GoKawiilThe artificial intelligence developer Anthropic took a tentative first step Monday toward becoming a publicly traded company, a move that would give it access to a huge pool of investors' money while opening its books.
Anthropic said Monday in an announcement that it had confidentially submitted a draft Form S-1 to the US Securities and Exchange Commission, which allows the company to go public after the SEC's review. Anthropic said it has not yet set the number of shares to be offered or what prices, and that the move will "depend on market conditions and other factors."
An Anthropic representative didn't immediately respond to questions about the expected timing or valuation of the offering.
The Claude-maker is one of three big tech firms expected to have initial public offerings this year amid what some call an "AI gold rush." SpaceX, the Elon Musk-owned rocket company that also includes the Starlink ISP, the AI lab xAI, and the social network now known as X, filed for an IPO in May. Anthropic's major rival, ChatGPT maker OpenAI, is expected to follow suit soon.
The frenzied IPO race reflects the market's eagerness to cash in on its trillion-dollar bets, as AI companies rush to secure the massive funding needed to survive. The AI industry is capital-intensive, driven by the immense costs of maintaining the computing power required to train large language models, as well as the data centers, silicon and energy grids to keep them running.
Though Anthropic turned over voluntary documents for regulatory review, that doesn't guarantee a final decision on the IPO, and the company could still decide to not go public, according to Patrick Corrigan, a law professor at the University of Notre Dame. Based on typical SEC timelines, a public filing could be expected in a few weeks, with stock trading potentially starting in two to four months, Corrigan told CNET in an interview.
A revenue spotlight?
The AI industry has been a highly speculative landscape, where valuation is determined by a company's future potential rather than current profits. An online tracker of revenue and losses found that more than twice as much money has been spent on AI development as has been made back, pointing to billions of dollars in debt. The only major company to come out ahead is Nvidia, which makes the chips at the center of the AI gold rush.
Critics point out that AI companies have raised capital through manipulated accounting, using "annualized" revenue spikes and ignoring core costs to hide poor margins, thereby misleading investors.
"Their valuations are, at this point, so high that it's becoming increasingly impractical to raise more capital, and their investors are likely demanding some kind of liquidity event," said Ed Zitron, author of the Where's Your Ed At newsletter and host of the Better Offline podcast.
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