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Anthropic IPO predictions? Anthropic will be IPO'ing next week. At first it was supposed to be $2 trillion, then it collapsed all the way down to $1.1 trillion, but now I see $1.5 trillion and I bet it's higher.
I will probably try to get an allocation and then flip it immediately. Long term, I'm bullish on the frontier labs but with high variance. I can easily see a 90% decline or a 1000% increase within 3 years.
Bearish takes:
Horrible governance. Shareholders have no voting power and few rights. You are subordinate to the founders (51% voting rights), to the foundation, and to humanity in general. Even if Anthropic takes over the light cone, it will never pay a dividend.
Revenue growth has slowed. The H1 revenue growth was probably a one time thing due to token-maxxing. Will be much harder from now on and other models are "good enough" for most tasks.
Employees will be looking to cash out after IPO lockups expire.
Will the hyperscalers kneecap Anthropic? Quite possibly. Anthropic is openly competing with everyone. Why should Google, Amazon, or SpaceX rent them space? Good chance that Google and Amazon dump shares then stop renting. Elon in particular can pull the plug on their compute with 90 day notice.
If they are successful, they will be nationalized.
I would be shocked if China doesn't steal their weights. I wouldn't be surprised if they already have.
Bullish takes.
The big one. Recursive self-improvement leads to them dominating all industries. Somehow they get there before OpenAI/Google/SpaceX and the advantages compound.
People will ignore the horrible governance. It won't matter until it does and by then it won't matter. Look how long Snapchat was able to coast on the worst governance of all time (worst until now, lol).
I find investing on this weird. It's essentially investing in Theranos because they said they can tell diseases from a single drop of blood. They never proved they could, and none of the frontiers have even proven an inkling that RSI is possible, let along that it can be applied across a wide distribution of industries at a cheaper cost than skilled humans. It's investing in hype and dreams. I think any investment in frontier IPO should not depend on the speculation of what they could figure out but on the business case for what they can do and shown improvement in being able to do now.
At the point where they would have proven RSI can create the kind of economic value they're imagining, the share price would be far higher than what it is now. It's like investing in Amazon in 1997: it took almost a decade for them to show they could make e-commerce profitable, as opposed to being a pets.com but for books.
It's risky and speculative, but if someone believes the market undervalues the potential business model, you want to get in before the market catches up.
Amazon in 1997 was not priced as if it would be the highly profitable market leader. Anthropic already is, even though there is uncertainty as to whether they can actually make it there.
So the upside here seems a good deal smaller to me, unless Anthropic manages to take over every industry out there.
It depends on what you consider Anthropic's market.
In 1999, Amazon was priced at 18x Barnes and Noble, which was the market leader in bookstores. Even after the bust, it was 3x Barnes and Noble. Investors speculated that it would be able to break into the broader market. And it did, as we know now but was uncertain at the time.
For Anthropic, right now its proven market is in coding. And if you assume that it will be the undisputed leader but only in the relatively small market of coding assistance, it's wildly overvalued, even at $1T. But if you instead see it as the potential market leader in the market of all intellectual labor (or even labor in general), it's wildly undervalued (mod the other risks I mention in a sibling comment).
I agree the gap between book retailer and general retailer is smaller than the gap between coding and all intellectual labor, though the payoff of closing that gap is also much, much bigger.
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