Anthropic IPO to test Wall Street’s faith in AI as skepticism mounts

There were no rockets decking Wall Street bank lobbies this past week, unlike the spectacle surrounding SpaceX’s blockbuster June listing.

Instead, bankers marketing Anthropic’s (ANTH.PVT) potentially record-breaking initial public offering this week faced an unusually turbulent backdrop as Treasury yields surged and a widespread Microsoft Outlook outage hampered communications, all during — the biggest disruption of all — the sudden ousting of Nvidia (NVDA) CEO Jensen Huang, whose company is among Anthropic’s biggest investors and chip suppliers.

At a JPMorgan Chase investor event Friday, Anthropic CEO Dario Amodei outlined a future in which AI could help make diseases such as cancer and Alzheimer’s relics of the past, while devising entirely new markets in scientific research, robotics, and cybersecurity.

“We can have a much more beautiful world … It sounds starry-eyed. It sounds crazy. I really do believe it,” Amodei told JPMorgan CEO Jamie Dimon.

Yet Amodei struck a more restrained tone about the company’s move to go public, saying he hopes the company will “underpromise and overdeliver.”

“We’re not super fussed on when exactly, what month or what day or what market conditions we go public into,” he added.

The comments come as Anthropic seeks a valuation of approximately $1.3 trillion to $1.4 trillion, below the $1.5 trillion to $2 trillion figures investors had contemplated just weeks earlier.

The offering, expected to begin trading on Thursday, Nov. 19, could provide one of the clearest tests yet of investors’ appetite for AI at a moment when enthusiasm for the broader trade is showing signs of cracks.

The contrast between Anthropic’s lofty ambitions and Amodei’s measured approach to the IPO has also been apparent in Wall Street’s marketing campaign.

The lobbies of JPMorgan, Morgan Stanley, and Goldman Sachs have been decorated to welcome the startup, according to people familiar with the arrangements. But the displays are more subdued than the digital displays and skyscraper illuminations of rocket ships Wall Street bank visitors witnessed during SpaceX’s June IPO, or the meteorite exhibit at JPMorgan’s Manhattan headquarters.

Banks are nevertheless mounting a substantial effort to attract investors.

At Goldman Sachs and Morgan Stanley, the two banks leading the offering, Anthropic executives met with institutional investors earlier this week. Goldman is also planning an event next week for wealth management clients, where the bank’s president, John Waldron, is expected to interview Anthropic president Daniela Amodei and CFO Krishna Rao, according to a people familiar with the plans.

The difference in presentation also arrives as investors appear far more discerning about the extraordinary valuations and spending commitments of AI companies.

Thomas Raymond, a founding partner of Callan Family Office, said his firm is seeking an allocation in Anthropic’s IPO through Charles Schwab, arguing that the offering is more attractive than SpaceX’s blockbuster listing “simply because of the valuation.”

Still, Raymond acknowledged that investor enthusiasm has changed since June, and he wouldn’t attempt to purchase shares on the open market.

“There’s no escaping the fact that the halo isn’t as formidable for all things AI now as compared to three or four months ago,” he said.

The more restrained marketing campaign may reflect that shift in sentiment, according to Reena Aggarwal, a Georgetown University finance professor who attended JPMorgan’s SpaceX investor event.

“Based on what’s happened in the markets, it makes sense not to overdo this,” Aggarwal said of Anthropic’s IPO.

“You don’t want to do a huge amount of fanfare, and, you know, if the stock comes out and crashes, that would look very bad for the company and the bankers,” she added.

Even with less spectacle, Anthropic’s IPO could deliver one of the largest underwriting paydays in Wall Street history.

Evercore ISI analysts estimate Anthropic’s IPO will generate approximately $395 million in underwriting fees, compared with the roughly $500 million fee pool from SpaceX’s June listing.

Goldman Sachs (GS) and Morgan Stanley (MS) could each collect approximately $79 million, while JPMorgan, along with Citigroup (C), stand to earn roughly $44 million, according to Evercore’s projections.

The fees could climb if the offering size increases beyond what Anthropic has estimated. Banks also could reap additional revenue from the trading, securities lending, and wealth management activity that typically follows a blockbuster listing, Evercore added.

Follow David Hollerith on X @DsHollers.