Anthropic's valuation and investment value

These past two days, the market has been abuzz with discussions about a batch of high-tech companies that may go public this year, including OpenAI and Anthropic.

These two companies have been shrouded in mystery and controversy recently, not only because they are direct competitors, but also because there have been numerous rumors surrounding their potential IPOs.

For example, just two days ago (March 31st), OpenAI announced the completion of another $122 billion in financing. This funding round has boosted its valuation to $852 billion. In contrast, Anthropic's valuation after its previous funding round was only around $380 billion, less than half of OpenAI's latest valuation. While OpenAI is extremely popular in the primary market, rumors suggest that its private equity investment in the secondary market has unexpectedly cooled. Approximately 600 million institutions are reportedly in a hurry to divest their $600 million secondary market share, but no one is willing to take it over. However, on the other hand, approximately $2 billion in funds are hoping to enter Anthropic, which has led to secondary market prices for Anthropic exceeding $600 billion. In previous articles, I publicly expressed my optimism about two AI companies that I could somewhat understand, and one of them is Anthropic. If OpenAI and Anthropic can really go public this year, I think the opportunities they present are worth paying close attention to. First, the US stock market is currently experiencing significant volatility; the Nasdaq and S&P 500 have both retreated by about 10% from their highs. If the situation in the Middle East continues to escalate for a while, further driving down US stock prices, that would be even better. Secondly, besides these two AI companies, even larger giants like SpaceX and a host of other prominent companies are waiting to go public this year. This scale of fundraising will significantly drain overall market liquidity. In this environment, the listing prices of OpenAI and Anthropic may not be as high as previously estimated. Finally, between OpenAI and Anthropic, I very much hope that OpenAI can be the first to go public, thus further draining the liquidity of the AI ​​sector, so that it's Anthropic's turn. Once it goes public, its price is unlikely to be too high. These are all qualitative analyses; next, let's try a quantitative analysis of Anthropic. Currently, Anthropic's revenue from enterprise-side (to B) business accounts for more than 80% of its total revenue, making enterprise applications its primary source of income. The US and China differ. In China, enterprise users have a weaker willingness to pay, but in the US, if a product is good, enterprises have a strong willingness and ability to pay. Furthermore, once enterprise users become accustomed to a product, they generally do not easily switch. The reason why some well-known, fossil-level technology companies (such as IBM) continue to exist today is mainly due to their enterprise users. Furthermore, the enterprise user market is generally not easy for foreign competitors to enter, and Anthropic itself is already a leading player in this field. Therefore, once it achieved a monopoly in the US market, the barrier to entry was quite high. Therefore, I am quite optimistic about the Anthropic pattern. Anthropic has been operating at a loss for several years, but based on its current growth momentum, it is estimated that it will achieve initial break-even in about two years (2028) and net profit of around $50 billion by 2030. Starting from 2030, if the company can continue operating for another 20 years, its total net profit will be one trillion US dollars. Based on this rather rough estimate, I think Anthropic's market capitalization is fairly high if it's below one trillion US dollars.