Anthropic’s Dario Amodei Super-Sizes Pitch for $90.4B IPO
Anthropic CEO Dario Amodei told JPMorgan Chase CEO Jamie Dimon on Friday that more cash would help the AI company manage computing risks. Anthropic expects to price its IPO Wednesday and start trading November 19, seeking up to $90.4 billion at roughly a $1.4 trillion valuation.
Anthropic’s Dario Amodei, the AI company’s chief executive, made his case to Wall Street on Friday, saying a public listing would give the firm a financial cushion as it bets heavily on computing power. Anthropic expects to price its initial public offering (IPO) on Wednesday and begin trading Thursday, November 19.
The company is seeking to raise as much as $90.4 billion through the IPO and a concurrent private share sale, at a valuation of approximately $1.4 trillion, according to its IPO website. Just weeks ago, investors expected it to seek a valuation as high as $2 trillion.
A conversation with Jamie Dimon
Amodei spoke with JPMorgan Chase CEO Jamie Dimon in a livestreamed event at JPMorgan’s Manhattan headquarters. It was one of Anthropic’s final stops this week as it tries to build investor demand.
He described a future in which cancer, Alzheimer’s and heart disease are considered relics of the past, and AI agents handle a growing number of complex tasks safely. “It sounds starry-eyed. It sounds crazy. I really do believe it,” Amodei said.
He also said the technology is creating new markets. “You’re on an exponential of cognition, and as the exponential proceeds, new markets become possible,” he told Dimon.
The computing dilemma
Amodei called securing enough computing power to support growth without overspending the company’s “deepest business dilemma.” Anthropic must commit to expensive infrastructure well before it knows how much demand its AI products will generate.
Asked why the company is going public now, he pointed to the need for extra cash to manage that uncertainty. “Just the more cash we have on hand, the more buffer we have between those two things,” he said.
Anthropic generally buys less capacity in advance than its growth projections might justify, then adds more if demand exceeds expectations. “We actually tend to buy on the low side,” Amodei said.
He also suggested the company is not chasing the highest valuation possible. Anthropic wants to “underpromise and overdeliver,” he said.
Market headwinds and bank fees
Conditions for the offering have worsened in recent weeks. Borrowing costs have climbed, political backlash over US data center development has won over midterm election voters, and turmoil surrounds Nvidia, one of Anthropic’s biggest chip suppliers and investors.
In an IPO roadshow video earlier this week, Anthropic stressed the durability of its revenue growth. It also said it uses its own Claude technology to improve efficiency and control costs.
JPMorgan will lead US retail sales in the offering. With lead underwriters Goldman Sachs and Morgan Stanley, it is one of 19 Wall Street lenders helping the company go public.
Evercore analysts estimated on Wednesday that the banks could earn roughly $395 million from the IPO. JPMorgan would take home about $44 million, or about 0.1% of its fourth-quarter earnings per share, compared with the $75 million in underwriting fees it earned helping SpaceX go public.
