Just Say No to Anthropic's IPO
I am not an investment advisor, and you must make your own investment decisions, but this is why I personally would not touch their IPO.
TL;DR
- Anthropic is targeting an IPO valuation of up to $1.4 trillion.
- The company has historically been unprofitable and faces nearly $900 billion in future liabilities.
- Revenue growth has slowed from 147% in Q2 to 47% in Q3, indicating a decline from peak 'tokenmaxxing' trends.
- Competition from Chinese AI companies has also begun to impact Anthropic.
- A graph from TickerTrends suggests a significant loss of momentum in the company's growth trajectory.
After a bumbling start …
… Anthropic just announced that it is aiming to IPO at “up to” $1.4 trillion (more likely a bit less), an astronomical sum for a company that has (with the possible exception of one anomalous, heavily subsidized quarter) has never made a profit and that has nearly $900 billion in future liabilities.
The Amended IPO itself is actually candid about the issues, to some degree:
The whole idea that they might be worth trillions mostly comes from projections like this absurd but popular one (try not to vomit when you look at the Y axis) made back in May, at the peak of the tokenmaxxing mania:
Predictions like that were predicated on the idea that Anthropic’s revenue would continue on the meteoric growth trajectory that tokenmaxxing drove.
The trouble is that it didn’t.
Quarter 2 growth was 147% compared to Q1, but Q3 wound up being a mere 47% compared to Q2. The decline of tokenmaxxing and the rise of good quality (if not quite top-tier) competitors from China began to take their toll.
A recent graph from TickerTrends (with a green line superimposed by me) makes it clear that the rocket has lost its zing: