An Anthropic IPO Could be Here Sooner Than We Thought!
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Anthropic beats OpenAI to this one major milestone. This is Motley Fool Money.
Tyler Crowe Welcome to Motley Fool Money! My name is Tyler Crowe. Today, I'm joined by longtime Fool contributors Matt Frankel and John Quast. Today, we're going to cover our typical smattering of topics. We're going to go looking at the buy now, pay later space because of some recent news from Klarna. We're going to do our typical Thursday stocks on our radar. But first, we're going to start with news coming out of Anthropic. OpenAI's chief competitor, Anthropic, has recently hired lawyers and has been in contact with investment bankers about an IPO that could occur as soon as 2026. It could end up being the largest IPO ever or at least in the top five. Now, there's been a lot of hype for AI-related IPOs this past year in 2025.
We've seen companies like CoreWeave go for almost $100 billion, or at least what they were looking for. We've seen companies like Fermi, a lot of pre-revenue companies in the AI kind of picks and shovel space going for massive valuations, even though they really haven't done anything yet other than put a plan on paper, and we're getting these very ambitious valuations. Matt, I have to assume that with this IPO Anthropic's looking at, they're looking for a big payout here, right?
Yeah, I love the word you used, ambitious valuations. Anthropic is having success getting money in the private markets. In my opinion, they would be wanting to step it up a bit. Right now, they're valued at about $350 billion, reportedly. in an ongoing funding round to which Microsoft and Nvidia have already committed $15 billion. It's not like they can't raise money privately. This is up from $183 billion valuations, almost double, in a September funding round. It really shows you the magnitude of hype surrounding these big AI players. It's not as if Anthropic is a pre-revenue business. It's making money. It expects to end this year with $9 billion in annual recurring revenue. Management's projecting that to rise to over $20 billion next year.
They have a pretty ambitious target of $70 billion for 2028. But it all depends, really, on the rapid growth in AI spending. My real thought is, if the IPO market and the AI market are doing what they're doing now, then 2026 is a good target, even toward the first half. If the market cools, this could be delayed significantly. It's going to depend on what they think they can get out of the market. But as it stands now, it's not surprising to see a sense of urgency develop.
I want to point out that the CEO of Anthropic recently said some AI giants are taking reckless hundreds of billions, spending risks on data centers and chips. He didn't name names, but I think that we're all knowing who he's talking about, his former employer, OpenAI. These companies are spending a ton of money. To Matt's point, yes, they're making revenue, they're generating revenue, but they do need money because they are burning cash. Now, Deutsche Bank has done some research and done some projections. Anthropic is expected to burn cash over the next, let's say, two, three years. But it's somewhat modest. I think that they'll be able to raise what they need. On the other hand, OpenAI is projected to burn at least $140 billion cumulatively through 2029.
I don't even know if my brain can comprehend that number. These companies are looking for funds so that they can execute on their business ambitions. They're already valued at over $300 billion and over $500 billion for OpenAI. These are some of the largest private valuations in history. It's only a matter of time before they go to the public markets looking for money.
I'm trying to start to think. Eventually, you see these massive numbers being put up in the private valuation space. granted the private markets in whether it be venture capital whether it be uh you know kind of insurance companies we're seeing companies like brookfield asset management or these kind of alternative asset managers that are have a lot more money sloshing around to make investments like this eventually the private markets are going to tap out with the amount of money they can give to it so the public market almost seems inevitable for these companies and to your point
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