Anthropic Contemplates IPO amid AI Market Concerns
Anthropic, an Artificial Intelligence (AI) company, is reportedly discussing an Initial Public Offering (IPO) according to the Financial Times. This consideration comes amidst multiple warnings from senior central bank officials about a potential AI market bubble due to excess liquidity.
Possible Changes in the Federal Reserve
Simultaneously, Kevin Hassett, the director of the National Economic Council, has emerged as President Donald Trump’s favored candidate to replace Jerome Powell as chair of the Federal Reserve. This could hint at further interest rate cuts in 2026 which would introduce more inexpensive money into the market.
Competitive AI Market
Anthropic is currently in negotiation for a new round of venture capital funding that would value the AI company at $300 billion. Going public could provide Anthropic with a significant influx of cash, allowing it to effectively compete against rivals such as Sam Altman’s OpenAI. Deutsche Bank analysts Adrian Cox and Stefan Abrudan have noted some weaknesses in OpenAI’s business, citing slowing growth in consumer subscriptions for OpenAI’s ChatGPT.
Increasing Subscription Value
While OpenAI’s subscriptions have seen a decline, subscription value for Anthropic and another AI company, Perplexity, has surged despite their smaller customer base. Anthropic, in particular, has shown a near sevenfold increase in subscription value this year.
Potential IPO Amid Market Instability
While it is common for companies of Anthropic’s size to consider an IPO as a means to avoid repeatedly seeking private venture capital, the company has not made a definitive decision yet. The potential IPO would occur in a market environment fraught with concerns over bubble-like activity, particularly in the tech industry. The Bank of England warned on Tuesday about this situation, emphasizing the risk of a sharp correction specifically for AI-focused technology companies.
Future Market Predictions
Investor Michael Burry, known for his accurate prediction of the 2008 financial crisis, has expressed concern about a bubble in tech stocks and predicts a lengthy bear market. Additionally, anticipated rate cuts from the Federal Reserve could add more liquidity to markets that are already nearing record highs. This has led to predictions of a 90% chance of a 0.25% cut in December and a 40% chance of another cut in March 2026, according to the CME FedWatch tool.
Current Market Snapshot
- S&P 500 futures were up 0.12% this morning. The previous session closed up 0.25%.
- The STOXX Europe 600 was up 0.14% in early trading.
- The UK’s FTSE 100 was down 0.19% in early trading.
- Japan’s Nikkei 225 was up 1.14%.
- China’s CSI 300 was down 0.51%.
- The South Korea KOSPI was up 1.04%.
- India’s Nifty 50 is down 0.18%.
- Bitcoin rose to $92.8K.
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