Tech’s biggest companies will see a giant payday from Anthropic’s IPO

Detailed summary

While startups have been at the forefront of AI development, the industry’s biggest companies have profited the most from demand for the technology ...

When Anthropic goes public this month in what is expected to be one of the biggest initial public offerings in history, it will mint billionaires and flood its hometown, San Francisco, with new wealth.

But some of the biggest beneficiaries will be tech industry giants that are already worth trillions of dollars. Amazon and Google invested in Anthropic and are its largest outside shareholders, together owning more than a quarter of its shares.

If Anthropic’s IPO goes as it hopes, the company will be worth as much as $1.4 trillion. Amazon’s $18 billion investment could balloon to be worth more than $250 billion, and Google’s $33 billion into $140 billion.

The size and sheer speed of the gains are without parallel in the history of corporate venture investments. And they reflect a paradox of the artificial intelligence boom: While startups are at the forefront of AI development, the industry’s biggest companies have profited the most from demand for the technology.

Gil Luria, a tech analyst at investment bank D.A. Davidson, estimated that more than $1 trillion in market capitalization — largely from providing the startup cloud computing and offering its AI to their customers — for each of the companies was a direct result of their relationship with Anthropic.

AI is “an extraordinarily unusual opportunity to forever change the size” of Amazon, Andy Jassy, the company’s CEO, told investors this year.

The big tech companies were in the position to benefit from Anthropic’s rise because they ran some of the most profitable businesses in the world. Like its close competitor OpenAI, Anthropic, which was founded just five years ago, needed huge cash infusions to pay for its AI development. Only a handful of companies were capable of providing that much money.

Even Nvidia, now one of the most valuable companies in the world, did not have that much money on hand a few years ago.

The bets on Anthropic were made when two factors collided.

Opening of the article, excerpted from Khaleej Times Business. To read the rest, open the article on the publisher's site.