Anthropic IPO filing to put AI investment boom to the test

Oct 26 (Reuters) - Anthropic made its US IPO filing public on Monday, edging toward what could be the first stock market debut by a frontier AI lab and laying out the promise, costs and risks of building AI meant to transform the global economy. 

The IPO comes at a time when market volatility has thinned the fall listing calendar and rising borrowing costs have sharpened investor concerns over the debt-fueled AI investment boom.

Wall Street's main indexes were higher in morning trade with the S&P 500 up 0.5%. U.S. stock index futures got a brief boost after the IPO filing.

COMMENTS:

JOSH STEVENS, CHIEF INVESTMENT OFFICER, CRESALTA INVESTMENT MANAGEMENT, COLORADO

"I'm optimistic about AI as a technology. And Anthropic is certainly exciting. But are we going to rush in and buy at the IPO? No. Even great ideas or business models end up seeing their share prices come down to attractive levels during times when investors are reassessing demand and supply. And then, you've got an opportunity to go in and buy."

PETER ANDERSEN, FOUNDER OF ANDERSEN CAPITAL MANAGEMENT, BOSTON

"I think it's a significant milestone in the development of artificial intelligence. And the outcome of this IPO will be fairly indicative of the sentiment for continuing to support capital expenditures in the development of artificial intelligence."

THOMAS HAYES, CHAIRMAN, GREAT HILL CAPITAL, NEW YORK

"In the general sense of a business doing $16 or $32 billion annualized revenue, and losing $80 to $160 billion a year, a $1.5 trillion valuation seems rich. The offering is for the faithful, that sooner or later, they're going to get some return on that invested capital. The price could go up because they'll control the supply of stock that they issued, but in the long term, it's a weighing machine and losing that amount of money on that investment until they turn the corner, which is many years out, you'll have better places to buy it than at the initial public offering."

"If people are raising cash for the Anthropic IPO with funds from the current hyperscalers in Mag Seven, that could be a headwind in coming weeks. It will be dependent on what we see in earnings from Microsoft, Alphabet, and Amazon this week."

BRIAN MULBERRY, CHIEF MARKET STRATEGIST, ZACKS INVESTMENT MANAGEMENT, COLORADO    "It'll be very interesting because Meta has come out and said we're going to raise another $95 billion in an equity offering as well, so you're going to have really a saturated market. There's a lot of liquidity that needs to get scooped up by these two offerings at the same time. I think it could be a detrimental to some of these smaller and maybe even lower quality AI names that are out there."

LUKAS MUEHLBAUER, ASSOCIATE AT IPOX SCHUSTER, EDINBURGH

"Anthropic’s IPO will certainly establish a benchmark for valuing leading AI labs, influencing both upcoming listings and confidence in the companies funding the AI infrastructure buildout."

"Its success would not necessarily benefit every AI business equally, as investors will still distinguish between proven customer demand and spending based on anticipated growth."

ANDRE BAKHOS, MANAGING MEMBER, INGENIUM ANALYTICS LLC IN PLAINSBORO, NEW JERSEY

"It speaks a lot that the AI trade is alive and well. That the penetration of AI will continue. It also bolsters the psychology looking at the other participants in this space."

"It's a race for capital and it's telling that there is growth. But also there are going to be questions coming in regarding valuations, regarding how long can this go for."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH IN FAIRFIELD, CONNECTICUT

"It's a challenging environment, to say the least, exactly when this IPO will take place. There's a lot riding on not only the company, but the AI industry."

"If it goes well, that could help return investors confidence to the AI industry. But it's going to be challenging."

"Maybe the environment changes after the (US midterm) elections next week. You're going to have to make major promises that I don't know if they can be fulfilled anytime soon."

MATT KENNEDY, SENIOR STRATEGIST AT RENAISSANCE CAPITAL

"Investors weren't questioning valuations the same way a few months ago. With some of the hottest AI IPOs of the summer trading below their offer price, not even Anthropic will get a blank check."

"Maybe they could have gotten a higher valuation next year, but they've decided to 'rip the band-aid off'." 

"For Anthropic, being publicly traded is also of strategic interest: This is a PBC (Public Benefit Corporation), and being publicly traded provides a greater level of public transparency."

(Reporting by Niket Nishant, Tharuniyaa Lakshmi, Purvi Agarwal, Johann Cherian, Arasu Kannagi Basil, Darshan Kumar, Anand Gopal, Pritam Biswas in Bengaluru; Compiled by Medha Singh; Editing by Devika Syamnath)