"Kindergarten kid" aiming for trillion-dollar revenue? Valuation expert gives Anthropic (ANT.US) a US$1.48 trillion valuation

Valuation expert and New York University professor Aswath Damodaran said on Wednesday that Anthropic (ANT.US) could reach US$1 trillion in annual revenue by 2036, and he assigned a fair valuation of US$1.48 trillion to the artificial intelligence startup ahead of its initial public offering (IPO). Anthropic's IPO is expected to launch next month, potentially a milestone event for the AI industry, and will test whether the sector's large-scale investments can sustainable CKH HOLDINGS profits. "Ultimately, the value of Anthropic, and other AI product and service companies in the future, depends on how big you think the AI product and service market will become, and how large a share your company can capture of it," Damodaran wrote in a blog post on Wednesday. "Based on this narrative, I think it is reasonable for Anthropic's revenue to approach US$1 trillion within a decade." Damodaran's best-case scenario for 2036 revenue is US$1.5 trillion, with a worst-case scenario of US$200 billion. The US$1.48 trillion valuation assumes an operating margin of 27.5%, a sales-to-capital ratio of 3:1, and a cost of capital of 9.74%. He wrote that Anthropic's expenses are growing more slowly than revenue, which helps reduce operating losses and puts the company on a path not only to profitability but to significant profitability. Anthropic IPO risks He said risks include possible cyclicality in enterprise AI spending, contracted compute commitments, credit ratings and regulatory changes. Damodaran said Anthropic's IPO prospectus is "long and full of distractions," but is "akin to looking at a kindergarten kid's report card (perhaps a precocious and gifted child, but still a kindergarten kid) and trying to determine how much to put into this child's college fund, if anything." He criticized Anthropic's five-class share structure, in which the founders control 50.1% of voting power, saying this completely nullifies the influence of public shareholders. "I think Anthropic combines a public benefit corporation structure (which gives the company legal permission to do almost whatever it wants with your money) with a voting-rights design so self-serving that it dwarfs those companies and would make even Kim Jong Un ashamed," Damodaran wrote. Anthropic IPO financial data The S-1 filing released on Monday showed that in the six months ended June 30, Anthropic's revenue was about US$16.3 billion, compared with US$1.2 billion a year earlier. Over the past year, more than 1,900 customers paid the Claude AI developer at least US$1 million. The company posted a net loss of US$80.7 billion in the first half. Damodaran said that after adjusting for US$72 billion in non-cash charges related to convertible bonds, Anthropic's operating loss in the first six months exceeded US$8 billion. The company has US$112.4 billion in cash and cash equivalents, as well as more than US$600 billion in future compute power contractual commitments. According to Nasdaq Private Market, Anthropic's latest private-market valuation is US$1.4 trillion. On Stocktwits, retail sentiment for the ticker is "extremely bullish."