Anthropic’s record IPO faces some big questions

In five years, Anthropic has become an AI giant valued at US$1 trillion (S$1.3 trillion).

SAN FRANCISCO – No start-up has ever grown so fast. In five years, Anthropic has become an artificial-intelligence giant valued at US$1 trillion (S$1.3 trillion), and it is now aiming for a record-breaking stock market debut.

But it faces three threats: rivals that are catching up, prices that are collapsing and bills that keep climbing.

Anthropic spells out the risks in its Wall Street prospectus, published on Oct 26.

The first is commoditisation. “The degree of differentiation among advanced AI models may narrow,” the company warns.

The San Francisco-based firm also says “substantially all of our revenue” comes from its AI tools.

Unlike Google or Meta, it has no advertising empire to fall back on if business takes a hit, and no cloud business like Microsoft’s or SpaceX’s.

Investors have already grown nervous. In mid-August, shareholders were floating a valuation of US$2 trillion.

But quarter-on-quarter growth slowed from 145% in the second quarter to 45% in the third, cooling expectations to around US$1.5 trillion.

So-called open AI models, which anyone can download and modify, are close behind closed models such as Claude or ChatGPT, which are available only through their owners’ paid services.

The performance of open models trails by only about four months on average, according to research institute Epoch AI.

They include Kimi K3.1 Pro from Chinese company Moonshot, which costs half as much as Claude Opus 5.5, Anthropic’s current flagship.