Anthropic Valued at $1.475 Trillion Ahead of IPO, Expert Warns

Aswath Damodaran, a prominent finance professor at NYU's Stern School of Business, has placed a valuation of $1.475 trillion on Anthropic, an artificial intelligence company, just ahead of its initial public offering (IPO). This figure is slightly below the company's anticipated IPO pricing range of $1.5 trillion to $2 trillion, reflecting a cautious perspective for potential investors eager to capitalize on the burgeoning AI sector.

Damodaran's analysis highlights critical issues surrounding Anthropic's governance, particularly its share voting structure, which he likened to the authoritarian control of Kim Jong Un. He emphasized that as a public benefit corporation, Anthropic's structure may limit the influence of public shareholders, potentially acting as a deterrent for some investors. In a recent post, he advised stakeholders to consider the implications of this governance model on their investment decisions.

In his blog published on October 28, Damodaran underscored the substantial costs associated with computing infrastructure and the competitive landscape that Anthropic faces. He projected that the company's annual revenue could reach $1 trillion by 2036, with an operating profit margin of 27.5%. However, even under these optimistic assumptions, his valuation remains below the IPO pricing range, indicating that investors would need to anticipate faster growth or higher profit margins to justify a higher price.

Despite the impressive revenue growth reported by Anthropic, which saw a 14-fold increase in the first two quarters of 2026 compared to the previous year, challenges persist. The company has expanded its enterprise customer base significantly but has encountered a slowdown in growth due to fierce competition and limitations in computing capacity. Furthermore, Anthropic reported an operating loss exceeding $8 billion in the first half of 2026, raising concerns about its long-term profitability and financial health.

Looking ahead, Damodaran advises potential investors to critically assess their expectations regarding Anthropic's future performance. He suggests that while the company has the potential to become a major player in the AI market, investors should be cautious about overestimating its value. With the IPO on the horizon, the market will soon reveal whether the anticipated valuation aligns with the company's actual performance and governance structure.