Anthropic's anticipated November initial public offering may carry a $1.5 trillion valuation—roughly $500 billion lower than the $2 trillion target previously discussed by investors—following a slowdown in quarter-over-quarter revenue growth.
Slower Growth and Falling Model Prices Weigh on Valuation
At an investor day in San Francisco on Wednesday, Anthropic revealed it was profitable on an adjusted basis during the third quarter while generating $16.8 billion in revenue. Although this marks a 45% sequential increase, it represents a notable deceleration from Q2, when revenue more than doubled to $11.6 billion. The growth moderation stems partly from major enterprise customers like Meta and Microsoft leaning more heavily on their own in-house AI models. In addition, Anthropic reduced its focus on distillation services, an offering that previously accounted for 5% to 7% of overall revenue.
Pricing pressure across the artificial intelligence sector is also accelerating. Anthropic priced its Claude Haiku 5.5 model approximately 75% below its predecessor this month as low-cost Chinese laboratories increase market competition.
- Valuation Cut: Investors discussed a $1.5 trillion valuation for Anthropic's November listing, down from $2 trillion.
- Q3 Revenue: Revenue reached $16.8 billion (up 45%), slowing from Q2's $11.6 billion figure which had more than doubled.
- Pricing Cuts: Claude Haiku 5.5 was released at a 75% discount to its predecessor amid competitive pressure.
- Tech Sell-Off: Top 20 AI and chip equities lost over $1 trillion in market capitalization this week.
Broad AI Market Pressure and Industry Warnings
At $1.5 trillion, Anthropic would sit below the $1.77 trillion valuation that SpaceX achieved during its June listing. Independent research firm New Constructs—which flagged WeWork in 2019—offered a far lower valuation estimate of $150 billion earlier this month, stating, "We don't think Anthropic has a viable business."
Systemic concerns regarding the broader AI sector have mounted among prominent investors. In August, Steve Eisman stated that Anthropic and OpenAI represent roughly 70% of AI-related revenues at Microsoft, Amazon, Google, and Oracle, calling the reliance the "Achilles' heel of the AI boom." Investor Michael Burry recently warned that an AI bubble could burst earlier than his initial 2028 timeline, while former BitMEX CEO Arthur Hayes predicted that the AI data center expansion will ultimately end in a crash requiring an eventual multi-trillion-dollar AI bailout.
This valuation update arrives during a difficult week for technology equities. CNBC reported that the 20 most valuable AI and semiconductor firms lost over $1 trillion in value. Dell fell 11% on Wednesday before sliding another 6.8% on Thursday, while CoreWeave dropped about 15% on Wednesday. With OpenAI not expected to list until early 2027, Anthropic's November listing is set to establish the pricing benchmark for the industry.
Why It Matters
As the first primary foundational AI lab to go public, Anthropic's final valuation will establish the benchmark valuation multiple for the entire AI industry ahead of OpenAI's expected 2027 listing. The combination of decelerating quarter-over-quarter revenue growth, deep pricing cuts driven by Chinese rivals, and major clients shifting to internal models demonstrates growing margin compression at the application and model layers. If public markets demand lower multiples for AI developers, infrastructure spending could slow down, creating ripple effects across broad technology stocks and speculative capital markets.
