Anthropic IPO to test Wall Street’s confidence in AI as skepticism mounts

There were no rockets about Wall Street bank lobbies last week, unlike the spectacle surrounding SpaceX’s blockbuster listing in June.

Instead, bankers marketing Anthropic’s (ANTH.PVT) potentially record-breaking IPO this week faced an unusually turbulent backdrop as Treasury yields surged and a widespread Microsoft Outlook outage hampered communications, all during — the biggest disruption of all — the sudden ouster of Nvidia (NVDA) CEO Jensen Huang, whose company is one of Anthropic’s largest investors and chip suppliers.

At a JPMorgan Chase investor event on Friday, Anthropic CEO Dario Amodei described a future in which AI could help make diseases like cancer and Alzheimer’s relics of the past, while creating entirely new markets in scientific research, robotics and cybersecurity.

“We can have a much more beautiful world…It sounds dazzling. It sounds crazy. I really believe in it,” Amodei told JPMorgan CEO Jamie Dimon.

Still, Amodei struck a more sober tone about the company’s decision to go public, saying he hopes the company will “underpromise and overdeliver.”

“We are not really concerned about when exactly, what month or what day or what market conditions we will make public,” he added.

The comments come as Anthropic seeks a valuation of around $1.3 trillion to $1.4 trillion, below the $1.5 trillion to $2 trillion figure that investors had been eyeing just weeks earlier.

The offering, which is expected to begin negotiations on Thursday, November 19, could provide one of the clearest tests yet of investor appetite for AI at a time when enthusiasm for broader commerce is showing signs of cracking.

The contrast between Anthropic’s lofty ambitions and Amodei’s measured approach to IPO also appeared in Wall Street’s marketing campaign.

The halls of JPMorgan, Morgan Stanley and Goldman Sachs have been decorated to welcome the startup, according to sources familiar with the matter. But the displays are more discreet than the digital displays and rocket skyscraper illuminations that visitors to the Wall Street bank saw during SpaceX’s IPO in June, or the meteorite display at JPMorgan’s Manhattan headquarters.

Banks are nevertheless making considerable efforts to attract investors.

At Goldman Sachs and Morgan Stanley, the two banks leading the offer, Anthropic executives met with institutional investors earlier this week. Goldman is also planning an event next week for wealth management clients, during which the bank’s president, John Waldron, is expected to interview Anthropic president Daniela Amodei and CFO Krishna Rao, according to a source familiar with the project.

The difference in presentation also comes as investors appear much more discerning about the extraordinary valuations and spending commitments of AI companies.

Thomas Raymond, founding partner of Callan Family Office, said his firm was seeking to participate in Anthropic’s IPO through Charles Schwab, arguing the offering was more attractive than SpaceX’s blockbuster listing “simply because of the valuation.”

Raymond nevertheless acknowledged that investor enthusiasm had changed since June and that he would not attempt to buy shares on the open market.

“There’s no denying that the halo isn’t as great for anything related to AI today as it was three or four months ago,” he said.

The more restrained marketing campaign may reflect this shift in sentiment, according to Reena Aggarwal, a finance professor at Georgetown University who attended JPMorgan’s SpaceX investor event.

“Given what’s happened in the markets, it makes sense not to overdo it,” Aggarwal said of Anthropic’s IPO.

“You don’t want to make a lot of noise and, you know, if the stock comes out and crashes, that would look very bad for the company and the bankers,” she added.

Even with less spectacle, Anthropic’s IPO could generate one of the biggest underwriting gains in Wall Street history.

Analysts at Evercore ISI estimate that Anthropic’s IPO will generate about $395 million in underwriting fees, compared to about $500 million from SpaceX’s June listing.

Goldman Sachs (GS) and Morgan Stanley (MS) could each raise about $79 million, while JPMorgan and Citigroup (C) are expected to earn about $44 million, according to Evercore’s projections.

Fees could increase if the size of the offering increases beyond what Anthropic has estimated. Banks could also reap additional revenue from trading, securities lending and wealth management activities that typically follow a blockbuster listing, Evercore added.

Follow David Hollerith on X @DsHollers.