Anthropic recently filed for IPO.
asserted
Anthropic → file → IPO
At an estimated $1.5 to $2 trillion, it will be one of the biggest IPOs of all time, rivaling SpaceX, and possibly the biggest.
uncertain
it → estimate → SpaceX
For reference, Facebook’s valuation when it had its blockbuster IPO in 2012 was $104 billion, and Google’s valuation in 2004 was $23 billion.
asserted
valuation → have → 2004
Anthropic will instantly become one of the world’s most valuable companies — Google itself is now worth $3.4 trillion, and Nvidia and Apple are both worth around $5 trillion.
asserted
Nvidia → become → companies
This naturally has a lot of people asking: What’s the upside to buying Anthropic?
asserted
upside → have → Anthropic
Even if it grew to be as valuable as Apple or Nvidia — in other words, if it became one of the most valuable companies on planet Earth — that would only be a multiple of 2 to 2.5.
asserted
that → grow → 2.5
But if Anthropic stumbles, that lofty valuation could come tumbling down.
uncertain
valuation → stumble → ?
There are certainly lots of reasons Anthropic could stumble.
uncertain
Anthropic → be → reasons
Demand for AI could take longer to materialize than people think, perhaps because companies have trouble integrating AI into their existing business models.
uncertain
companies → take → models
The U.S. government could decide that Claude’s hacking capabilities represent a national security threat — especially after the recent wave of AI-assisted cyberattacks — and decide to regulate, appropriate, or otherwise restrain the company (the spat with the Department of War might represent the beginnings of that conflict).
uncertain
spat → decide → conflict
One company (SpaceX?) might end up monopolizing all of the compute, squeezing Anthropic’s profits.
uncertain
company → end → profits
Competition from OpenAI and Google, or Chinese models, might result in a competitive race to the bottom that forces down Anthropic’s margins.
uncertain
that → result → margins
In order to balance all that uncertainty and risk on the downside, Anthropic needs to have huge upside.
asserted
Anthropic → balance → upside
It needs a way that it could be worth a lot more than $2 trillion in the years to come.
uncertain
it → need → years
For comparison, if you bought Google when it IPO’d, your investment would have gone up by over 130 times by today.
asserted
investment → buy → today
To equal that performance, Anthropic would have to be worth $200 to $260 trillion by the late 2040s.
asserted
Anthropic → equal → 2040s
That’s almost half of the total wealth that exists in the entire world today.
asserted
that → ’ → world
For Facebook, the number is around 16x, meaning Anthropic would have to be worth $32 trillion by the early 2040s — still an impressive performance, considering that that’s more than six times the value of the most valuable company in 2026.
asserted
that → mean → 2026
How could Anthropic manage that kind of growth?
uncertain
Anthropic → manage → growth
One possibility is that the world economy itself will grow at a very rapid pace, thanks to AI.
asserted
economy → grow → AI
Some AI researchers think that growth could soon accelerate to fantastically high levels.
uncertain
growth → think → levels
But most economists bet against that, and even most AI industry insiders expect the growth speedup to be much more modest.
asserted
speedup → bet → that
Even 7% nominal growth — 4% real growth plus 3% inflation — would only make the economy about 2.75x larger by 2041, and 4.43x larger by 2048.
asserted
economy → make → 2048
So in order to have the upside of a Facebook-like outcome — let alone a Google-like outcome — Anthropic probably can’t just ride a wave of economic growth.1
asserted
Anthropic → have → wave
It’ll need to capture a greater fraction of the value that our economy produces.
asserted
economy → need → that
So far, the company has been doing exactly that — and at an extremely rapid rate.
asserted
company → do → rate
Its revenue has grown faster than any company of similar size in all of history.
asserted
revenue → grow → history
And despite this explosive growth, the company is now making an operating profit:
asserted
company → make → profit
Businesses usually have to spend more money to make more money at the outset, but Anthropic’s Claude Code is a product that sells itself — relative to just one year ago, the company is making more than 3 times as many dollars of revenue for each dollar that it spends on compute:
asserted
it → have → compute
As SemiAnalysis writes, this is “the most efficient scaling of a business in the history of capitalism”.
asserted
this → write → capitalism
Jeffrey Bussgang has a good breakdown of Anthropic’s recent IPO filing, and it’s full of amazing details — incredible user retention, a broadening base of customers, and so on.
asserted
it → have → customers
And Anthropic is selling a product whose adoption rate is still very low.
asserted
rate → sell → product
As Aaron Levie points out, most big companies are still spending only a pittance on AI, and could afford to spend a lot more:
uncertain
companies → point → lot
And yet for this growth to continue, Anthropic must do more than simply make great products.
asserted
Anthropic → continue → products
It will need to stave off the competition for decades on end.
asserted
It → need → end
It will, in Wall Street jargon, need a “moat”.
asserted
It → need → moat
Why Anthropic needs a moat
asserted
Anthropic → need → moat
When I was teaching business economics to MBAs at Stony Brook, I spent lots of time on the question of why companies make profit.
asserted
companies → teach → profit
This might sound like a stupid question, especially if you’ve been conditioned to think that there’s some kind of magic force called “capitalism” that companies can use to extract money from people and hand it to their shareholders.
uncertain
companies → sound → shareholders
But in a world of perfect competition, companies should keep trying to undersell each other until their profit goes to zero — or at least, until it goes to a level where companies are just able to pay for their investments.
asserted
companies → keep → investments
…and 22 more, not listed.
The Aporia
