#AnthropicSecondaryValuationHits1.2Trillion

Anthropic’s eye-popping valuation reveals just how important the AI story has become. On the other side, you have this story every few months that tells institutional investors where they’re putting money, and once again, AI has managed to become a massive talking point. Anthropic’s reportedly valued at $1.2 trillion on the secondary market is huge, and what makes it more impressive is the fact that the demand is so high that most of current shareholders want to sit this round out.

As I look at valuation ballooning like this, I don’t automatically assume bubble, I ask if investors are confident that this will be the “foundational layer” of the next technological wave?

AI isn’t a siloed technology, it’s the underlying layer for almost everything -- from enterprise services, to health care to financial services, to robotics, and much, much more. That said, valuation and excitement are different. The more you hope that a business can achieve in the future, the harder that will be to achieve in the future. History teaches us that the best businesses do have corrections if expectations outpace execution.

I do think it's important to separate conviction about the AI space versus how much I want to pay for it.

I think one of the other very interesting points is the scarcity of shares in the company, which would mean demand is even stronger than initially expected in addition to the strong appetite to buy shares. In this case I think more than what’s happening with the specific company is what’s really important and that capital continues to flood into the space (either to the chip makers or the cloud or data center companies, etc.) This company would also likely see an IPO in the not-so-distant future and I will be monitoring it closely.

In your opinion, is it still possible to justify this valuation going forward?

or the market has just gone too far too soon?

‍#AI #GateSquare