SINGAPORE – Anthropic’s filing of its initial public offering (IPO) on Oct 26 gave the stock market a much-needed boost, with both the S&P 500 and Nasdaq closing higher after declines over the last few weeks led by waves of tech stock sell-offs on Wall Street.
The timing could not have been better, as more than a third of S&P 500 companies are expected to report earnings this week. These include hyperscalers such as Google’s parent company Alphabet, Microsoft and Amazon, whose results will indicate whether their hefty AI investments are translating into growth.
Anthropic’s investor lineup to date also signals confidence in its market potential and enterprise adoption. Amazon, Temasek and Blackstone were among the significant backers of its US$65 billion Series H funding round, co-led by GIC in May, which valued the company at US$965 billion.
But the IPO filing comes on the heels of heightened AI safety fears triggered by Anthropic chief executive Dario Amodei’s warning in September and subsequent calls from industry leaders for restraint on AI development.
These raise further questions about whether the company – one of the world’s leading developers of large language models (LLMs) – can not only turn sustainable earnings growth into profitability, but also keep the guardrails on to prevent any AI misuse.
Are Anthropic’s disclosures a boon or bane?
Risk disclosures made up more than 90 pages of Anthropic’s prospectus, which is unprecedented for an IPO, analysts told The Straits Times.
While this would likely have rung alarm bells for many investors interested in the stock, analysts welcomed this level of transparency.
The most frightening concern is Anthropic’s warning that the probability of advanced AI systems, including its own, posing “catastrophic or existential risks to humanity” would increase as they substantially automate AI research and development beyond humans’ ability to evaluate and safeguard them.
In addition to irreversible code changes and unwarranted data modification, it said its models could be used to develop biological and chemical weapons or for domestic surveillance and large-scale cyberattacks.
AI’s threat to humanity was first raised in September by an Anthropic scientist, who publicly stated that there was a “more than 10% chance” that AI could cause human extinction in the next decade.
The company’s IPO disclosures could intensify regulatory scrutiny and public concerns over AI safety, particularly amid rising geopolitical tensions and the potential misuse of increasingly capable models, said Serena Lim, research analyst at Phillip Securities Research.
In the near term, investors may apply a higher risk premium to AI companies as they reassess potential misuse, cybersecurity and regulatory risks.
But over the long term, such disclosures are more of a boon than a bane as they demonstrate the management’s awareness of these risks and its stated commitment to balancing commercial interests with AI safety, said James Ooi, chief market strategist at Tiger Brokers.
Lim added that these disclosures strengthen accountability across the company and the wider AI industry, and help investors better assess risks that are inherently difficult to quantify.
UOB Kay Hian’s director of wealth management Kenneth Goh mused: “I cannot recall a major US prospectus warning that its own product could pose existential risks to humanity, but companies have flagged unusual risks before.”
He noted how ride-hailing app Uber disclosed in its 2019 prospectus an incident involving its self-driving vehicle which caused the death of a pedestrian in the year before.
Will Anthropic’s IPO be a repeat of SpaceX?
Anthropic’s market capitalisation is forecast to grow to between US$1.5 trillion and US$2 trillion when it goes public, putting it in the same league as Elon Musk’s SpaceX, which was valued at US$1.8 trillion ahead of its Nasdaq debut in June.
Like SpaceX, Anthropic is seeking to raise substantial capital – around US$100 billion – at valuations that reflect high expectations for future growth.
But the two blockbuster IPOs also reflect vastly different business models in the AI space.
SpaceX’s business spans multiple industries. In addition to its Grok LLM, it builds space rockets and operates Starlink, a satellite internet service.
These, Ooi said, are longer-term projects with less predictable commercial outcomes.
On the other hand, Anthropic’s business model is arguably more straightforward, with clearer revenue streams supported by growing enterprise AI adoption and demand for its services, he noted.
Anthropic more than tripled its 2026 first-quarter revenue to US$16.8 billion in the third quarter.
It also said it was profitable on an adjusted basis in the third quarter, after reporting a widening first-half loss to US$80.7 billion from US$13 billion a year earlier, though this was largely due to a rise in the fair value of bonds convertible into shares.
Investors will also be keenly watching how Anthropic’s shares perform after the company goes public.
Just a month after SpaceX’s listing, the stock fell over 41% from its peak to slightly below its IPO price, wiping out more than $1 trillion in market capitalisation.
Despite the volatility, investor appetite for SpaceX remains strong, with the stock among the top three traded on MooMoo and the top 10 on Syfe.
Similarly, demand for Anthropic’s shares is expected to be high amid interest in AI, and the company could experience a similar volatile price swing – especially if it, like SpaceX, floats only a small slice of its shares in its first month of trading.
“The question is no longer whether these businesses are real – that debate is settled – but what the right price is, and whether retail investors are prepared for the volatility that comes with the process of figuring it out,” said Ritesh Ganeriwal, managing director of Syfe.
UOB Kay Hian’s Goh also cautioned that public shareholders would have limited ability to challenge the founders’ control or influence the board composition. The company’s founders would hold 50.1% of the voting power through a single special share, while its independent governing body, called the Long-Term Benefit Trust, would appoint a majority of the board.
Risks of an AI revaluation?
Surging capital expenditure among hyperscalers to support the development of AI is fuelling mounting sentiments about unsustainable spending leading to a possible revaluation of the sector.
Alongside safety risks, Anthropic’s prospectus also highlights the risk of substantial long-term infrastructure commitments against less predictable revenue.
This would not only weigh directly on the company but also extend implications across the sector, particularly if financing constraints lead to slower infrastructure spending or safety concerns prompt tighter regulation, Tiger Brokers’ Ooi said.
But the decision to go public amid the volatility could also be seen as a “vote of confidence” that the industry can sustainably finance its expansion, with Anthropic armed with sizeable financial resources – over US$112 billion in cash and cash equivalents as of June – to support its infrastructural investments.
This offers some reassurance to AI hardware suppliers, for whom the financial strength of customers is becoming almost as important as demand itself, he noted.
Ultimately, the impact of a sector re-rating will depend on whether companies can translate strong demand into durable revenue growth and sustainable margins while managing these risks, noted an analyst from MooMoo Singapore.
“By the time the IPO happens, we should have a much clearer picture of performance across the AI space, with initial Q3 earnings from companies (on the semiconductor value chain) like ASML and TSMC offering an optimistic outlook for the sector. This should work in Anthropic’s favour,” Michael Field, chief European equity strategist at Morningstar, wrote in a note.
