A trillion here, a trillion there; pretty soon you're talking real money
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Key Capital Private, Investment Note #42
A trillion here, a trillion there; pretty soon you're talking real money
Anthropic is reportedly targeting an initial public offering in late November this year. Details are still light, but per the New York Times, they are looking to raise $100bn at a $2trn valuation. A pretty stunning feat for a five-year-old company that has yet to turn a profit. But, given Anthropic’s growth over the past few years, that valuation may not be as outlandish as it initially appears.
Its proposed IPO ties together a couple of areas of interest worth exploring - what is the case for buying into such a large, immature company, and what this says about public equity markets today.
The AI Labs
Whatever anyone thinks about the valuation supporting Anthropic’s IPO or the long-term sustainability of the business, one thing is clear. This is a mind-boggling moment for equity markets: two trillion dollars of value have been created since the company was founded just five years ago in 2021. Their Series A raise was at a $550m valuation; from that to a $2trn IPO in five years is a 3,636x increase. Even for latecomers, the increases are astronomical – our in-house private equity fund’s first exposure to Anthropic came through the 2023 Series C raise done at a $5.1bn valuation. That would equate to a comparably miserly 400x increase at the mooted IPO valuation. Obviously, that’s ignoring dilution, but the point stands.
All of which is to say, as we’ve talked about before, these numbers are staggering, and so it is very much worth looking at the underlying economics to see what is being priced into that $2trn valuation.
Anthropic’s financials are not yet publicly available, at least in full. Many estimates have been released, and some have leaked, so there is still a wide margin for error; but let's set out the rough picture for context and then jump into the investment merits.
Per PitchBook, through July ’26, Anthropic had an annualised revenue run rate of $65bn, up from $9bn at the end of 2025. Total losses for 2025 were $42bn, and the company has capital commitments of over $500bn due over the next decade.
The Bull Case
The bull case is pretty straightforward: follow the growth. At $2trn, the IPO valuation is a 222x multiple of year-end 2025 revenue but only 30x the July run rate. If Anthropic hit its own projections of $190bn to $200bn in 2028, that leaves you with a more reasonable 10x revenue multiple.
Headline losses also look a lot scarier than they are; as mentioned, Anthropic had a $42bn loss in 2025, but $34bn of that loss was a non-cash charge on a convertible note; Investors had lent the company money, the notes grew more valuable as the company did, and the accounting rules mean the increase is booked as a loss. Excluding that, you get an operating loss of about $8bn. Still big, but falling as a share of revenue. Per PitchBook, the company’s compute bill went from about 6x revenue in 2024 to about 1.5x in 2025, meaning that unit economics are improving as the company grows. If Anthropic can continue to deliver at somewhere close to the level they already have been, then the bull case is solid.
The Bear Case
The bear case is similarly succinct: $2trn is a very big number to justify. Even accepting the adjusted loss figure of $8bn last year, that dwarfs the losses reported by other big IPOs of recent memory. SpaceX had a $2.6bn loss, Uber had $3bn, Rivian $1bn, and Airbnb $0.5bn in losses. Despite losses 3x higher than SpaceX's, Anthropic is looking for an even higher valuation at IPO.
The business is structured with high fixed costs; as noted above, Anthropic has capital commitments of over $500bn due over 10 years, of which 80%+ cannot be cancelled, so they will be paying whether they need it or not. Revenue, on the other hand, can very easily be cancelled quite quickly: two customers made up 25% of revenue, and most large customers are not on long-term contracts. This leaves the company hugely exposed to any slowdown in AI spending.
Then there is the odd structure of Anthropic – it was set up as a public benefit company and explicitly founded because they thought OpenAI was too commercial. The proposed post-IPO set-up would give its seven founders 50.1% control via a single share, and then the public benefit trust would elect four of the seven board members. Hard to see many voices in that room being overly concerned with the views of the public shareholders; that’s not necessarily a terrible thing, but it certainly warrants a discount.
Anthropic is clearly an incredible company, growing at a pace and scale markets have genuinely never seen, and yet, the $2trn valuation looks stretched, at least for now. Q3 data showing another large revenue jump would help the bull case, as would better disclosure around the $500bn of commitments; until then, buying into the IPO needs a lot to go right.
What is left for Public Markets
Normally, that is where we'd stop, but given the scale of the figures involved here, it begs the question of how Anthropic got to this point. How do you go from $0 to $2trn in five years without tapping the public equity market, and what does it say about how public markets operate nowadays?
This trend of fewer but larger companies going public has been building for a while, but between SpaceX and now Anthropic, it's now unavoidable. Google raised only about $36m privately before its 2004 IPO; Anthropic has raised about $120bn. By the Bureau of Economic Analysis’ tally, the US had 8,090 listed companies in 1996 and 4,572 in early 2023. Over the same period, per J.P. Morgan, the number of companies backed by private equity rose from 1,900 to 11,200, and fewer than 15% of American companies with revenue above $100m are now listed, according to Schroders.
Academics who study the disappearance of listed companies tend to point to two self-reinforcing trends. Being public grew costlier, burdened by increased regulations and disclosures. Meanwhile, private financing has become cheaper, and the ecosystem has expanded enormously.
What does all this say about the future of public markets? Not much good for the ordinary investor. Instead of a place where companies build and grow, they are becoming a place where companies get priced. More and more, it seems the public are being invited to the table only to find the meal already well underway and no guarantee of further courses to come.
The real growth in companies like Anthropic increasingly happens before the IPO and Key Capital has been allocating to leading global venture managers for over a decade with $90m committed across 15 managers.
Let us know if you are interested in talking through how we are thinking about Anthropic, or about private markets more broadly.
This is a Marketing Communication provided for general information only. It does not constitute investment research, advice or recommendation.
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