed.
The company also announced a private placement as part of the deal, in which strategic partners including Google, Nvidia and Microsoft will together invest $26 billion in the company at its IPO price.
The bankers involved in the deal, led by Goldman Sachs and Morgan Stanley, are expected to continue their action by raising their stock prices after receiving strong indications of demand as they begin the roadshow on Tuesday, people familiar with the matter said.
Tuesday’s filing implied a valuation range of between $1.26 billion and $1.41 billion, calculated on a fully diluted basis that also takes into account employee stock options and other restricted stock.
The listing, expected next week, comes at a precarious time in financial markets, days after the U.S. midterm elections sent tech stocks tumbling in a $3.2 billion rout that unnerved Wall Street.
Although the market has since rebounded, the decline showed how quickly the market can turn, with leverage magnifying the returns and losses of many investment firms.
“A weekend is an eternity in this market,” said one major investor.
Anthropic investors have moderated their ambitions for a $2 trillion IPO in recent weeks as doubts about the sustainability of the AI boom have grown.
The company has tried to allay concerns that its revenue will be able to keep pace with its plans to spend about $900 billion on computing power and infrastructure in the coming years. Anthropic told investors that its annualized revenue reached $81 billion in October and that its third-quarter revenue was $17 billion.
OpenAI, Anthropic’s main rival, told investors on Tuesday that its revenue jumped 50 percent to $10 billion in the third quarter, a person with direct knowledge of the matter said.
Morningstar analysts said $1.7 trillion was “net fair value” but that Anthropic could be valued between $500 billion and $3 trillion depending on the rate of adoption of its tools, reflecting the enormous uncertainty about the sustainability of the AI boom.
Some investors who secured an IPO allocation have begun offering part of their stake to other buyers, mimicking similar transactions that took place before SpaceX’s June debut.
A New York brokerage announced Tuesday that it was selling “up to $500 million” of Anthropic stock on behalf of a venture capital firm. Private shares are priced 4 percent higher each time the AI company prices its IPO, according to posts seen by the FT.
Another venture capital group is offering $1.25 billion in shares, through a special purpose vehicle, which can be used by pre-IPO investors to hold and sell portions of their position, at a valuation of $1.5 billion.
Anthropic has sought to crack down on the use of SPVs, warning that any offerings made by certain pre-IPO secondary brokers would not be recognized by the company.
Bloomberg was the first to report details of the investor side deals. Anthropic declined to comment. Goldman Sachs declined to comment. Morgan Stanley did not immediately respond.
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