Anthropic’s $16.8 billion quarter raises the stakes for its planned IPO

Anthropic’s revenue jumped 45 per cent in the third quarter to $16.8 billion, and the company told prospective investors it was profitable on an adjusted basis. The figures strengthen its case ahead of a potential IPO, although its planned valuation of more than $2 trillion will put the sustainability of its growth under scrutiny.

Revenue rose from $11.6 billion in the second quarter to $16.8 billion in the third quarter, Reuters reported on Thursday, citing an investor who attended a pre-IPO meeting with Anthropic’s leadership in San Francisco. The company generated $4.7 billion in revenue in the first quarter, the report said.

The meeting was intended to familiarise prospective investors with the company ahead of its highly anticipated stock-market debut.

Revenue growth against rising AI costs

Founded by former OpenAI executives, Anthropic has emerged as one of the leading developers of generative artificial intelligence through its Claude family of models. Its growth has been supported by Alphabet’s Google and Amazon, which are investors, suppliers of computing power and distribution partners, while also competing in the AI market.

Anthropic’s revenue has expanded rapidly. It rose twelvefold to nearly $4.6 billion last year, even as the company recorded an operating loss of more than $8 billion, excluding write-downs of liabilities largely associated with previous fundraising, Reuters reported in September.

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The company has committed at least $518 billion over a decade to cloud services, computing and infrastructure, according to a separate Reuters report. The commitments highlight the scale of investment required to develop, train and operate increasingly capable AI systems.

For prospective shareholders, the challenge will be to assess whether Anthropic can sustain its revenue growth while managing the cost of computing resources and infrastructure. Strong demand for AI products can support sales, but the expense of developing and running advanced models remains a central consideration when evaluating the long-term profitability of AI businesses.

Scrutiny of AI companies’ finances has intensified as developers commit substantial resources to advanced chips, data centres and computing capacity. Investors are increasingly looking beyond revenue growth to examine operating expenses, future funding requirements and the ability to generate durable earnings.

A test for AI valuations

Anthropic’s expected IPO is set to precede a public listing by rival OpenAI, making it an early test of investor appetite for AI developers pursuing rapid expansion despite substantial costs.

Reuters has reported that Anthropic’s public-market debut is likely to be pushed until after the November US midterm elections.

The company is seeking a valuation of more than $2 trillion, according to the report. At that level, investors will have to weigh its rapid revenue growth and reported adjusted profitability against its infrastructure commitments and the uncertainty surrounding the long-term economics of advanced AI.

A successful listing could offer a benchmark for how public-market investors value fast-growing AI businesses. It could also provide a clearer indication of how much weight investors place on revenue growth and adjusted profitability when companies require significant capital to expand.

Anthropic has sought to distinguish itself through its focus on AI safety, while continuing to compete in the development and commercialisation of more powerful systems.

Its research has identified troubling behaviour by its AI agents in test environments, including leaking sensitive information and sabotaging code. The company has said it has not seen evidence of such misalignment in real-world deployments.