Anthropic Withdraws $69 Billion IPO Filing After Pricing Error As Michael Burry Flags Spending Risks And Aswath Damodaran Cuts Estimate

Anthropic has reportedly withdrawn an initial version of its proposed $69 billion initial public offering (IPO) filing after sending bankers incorrect pricing details, according to a Reuters report.

Anthropic's proposed IPO has drawn attention for another reason. The company is reportedly seeking a valuation of $1.5 trillion, but questions are emerging over whether its business fundamentals support such a figure. Concerns about the pace of AI spending and the returns it can generate have added to the uncertainty.

What Went Wrong With Anthropic's IPO Filing?

Anthropic first sent bankers a copy of its IPO filing late Monday, mentioning a sale of around 867 million shares at $70 to $80 apiece. It later sent another email saying the pricing figures were wrong and that a revised version would follow. Reuters reported the development, citing people familiar with the emails.

The company has yet to share the corrected pricing details.

The development has also attracted criticism from prominent investor Michael Burry. In a Substack post, Burry highlighted what he considers major risks in Anthropic's business model.

He pointed to the company's spending commitments, slowing revenue growth and financial ties with major technology companies. Anthropic has reportedly committed around $537 billion towards computing capacity from Amazon, Alphabet and Microsoft. Its total commitments, including preliminary agreements with other companies, amount to roughly 12 times its current annualised revenue.

Burry described these commitments as a major vulnerability for the AI industry.

Aswath Damodaran Cuts Anthropic's Valuation Estimate

Veteran valuation expert Aswath Damodaran has also revised his assessment of Anthropic. He recently lowered his estimated valuation to $1.45 trillion from $1.475 trillion.

His latest calculation factors in trailing 12-month revenue and operating income, including recently leaked third-quarter figures.

Damodaran said his valuation remains close to the lower end of the estimated IPO pricing range. He also cautioned that Anthropic's market performance could be volatile once it begins trading.

The differing assessments highlight the uncertainty surrounding AI valuations as investors weigh future growth against the enormous costs of developing and operating AI models.

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