Anthropic's upcoming initial public offering represents a critical test for investor confidence in the artificial intelligence sector, according to CNBC's Jim Cramer. The Claude developer filed its S-1 IPO paperwork two weeks ago and is reportedly meeting with major investors this week. The company is targeting a trading debut as early as next Thursday or Friday, the Wall Street Journal reported.
Cramer argued that the massive capital expenditures currently being directed toward AI chips and data centers depend on developers like Anthropic generating sufficient revenue to justify the spending. He noted that Anthropic is one of a few companies at the end of the food chain for these investments. "If it can't do that, or if it cannot convince enough investors that it will do so, then it's tough to justify all of the AI investments that are being made today," Cramer said.
The interconnected nature of the industry means a failure in the Anthropic deal could impact multiple major players. Anthropic's IPO prospectus shows its commitment to renting computing capacity has grown from an initial $1.25 billion monthly to more than $3 billion. This capacity is provided by companies like SpaceX, which rents computing power to customers including Alphabet's Google and Anthropic. Google pays approximately $900 million a month for such capacity.
Cramer suggested that if Anthropic fails to fulfill its contracts, estimates for SpaceX, Nvidia, and various other compute providers would likely need to be revised downward. Furthermore, the valuations of Alphabet, Amazon, and Nvidia are sensitive to changes in Anthropic's valuation, as all three companies have invested in the developer.
Investor appetite for the offering has shown signs of weakening. Anthropic's potential valuation has reportedly dropped from as high as $2 trillion earlier this fall to as low as $1 trillion following a recent technology sell-off. This decline follows concerns that political shifts regarding midterm elections could lead to slower data center construction.
