(June 2): Anthropic PBC pulled ahead of OpenAI with its confidential initial public offering (IPO) filing on Monday, as the free-spending artificial intelligence (AI) start-ups battle for a fundraising edge that’s set to determine who will win the ultimate battle for computing power.
The oneupmanship in the firms’ private funding rounds, and now their progress towards going public, isn’t just about bragging rights. The risk for both firms is that the first to tap the US market’s unparalleled depth and liquidity will gain an immediate advantage in securing access to the chips, data centres and talent needed to build their AI models.
With Elon Musk looking to turbocharge SpaceX’s nascent AI offerings by strapping them to a hyperscaler with a chipmaker joint venture and doing an IPO, OpenAI and Anthropic can’t risk falling behind. Being first to market — and the first to show their cards — comes with a potential downside, too, though.
“The bankers are telling them that the time is right,” according to Matthew Kennedy, a senior IPO market strategist at Renaissance Capital, citing the double-digit gains this year for the S&P 500 Index and the Nasdaq 100 Index. The advantage of listing first may diminish once both firms are public, he cautioned.
“Whoever goes first will be able to set the tone, and whoever goes second could look like an also-ran and be ultimately forced to compare itself with the other one in the marketing discussions,” Kennedy said in an interview.
Anthropic’s move to file confidentially for an initial public offering adds to the sense that its momentum is increasing. The maker of the Claude chatbot leaped to a US$965 billion ($1.23 trillion) valuation in its latest private funding round — above OpenAI’s for the first time — as its revenue surged. The company also signed a surprise pact with SpaceX for AI compute that could total nearly US$45 billion by May 2029, if neither party cancels it first.
See also: Alphabet to raise US$80 bil for AI via equity offerings, including Berkshire deal
“Anthropic’s latest funding round values it more than US$100 billion above OpenAI, chiefly reflecting its edge in frontier models, while recent pacts with SpaceX, Amazon.com’s AWS and CoreWeave have helped narrow the compute gap,” Bloomberg Intelligence analysts Mandeep Singh and Robert Biggar wrote in May.
“We believe its hypergrowth in annual recurring revenue to around US$47 billion, about five times compared with December, points to Anthropic’s model lead over large-language-model rivals in areas such as coding agents,” they wrote.
By going public, Anthropic and OpenAI would gain access to a much wider range of buyers, including millions of individual private pension investors. A listing also provides capital and lets companies use their stock for acquisitions and to reward employees with shares they can more easily sell.
See also: Interactive Brokers offers use of Claude AI to investors
Some are warning that the enthusiasm for AI themes can’t continue, and that time is of the essence for the two IPO candidates. The Philadelphia Stock Exchange Semiconductor Index is up 83% this year.
The two companies face similar questions about their enormous capital expenditures and what their profit margins are going to be, said Jay Ritter, a director of the IPO Initiative at the University of Florida.
“SpaceX is a unique business but OpenAI and Anthropic are much more similar and it would be surprising if one was to trade at a significantly higher price-to-sales ratio than the other,” Ritter said in an interview.
Even with Anthropic taking the lead, OpenAI isn’t far behind. The ChatGPT firm is preparing to file for an IPO in the coming weeks and is working with Goldman Sachs Group Inc and Morgan Stanley to submit a confidential IPO filing ahead of a potential listing in the fall, Bloomberg News has reported.
OpenAI chief executive officer Sam Altman has played down the timing of its first-time share sale.
“I think there is a race to deliver the best technology and build the best business, but, you know, going public is a financing event, and I don’t think that’s one that we are focused on the timing of,” Altman told CNBC in an interview on Monday.
With both companies’ private valuations nearing the US$1 trillion mark, investors will likely be applying similar scrutiny to Anthropic and OpenAI’s public IPO filings when they come. Should the first to make it out of the gate prove to be a flop, coming second could be an opportunity to recalibrate the pitch to what public investors are really looking for.
“For OpenAI, the conventional read is that Anthropic just seized the narrative advantage by filing first,” PitchBook senior late-stage company research analyst Harrison Rolfes wrote in emailed comments. “The unconventional read is that OpenAI got the better end of this: Anthropic just volunteered to absorb all the disclosure risk first, and OpenAI now has a free option to watch how institutional investors react to audited frontier AI financials before committing to its own price.”
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