This has been a landmark year for IPOs, and attention now sits on Anthropic and OpenAI. Anthropic looks set to go public first, likely before election day. OpenAI's CFO said it will be a public company in 2027, though some comments hinted it could come sooner.
The SpaceX comparison
The clearest comparison is SpaceX (SPCX), which is trading well. It priced at $135, opened at $150, and trades around $155. Given the size of that deal, that counts as a success, and it cleared the path for Anthropic to follow.
Anthropic's valuation and demand
Anthropic is bigger. Private market investors who own it point to a valuation near $2 trillion, a little above $1.7 trillion. For scale, US GDP is $32 trillion. A couple of weeks ago the company said its total addressable market is $30 trillion. Those numbers are unheard of.
Anthropic trades very little in private markets because the company wants it that way. If you try to sell your shares to a buyer Anthropic does not approve, Anthropic may cancel your shares and make them worthless. Because of this, large amounts of institutional money want in and cannot get in, so they must wait for the IPO. That pent-up demand could drive strong buying during the IPO.
One investor hunting for Anthropic shares said that, depending on the math, the deal could be four times oversubscribed versus SpaceX, running to 6x or even 8x. This is speculative since the S-1 has not been filed yet. Anyone with a chance to buy shares will take them because they are so hard to find. I am more bullish on Anthropic than I was on SpaceX.
AI demand is real
The Anthropic IPO should not be read as a test of whether AI demand exists. Pricing at $2 trillion or above shows the demand is clearly there, across Anthropic, OpenAI, and open source. Over $145 billion has flowed into the IPO markets this year. Over $250 billion has gone into the hyperscalers, Meta (META) and Oracle (ORCL). The main buyers in the backlog of those hyperscalers are OpenAI and Anthropic. So investors are already putting money into AI infrastructure that supports these companies, betting the demand continues.
The debt market and circular financing
Anthropic is seeking an investment grade debt rating despite weak metrics like negative operating cash flow. From experience in debt capital markets, this is not the kind of company that would earn an investment grade rating. It would not even get junk. Talking about these companies tapping the debt markets before turning a profit by any metric is remarkable.
When hyperscalers finance deals to help OpenAI and Anthropic, the arrangement looks cozy and possibly concerning. Some call it circular. What it signals is a huge need for cash. These companies are looking everywhere: IPOs, the debt markets, and direct funding. They are getting as much as they can from Google (GOOGL) and Amazon (AMZN), and that is working. The debt market path is yet to be seen, but the IPO looks strong.
Why hyperscalers keep spending
Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT) provide the infrastructure for both companies. The capital they have raised is huge. When pricing an Anthropic IPO, investors are judging the persistent demand for AI and whether they can underwrite it, which ties into Anthropic's creditworthiness. The hyperscalers see demand so strong in the markets that they are willing to underwrite this capex spend, for Anthropic and for their own internal AI use, including open source. Those demand signals are what some people are missing.
Both IPOs look set to be heavily oversubscribed, with plenty of demand on the way.
