Anthropic tells investors Q3 revenue hit $16.8bn ahead of IPO

Artificial intelligence company Anthropic has briefed prospective investors that its revenue surged to $16.8 billion in the three months ending in September, according to people familiar with the matter. The figure represents a 45% increase from the second quarter, when revenue was approximately $11.6 billion. The briefing took place on Wednesday at the company's headquarters in San Francisco as it lays the groundwork for an initial public offering (IPO).

Revenue and Profitability Details

The revenue figures were shared with institutional investors as part of the process to prepare for a stock market debut, which is expected to take place before the end of the year. According to reports, Anthropic stated that it was profitable on an adjusted basis in the third quarter, marking the second consecutive quarter of profitability.

The company also indicated it was cash-flow positive. According to the Financial Times, Anthropic told investors it generated $1.70 in revenue for every dollar spent on computing power during the third quarter. The Wall Street Journal reported that investors expect Anthropic to reach $110 billion in annualized revenue by year-end. Anthropic’s revenue has risen in successive quarters this year, starting from $4.7 billion in the first three months.

Market Reaction and AI Spending Concerns

The disclosure comes amid broader market pressure on technology stocks, particularly those involved in AI infrastructure. Shares in chip makers including AMD, Nvidia and Intel fell sharply on Wednesday. In Asia, shares in Japanese tech investment firm Softbank fell by more than 9% on Thursday morning. South Korean semiconductor giants also declined, with Samsung falling by 9.4% and SK Hynix dropping 10.8%. Tech-heavy indexes in the region were also down, with South Korea's Kospi 7.6% lower and Japan's Nikkei 225 falling by 4.8%.

These market movements followed remarks by Hock Tan, the chief executive of US tech manufacturer Broadcom. Tan said at a conference in Singapore on Monday that many investors have "no clue" and have set "extreme expectations only to find out that it's almost like they are in a casino."

IPO Plans and Industry Context

Anthropic is preparing for a highly anticipated IPO, reportedly slated for November. The company has been vocal about the risks associated with AI development. Chief executive Dario Amodei has called on the pace of development to slow down. The company continues to expand globally, having opened an office in Singapore on Wednesday.

Rival OpenAI has also been eyeing a stock market listing, which is expected to value the firm at more than $1tn. However, OpenAI chief executive Sam Altman said in September that his company will not go public this year as it addresses concerns about the technology's safety. An Anthropic spokesperson declined to comment on the specific figures revealed to investors.

Why it matters

Anthropic's financial performance serves as a key indicator for the AI industry's ability to finance the massive infrastructure costs required for model development. The reported profitability and cash-flow positivity may alleviate some investor concerns regarding the sustainability of AI spending, even as broader market volatility continues over infrastructure investments.

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Sources

• bbc.com: Anthropic flags revenue surge to investors ahead of stock market debut
• cnbc.com: Anthropic's Q3 revenue is said to hit $16.8 billion ahead of IPO

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.