Anthropic plans to raise up to $100 billion in IPO, scale may exceed SpaceX record

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The market atmosphere for Anthropic PBC's mega-IPO has warmed slightly: Meta announced a $95 billion stock offering, and tech stocks have also edged up from their October lows.

But some unfavorable factors remain: the overall IPO market environment is under pressure, Anthropic's fundraising target is extremely ambitious, and the success or failure of this IPO will have a major impact on the stock market and credit markets.

Founded by Dario Amodei, the company plans to raise at least as much as SpaceX's record $86 billion IPO set in June; Reuters reported that the company behind the Claude chatbot could raise up to $100 billion, surpassing SpaceX.

Meta's massive share sale at least sends a new signal: investors are willing to commit big money to the AI theme. The Facebook parent sold $38 billion of common and preferred stock, above its initial target; it also plans to raise another $60 billion through private placements starting next year. Chip giants Nvidia, AMD and Broadcom will subscribe for a small portion, but the market will still bear most of the absorption pressure. Even so, Meta's shares fell less than 2% after the news landed on Monday.

The credit market initially absorbed the financing needs of AI capital spending, and now it is equity investors' turn to take up the baton. Consulting firm Yorkville Ives noted that Meta's "debt-financing phase has come to an end," with its long-term borrowings rising to $81 billion in the third quarter from just $29 billion a year earlier.

Another large tech equity financing also landed this month: Schneider Electric raised 6 billion euros ($6.7 billion) to acquire U.S. software company PTC for $23 billion. The deal is huge for both the French company and the European market, and counts as a standout result against the backdrop of sharply higher financing costs in France.

These epic equity deals appear to be good news for Anthropic. But seasoned blue-chip companies issuing new shares is not the same thing as an IPO. Meta and Schneider are well-known names to the market, and existing investors have ample reason to add to their positions when a favored company issues shares at a discount. An IPO, by contrast, is the ultimate test of risk appetite. Although Anthropic currently enjoys the halo of a "must-own asset," the decision to buy or not still rests with investors, who need to free up funds to participate.

In addition, the IPO market environment has deteriorated compared with when SpaceX listed: the U.S. 10-year Treasury yield has risen from 4.5% to 5%. SpaceX's share price has slightly outperformed the broader market, but most U.S. IPOs this year have fallen short of expectations, with average gains of just 2%; data center operators' IPOs have been especially dismal.

Anthropic's revenue is growing rapidly, but its valuation logic is harder to grasp than SpaceX's. SpaceX has a mature rocket launch business and a profitable Starlink communications business that continuously feeds Musk's AI ambitions. As with SpaceX, retail money will also underpin demand for Anthropic.

Will this affect only Anthropic itself, or the entire market? A reasonable question is whether equity investors can still absorb another massive financing need. U.S. capital markets are the deepest in the world, but liquidity is not infinite. The money asset managers use to subscribe for new shares comes either from new client inflows or from selling existing holdings. In June, before SpaceX's offering, nearly all of the S&P 500's top ten weighted stocks edged lower, which may have been a signal that investors were freeing up cash.

Some equity strategists, after reviewing fund flows, remain optimistic about the market's capacity to absorb supply. On one hand, tech giants such as Meta and Alphabet have shifted from buying back stock to issuing new shares, turning from returning cash to the market to draining liquidity; but buybacks by companies in other sectors have offset this effect, and the buyers are not only direct beneficiaries of AI capital spending such as Nvidia and Micron.

Deutsche Bank strategists believe this wave of equity issuance stems from strong buying demand, and that the pace of new share supply will slow but will not end the stock market rally.

Goldman Sachs research shows that historically large IPOs have only brought short-term pressure on the stock market; over the past 30 years, in the weeks around mega-IPOs, the S&P 500 on average stayed flat before resuming its rise. Goldman analysts said: "We do not expect the new supply of shares to end the bull market in the short term," noting that corporate equity financing this year accounts for only 1% of total U.S. stock market capitalization.

In theory, the market has the capacity to digest this massive new share supply. But Anthropic is ultimately an IPO, and its performance is subject to sentiment and variables. Everyone needs to watch it, because this deal has become a symbol of the AI trade theme—and the AI theme is the core of today's market. news_keyword_pub,usstock,GS&AMD&MU Account opening QR code start

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