Are “kindergarten kids” worth trillions of dollars in revenue? Valuation experts give Anthropic (ANT.US) a $1.48 trillion valuation
The Zhitong Finance App learned that valuation expert and New York University professor Aswath Damodaran said on Wednesday that Anthropic (ANT.US)'s annual revenue could reach 1 trillion US dollars by 2036, and gave the artificial intelligence startup a reasonable valuation of 1.48 trillion US dollars before its initial public offering (IPO).
Anthropic's IPO, which is expected to launch next month, could be a milestone in the AI industry and test whether large-scale investments in the industry can translate into sustainable growth and profits.
Damodaran wrote in a blog post on Wednesday: “The value of Anthropic and other future AI product and service companies ultimately depends on how big you think the AI products and services market will grow and how much of it your company can take.”
“Based on this narrative, I think it's reasonable that Anthropic's revenue is close to $1 trillion in ten years.”
Damodaran's best 2036 revenue scenario was $1.5 trillion, and the worst scenario was $200 billion. The $1.48 trillion valuation assumes an operating margin of 27.5%, a sale-to-capital ratio of 3:1, and a cost of capital of 9.74%.
He wrote that Anthropic's expense growth rate was lower than revenue, which helped reduce operating losses, and made the company not only profitable, but also significantly profitable.
Anthropic IPO risks
Risks include possible cyclicality of corporate AI spending, contractual computing power commitments, credit ratings, and regulatory changes, he said.
Damodaran said Anthropic's IPO prospectus was “lengthy and intrusive,” but “similar to looking at a kindergarten child's report card (maybe a precocious and gifted kid, but still a kindergarten kid) and trying to determine how much, if any, should be put into that kid's college fund.”
He criticized Anthropic's five-type shareholding structure. The founder controlled 50.1% of voting rights, saying that this completely offset the influence of public shareholders.
Damodaran wrote, “I think Anthropic's combination of a mutual benefit company structure (giving the company legal permission to dispose of your funds almost at will) and a voting power design that is so self-beneficial dwarfs those companies and makes Kim Jong-un feel ashamed.”
Anthropic IPO Financial Data
According to the S-1 document released on Monday, Anthropic's revenue for the six months ended June 30 was approximately US$16.3 billion, compared to US$1.2 billion for the same period last year. Over the past year, more than 1,900 customers paid the Claude AI developer at least $1 million.
The company had a net loss of US$80.7 billion in the first half of the year. Damodaran said Anthropic lost more than $8 billion in operations in the first six months after adjusting the $72 billion non-cash expenses of convertible bonds.
The company has $112.4 billion in cash and cash equivalents, and over $600 billion in future computing power commitments (future computing power contract commitments).
According to Nasdaq Private Market, Anthropic's latest private equity market valuation is $1.4 trillion. On Stocktwits, retail sentiment for this ticker symbol is “extremely bullish.”