Anthropic is discussing launching its IPO as early as the fourth quarter of this year.

Anthropic CEO Dario Amodei

According to informed sources, executives at the artificial intelligence company Anthropic have discussed plans for an initial public offering (IPO) as early as the fourth quarter of this year.

Some insiders say that bankers competing for underwriting rights for the listing expect Anthropic to raise over $60 billion in the IPO. This is expected to become the second largest IPO globally, following SpaceX, which is anticipated to go public as early as this summer with a fundraising target of $75 billion. The final fundraising amount will only be determined just before the listing.

Companies typically issue 10% to 25% of their total equity in an IPO, so bankers generally estimate the fundraising amount by considering the company’s projected valuation at the time of listing, investor demand, and other factors comprehensively.

Although Anthropic is discussing a more specific timeline for the listing, related plans may change at any time and can be influenced by macroeconomic events. Insiders indicate that the company was valued at $350 billion during a financing round last month, and it may ultimately completely abandon its IPO plans. However, the company is taking substantial steps toward going public, such as partnering with the law firm Wilson Sonsini.

Its main competitor, OpenAI, is also accelerating preparations to go public soon. According to insiders, OpenAI CEO Sam Altman has privately expressed hope that the ChatGPT developer can complete its IPO ahead of Anthropic. Other insiders state that OpenAI is set to close a $120 billion financing round at a valuation of $730 billion, so there is currently no urgent financial pressure to go public.

Both OpenAI and Anthropic going public would be a landmark event amid the AI boom. Previously, this boom has led to significant stock price increases for cloud service providers and chip giants that serve the two companies and other core AI developers. Anthropic’s revenue has grown rapidly this year, with its automated programming tool business doubling its annualized revenue to $19 billion in the first two months of this year, narrowing the revenue gap with OpenAI.

In contrast, OpenAI’s subscription revenue from ChatGPT last month surpassed an annualized revenue of $25 billion. Anthropic predicted in December that the company could achieve positive cash flow as early as 2028; OpenAI, on the other hand, estimated at the beginning of this quarter that it would reach positive free cash flow by 2030, although it previously projected that its cash burn would exceed $200 billion before 2030.

In comparison, Anthropic had previously predicted optimistically that its cash burn would be about $22 billion before achieving positive free cash flow.

Bankers and lawyers involved in the IPO project generally expect Anthropic to go public before OpenAI. They believe that secondary market investors prefer Anthropic’s business model aimed at developers and enterprise clients, rather than OpenAI’s consumer-focused approach, and that the expected timeline for Anthropic to achieve profitability is also shorter.

IPO advisors state that when Anthropic and OpenAI discuss potential listing matters with regulators, the differing accounting methods for cloud service providers reselling their AI model-related revenues will almost certainly become a focal point of discussion; both companies’ projections for unprecedented revenue growth and server cost expenditure models will also be closely monitored.

The timing of the listings for both companies largely depends on the overall market environment. Concerns over intensified inflation and declining consumer spending due to the Iran conflict and rising oil prices could affect the IPO market’s activity and will influence the ultimate timing of the two AI companies’ listings. The Financial Times previously reported that Anthropic is expected to complete its listing this year.

According to informed sources, OpenAI has had informal discussions with Goldman Sachs and Morgan Stanley. Goldman Sachs provided advisory services for OpenAI’s restructuring last fall in conjunction with senior banker Michael Klein.

Both companies are vying for premium corporate clients from private equity firms. Insiders say that Anthropic is negotiating with private equity firms, including Blackstone, Hellman & Friedman, and General Atlantic, to form joint ventures; OpenAI has also discussed similar joint venture plans with firms like TPG, Andreessen Horowitz, Bain Capital, and Brookfield Asset Management.