Anthropic's IPO: Get Set for It to Light Up an Already-Scorching AI Industry
While AI stocks have hit a small speedbump to end 2025, a potential AI IPO could heat things right up again.
Anthropic – the company behind the Claude AI chatbot – is exploring an IPO, according to the Financial Times. And the move should turbocharge investment in the sector.
While Anthropic's Claude may be less familiar to casual users, it's well-regarded by businesses. Beating its rival OpenAI to the public markets could help Anthropic compete... and accelerate the already-breakneck speed of AI development.
Plus, an IPO of any one of these AI startups allows investors to buy directly into the AI story... instead of through "picks and shovels" plays such as Nvidia or less directly via Microsoft and Alphabet.
So investors could get "pure play" exposure to an AI company if Anthropic goes public.
Let's look at why Anthropic is investigating an IPO, what it stands to gain, and what this move says about its standing in the AI sector.
How much would an Anthropic IPO be valued at?
While Anthropic's exploration is in early stages, it has already begun discussing the possibility of an IPO with its legal counsel. This law firm has a history of helping tech IPOs get to market (Google, LinkedIn, and Lyft, among others).
The AI company has also begun talking with investment banks.
An Anthropic IPO has the potential to be one of the largest-ever... both in terms of cash raised as well as total market cap. And if the recent surge in private valuations is any sign, demand for shares in an Anthropic IPO (or an OpenAI IPO, for that matter) would be fierce.
Anthropic's valuation has had a heady run in the last year or so. The company has raised multiple rounds of funding:
- November 2024: Raised $4 billion at a $40 billion valuation
- March 2025: Raised $3.5 billion at a $61.5 billion valuation
- September 2025: Raised $13 billion at a $183 billion valuation
Investors love to see a rising valuation. It's a telltale sign of continued interest.
But "continued interest" puts it much too mildly for a valuation that effectively tripled over a six-month period. This is a level of white-hot passion you don't see often. Many of the best-placed investors in the world want in on Anthropic's story.
This startup – though it's hard to call such a highly valued company a startup, even if it was founded only in 2020 – is also considering raising more funding, outside of a potential IPO.
According to the Financial Times, Anthropic may raise more cash at a $300 billion valuation in private funding. Microsoft and Nvidia may put up $15 billion combined as part of that round.
While Anthropic has investors' eyes today, OpenAI is still winning for now. It has seen galloping valuations over a similar period:
- October 2024: Valued at $157 billion
- March 2025: Valued at $300 billion
- October 2025: Valued at $500 billion
Unquestionably, investors are interested in these companies, with Anthropic tapping the funding spigot every six months or so recently.
But why are these companies raising so much money?
There's a good reason for that: Like other AI companies, Anthropic is burning through cash. The question that raises is whether the spending will pay off in growth.
Anthropic's valuation: How fast is Anthropic growing?
Now, details on how much cash AI startups such as Anthropic are burning is high level. But we know Anthropic is spending plenty right now, as the company invests to grow.
Anthropic is on pace to burn a net $2.8 billion through 2025. Its rival, OpenAI, projects even more cash burn than Anthropic in the year ahead, at an estimated $14 billion.
Anthropic expects to grow enough in the next few years to break even on its spending by 2028 – well before OpenAI's breakeven target date of 2030. But achieving that goal will take mammoth results from Anthropic.
We can see this in Anthropic's projected annual run-rate revenue ("ARR"). ARR became popular with startups and young software-as-a-service companies. While ARR numbers aren't always reliable, they're meant to help represent repeat sources of revenue for new companies, using things like usage, software subscriptions, contracts, and more.
Anthropic's projections for sales growth are utterly jaw-dropping:
- 2025: $10 billion in ARR
- 2026: $20 to $26 billion in ARR
- 2028: Up to $70 billion in ARR
This kind of rapid sales growth would help the company raise funds at increasing valuations. And this growth over time helps tame what looks like today's high valuation multiple...
If Anthropic achieves its expected $300 billion valuation at its next funding, it would trade at 30 times ARR sales. That's high, but also common for AI companies today.
For such a high-growth company, forward sales – which looks at future revenues – would be a better indicator, though. That would put today's price at around 12 to 15 times forward ARR... again, still on the high end of valuations.
But an IPO would likely price the company even higher. And the market debut could send the price soaring from what would be already-dizzying heights.
Of course, if Anthropic makes an IPO, it'll need to show all its cards face up eventually. So investors will get a full look at the financials before they put up their money.
When is Anthropic going public?
An exact timeline of Anthropic's IPO is too early to say. The company has to balance a couple of competing factors, since it wants the best possible outcome.
First, it wants to go public while optimism is still high. Investors motivated by "animal spirits" are likely to pay a high price for the stock. That should the company raise more money. And even the extra brand recognition from a successful IPO splash can be valuable.
Second, though, to help keep demand for an IPO strong, Anthropic needs to be able to show a clear path to profitability. For now, that path to profitability is based on extremely high sales growth – remember, Anthropic is talking about growing sales around 7 times in just three years.
So, Anthropic might decide to wait for an IPO further down the road, hoping that the market remains receptive to AI stocks later on... Or, it might decide that its story is strong enough now that it can tap into the IPO market.
But remember, Anthropic already has a funding plan for $15 billion in place for the near term, thanks to the recent commitments from Microsoft and Nvidia. Given that, we may see an Anthropic IPO happen later into 2026 rather than earlier.
Unfortunately, the Anthropic IPO has one downside. Most investors won't be able to participate in it... at least not any time before the IPO goes public. That phase of investment is reserved for high-net-worth individuals and institutions.
But the stock would still become available on the public markets after that, likely with a good deal of upside remaining.
And as shown by the rallies in Microsoft, Nvidia, and Alphabet – and dozens of smaller companies – investors have all kinds of ways to play the AI boom.
That's why a former hedge fund manager known for spotting early winners is sounding the alarm today...
He called Netflix at $7.78 (up 4,200% since), Apple at $0.35 (up 20,000%), and Amazon at a split-adjust $2.41 (up 3,200%).
Now, this renowned investor just released a new list of his favorite AI stocks... and not a single Magnificent 7 name made the cut.
Instead, an AI stock you've likely never heard of just flagged as "near-perfect" in his new investing scoring system.
Good investing,
James Royal
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