Anthropic’s Pending IPO Will Be a Must-Watch Event for Investors

We have two issues that we want to discuss on Tuesday afternoon: the latest on Anthropic’s (ANT) pending IPO and what’s going on with Nvidia (NVDA).

Anthropic’s IPO

In our opening comments over the last few days, we’ve been discussing price talk and valuation chatter for Anthropic’s IPO, which is expected to kick off shortly and price by the end of next week. That chatter has been for valuations well below the targeted $2 trillion figure bandied about several months ago. More recently, reports discussed a deal near $1.5 trillion, but over the last few days following the AI rout that weighed on the overall market, the talk has been between $1.1 trillion and $1.3 trillion.

Now, with more details emerging on the offering, it looks like Anthropic is targeting a $1.4 trillion deal that would raise ‌up to $64.4 billion by selling 825 million shares priced between $70 and $78 apiece. Alongside that, it’s also being reported the company will also raise $26 billion via a separate private placement deal with cornerstone investors, including Google (GOOGL), Nvidia and Advanced Micro Devices (AMD).

The top end of that $70 to $78 range against that 825 million share figure equates to that $1.4 trillion valuation target.

According to the IPO filing, OpenAI’s run-rate revenue was roughly $81 billion at the end of October, up $10 billion from the end of September. At the end of September, the company counted more than 11,900 customers with $100,000 or more of revenue on a trailing 12-month (TTN) basis up from more than 950 exiting September 2025. Other shared metrics existing September 2026 includes more than 1,900 customers with $1 million or more of revenue on a TTM basis and approximately 250 customers with $10 million or more on a TTM revenue basis

What’s bound to become a focal point of the roadshow Q&A is the $567 million operating loss posted in Q3 2026 compared to the $974 million operating income for Q2 2026. That is a hefty swing quarter to quarter, but Anthropic explains that as being primarily driven by $5.0 billion of compute under short-term commitments. That cost is “significantly more” than comparable compute procured under the company’s multi-year commitments.

Eyeballing those customer figures above, it smells like Anthropic was a victim of its own success and needed to not only ramp capacity but grab whatever excess capacity it could get its hands on. The question that will be kicked around more than a few times is how long will that short-term usage of compute persist and what is the roadmap to expected normalized margins?

Part of that will tie back to Anthropic’s own capacity and that means its capex plans. Per the S-1, it has total spending commitments of $895.4 billion, with approximately $69.8 billion due before October 2027, and $447.5 billion in total expected to be incurred before December 31, 2030. That suggests Anthropic is on the hook to spend more than $100 billion each year between 2028, 2029 and 2030. Between 2031 and 2045 is the expected timeframe for spending the other $447.5 billion.

That triggers the second hot topic that is likely during the upcoming roadshow. In addition to target operating margins, what’s the cash flow and free cash flow expectations in the coming years and how does that stack up against those spending levels?

As that conversation is had, we should expect the folks building their models to refer to revenue expectations between 2027 and 2030 to see how all the figures come together and what levels of earnings and cash flow they kick out.

In our view, it will be those revelations that influence the price talk as we move through the IPO roadshow and price the deal, assuming it doesn’t get pulled.

Google, AMD and Other Named Suppliers

Getting back to that $26 billion private placement deal that involves Google, Nvidia, and AMD, the S-1 clearly spells out that Anthropic runs a multi-chip compute architecture across AWS Trainium, Google TPUs, NVIDIA GPUs and AMD GPUs. From page 208 in the S-1:

AWS Trainium. Our strategic collaboration with Amazon provides us with access to AI accelerators, including custom-designed Trainium chips, and compute infrastructure, as well as the opportunity to influence future generations of Trainium chips.

Google TPUs. Our partnerships with Google and Broadcom provide us with access to compute capacity powered by Google TPUs across multiple generations of the TPU platform.

NVIDIA GPUs. Our strategic partnership with NVIDIA Corporation (“NVIDIA”), together with our arrangements with Microsoft, SpaceXAI, Nscale, Lambda, and other cloud providers, provides us with access to compute capacity powered by NVIDIA GPUs, including NVIDIA Grace Blackwell and Vera Rubin GPU systems, as well as the opportunity to collaborate directly with NVIDIA on design and engineering to optimize future NVIDIA hardware for our workload profile.

AMD GPUs. Our relationship with AMD, together with our arrangements with approved manufacturers of AMD-based Helios rack-scale systems and third-party service providers, provides us with access to compute capacity powered by AMD Instinct™ GPUs, including AMD Instinct™ MI450 Series GPUs, as well as the opportunity to collaborate directly with AMD through a multi-year engineering collaboration.

Are we surprised that these companies are helping fund the company that will turn around and purchase chips from them? We won’t argue that there is at least a whiff of circular financing, but we also see it more as suppliers investing in a customer so it can ramp its business and purchase even more from them over time.

The S-1 also adds color to Anthropic’s relationship with Broadcom (AVGO), naming it a key infrastructure partner alongside Amazon, Google and Microsoft (MSFT).

The question that we’re wondering is as Amazon (AMZN), Google, Microsoft and others need capital to fund their own capex what are the lockup expiration conditions for their investments?

Not to put too much pressure on the Anthropic offering but to the extent it surprises to the upside when priced or if the offering is upsized, that will relieve some of the near-term overhang that is still on the hyperscalers and AI/data infrastructure companies. With Marvell (MRVL), there is still the overhang associated with the announced takeover of Lumentum (LITE), but the implied probability of the deal closing is hovering around 50%. Arbs point to the more than 14% gap between Marvell’s offer and Lumentum’s share price.

There is also potential regulatory risk if Marvell goes ahead with China’s merger control authority being the biggest hurdle. China’s regulatory scrutiny derailed Qualcomm’s (QCOM) bid for NXP Semiconductors (NXPI) in 2018, and Intel (INTC) scrapped its offer for Tower Semiconductor (TSEM) in 2023 after failing to secure Beijing’s approval.

Nvidia

Our comment above on the potential for Anthropic’s IPO to remove an overhang on AI and data center infrastructure goes for Nvidia’s chip business as well. However, as you have no doubt seen by now, there are numerous questions surrounding CEO Jensen Huang as well as the Nvidia board and the FBI investigating.

Jensen has also been requested to appear in Washington, D.C., on November 18, the day after Nvidia reports its quarterly results, for a joint closed-door briefing with congressional committees. The committees are expected to question Jensen regarding Nvidia’s security protocols against foreign adversary espionage and his interactions with Alice Huang (an executive at Megaspeed who U.S. intelligence officials suspect was targeted or recruited by Chinese intelligence).

The outcome of those meetings and investigations will likely influence whether Jensen remains in his CEO role at the company, and it’s possible those outcomes may not be immediately available. If Jensen is removed, given the multi-year nature of the business, we should remember that Nvidia operates on a one-year product cadence, with public roadmaps mapped out roughly two to three years in advance and deeper R&D pipelines running three to five or more years ahead. This would suggest his removal doesn’t pose a major risk to Nvidia, but whether he is replaced by as charismatic person that can articulate where AI will go from here and the demands that means for infrastructure, that is TBD.

Given the rapid pace of the decline in NVDA shares over the last few days, which has them deeply oversold with an RSI of 23.18, odds are it won’t take much good news to pop the shares. As we learned from Taiwan Semi’s October revenue report, demand remains robust. Barring any clarity on those investigations in Jensen or the outcome of the congressional committee meetings, that brings us back to Anthropic’s pending IPO.

Between now and then we have quarterly results after Tuesday’s market close from CoreWeave (CRWV), and we’ll look to review the demand dynamics it shares and how it answers funding and capacity buildout questions as we contemplate keeping our current One rating on NVDA shares or lower it to a Two rating.

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At the time of publication, TheStreet Pro Portfolio was long AMD, AMZN, AVGO, GOOGL, LITE, MRVL, MSFT, NVDA.