Just over a month ago, the exclusive dance in which tech companies, semiconductor manufacturers, data center operators, and cloud infrastructure providers spun endlessly came to a sudden halt, symbolizing the new reality for members of the 'AI club.' With the music stopped, the criticisms of those who saw a certain bubble in the valuations of these companies became clearer. Anthropic, which announced its desired price range yesterday, is the latest victim. It is the first 100% pure AI company. It aimed for a valuation range of between $1.5 and $2 trillion, as had been leaked to the market weeks ago, and the reality is that the Amodei brothers, leading the U.S. firm, will have to settle for up to 30% less than the initial estimate, as the IPO, set for November 19, chose an opportunity window that has gradually closed.
On October 6, the semiconductor market and U.S. technology, closely related, peaked. Since then, stock market crashes have followed in such a way that the international benchmark, the Philadelphia Semiconductor Index, has plummeted 25% since then. The hostile climate towards AI has caused companies worldwide to postpone their IPO plans or settle for more adjusted valuations. The most notable was the Australian company Firmus, backed by Nvidia, which decided to cancel its plans a month ago when it aimed for a capitalization close to $30 billion. It should be noted that OpenAI postponed its debut to 2027 in mid-September due to market nervousness. This directly ties into another elephant in the room: the enormous funding needs of major American tech companies for AI development alongside the three largest debuts in history, that of SpaceX in June, Anthropic in a week, and the postponed one from OpenAI. Together, these three companies aim to raise a total of $230 billion from investors in just over nine months.
Anthropic presents itself to investors with the goal of raising nearly $90.35 billion, excluding the green shoe option (over-allotment option), if it achieves the best valuation. If it were to fall within the lowest price range, it would exceed $83.75 billion, enough to make Anthropic the largest IPO in stock market history, although its total capitalization would not initially surpass SpaceX's $1.75 trillion, which debuted on June 12. The target communicated yesterday to the SEC, the U.S. regulator, is to achieve a share price between $70 and $78, which would equate, in the most optimistic scenario, to about $64.35 billion from new investors, to which the private placement among U.S. tech oligarchs would be added.
In total, the company expects to place around 825 million shares in two large equity packages. The first, for 801 million shares, is intended for the general public, institutional, and retail investors. The company will reserve a portion for small investors, including in Spain, although details are yet to be revealed to the German regulator, Bafin. There will be a second tranche of another 23.6 million shares coming from current shareholders seeking liquidity and to dilute their stake in Anthropic. Additionally, there will be a private placement among some of the largest U.S. companies. According to the company, Google, Nvidia, Advanced Micro Devices, Broadcom, Micron Technology, Microsoft, and TSMC will individually acquire a total of $26 billion in Class N common stock through an exclusive placement reserved for these companies, at a price per share equal to the IPO price.
For this, in a theoretical exercise published by Anthropic itself, considering that the placement closes at an average price (of $74), Google and Nvidia will spend $10 billion, Advanced Micro Devices another $2.5 billion, Broadcom, Micron, and Microsoft another $1 billion, and TSMC Partners will invest an additional $500 million.
The seven founders of Anthropic, including siblings Daniela and Dario Amodei, will maintain control of the company by creating a specific share that will give them control of 50.1% of the company's voting rights.
In any case, with its nearly $1.4 trillion, it would not be the largest publicly traded firm in the world. It would fall behind giants like Apple, Nvidia, Microsoft, Alphabet, Amazon, TSMC, Meta, Broadcom, Tesla, or SpaceX among others, all above this figure. And this is considering that Nvidia's recent losses, the largest semiconductor company in the world, in the last five weeks exceed the entire market value expected for Anthropic. Since then, the company led by Jensen Huang, now under scrutiny due to his extramarital relationships with a Chinese spy, has lost nearly 30% of its capitalization, with over $1.7 trillion in the U.S. market. Nvidia has faced significant challenges recently. First, it was the Democratic victory in the midterm elections in the U.S., the results of which were made public early Wednesday (Spanish time), and this weekend the public acknowledgment of a affair involving Huang following an unprecedented FBI investigation. Even President Donald Trump came to the defense of the Chinese magnate.
From the election and the historic defeat of the Republican leader, a grim conclusion was drawn for everything surrounding AI: the fear, based on the political programs and promises of Democratic candidates, of increased regulation, a slowdown in development, and greater scrutiny in the construction and funding of data centers. The market reading is that companies linked to artificial intelligence will slow their growth. And the question is whether the bubble has started to burst. Another example of this is how the bullish boom of the Kospi, South Korea's index, has deflated. The frenzy unleashed by entering a market where two chip companies dominate is now history. Samsung and SK Hynix represent over 70% of the capitalization of the entire index, and they were the ones that propelled it to stardom in spring and led it to panic selling since June after plummeting 41%. Previously, it had risen 130% in six months. And ahead still lies the third chapter of the mega IPOs of AI: OpenAI. Sam Altman will take note of the exit of the creator of Claude in eight days. A final funding round two weeks ago valued the creator of ChatGPT at $1.25 trillion.