"The Most Outrageous IPO of the Year": What Anthropic's Registration Statement Reveals

Revenue up 13-fold, but growth is slowing
More than KRW 600 trillion in commitments... Over three times cash on hand
"Even a slight decline in performance could drive customers away," Anthropic admits

"This will be the most outrageous IPO of the year."

That was the assessment made on October 7 by U.S. research firm New Constructs regarding Anthropic's listing. While the company's valuation had been discussed at $2 trillion in the market, New Constructs valued Anthropic at just $150 billion. Its assessment was that Anthropic would have to earn twice Nvidia's net income over the past year to justify a $2 trillion valuation, a target that would be difficult to achieve under current conditions.

Anthropic filed its registration statement (S-1) with the U.S. Securities and Exchange Commission (SEC) on October 26, and on November 2, it filed an amended statement (S-1/A) containing its third-quarter results. The filing runs about 340 pages even without the financial statements, with 95 pages devoted to risk factors. The offering price and number of shares to be offered remain blank, but the filing contains a broad range of clues to Anthropic's future.

Revenue up 13-fold, but losses are an illusion... Growth is slowing

Anthropic filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for an initial public offering (IPO) on the 26th of last month (local time), officially beginning the listing process. Reuters-Yonhap

The figures in the registration statement suggest that the "bubble" concerns surrounding Anthropic may be somewhat misplaced. Revenue from January through September this year was $33.24 billion, about 13 times higher than a year earlier. Operating losses fell from $5.22 billion to $1.26 billion, or about one-quarter of their previous level.

Over the same period, net losses actually widened to $104 billion. However, $94.3 billion of that was attributable to valuation losses on convertible bonds and other items. In the registration statement, Anthropic said the losses "were primarily attributable to an increase in the fair value of convertible bonds resulting from the increase in the company's valuation." The $6.2 billion in principal lent by Amazon comes with the right to convert into shares at $2 to $5 per share. As the company's valuation rose, the carrying value of these bonds ballooned to $130.5 billion. This creates the paradoxical situation in which the better the company performs, the greater its accounting losses become. However, some argue that these losses cannot be dismissed as merely "on paper," since they also mean greater dilution of existing shareholders' stakes.

There is also considerable concern about the slowing pace of revenue growth. The quarter-over-quarter revenue growth rate fell to 47% in the third quarter, from 132% in the first quarter and 144% in the second. If the 47% growth rate were sustained, revenue would increase tenfold in six quarters, but even Anthropic is not optimistic about that prospect. In its registration statement, Anthropic wrote, "We expect our revenue growth rate to decline over time."

Costs are rising faster than revenue... $437.4 billion in non-cancelable commitments

Computing and infrastructure costs in the third quarter rose 77% from the previous quarter, outpacing revenue growth. The company said the $5 billion in computing capacity secured through short-term contracts to meet rising demand was "significantly more expensive than multi-year contracts." Price cuts and discounts on new models also reduced revenue by $600 million. In other words, it was a quarter in which the company bought at high prices and sold at low ones.

The greater burden lies in the structure of its contracts. Anthropic cited the mismatch as a risk factor, saying, "Revenue is primarily usage-based and a substantial portion is not tied to long-term contracts, whereas computing commitments generally span multiple years." Total commitments amount to $895.4 billion, of which $447.5 billion is due through 2030. Anthropic has committed to minimum spending that is not linked to usage with Google ($121.3 billion), Amazon ($110 billion), and Microsoft ($44.9 billion), and to equipment leases worth $161.2 billion with Broadcom. These four agreements alone, which cannot be canceled except in cases such as a material breach of contract by the other party, total about $437.4 billion (approximately KRW 600 trillion)—more than three times the company's cash and short-term investments of $131.8 billion.

Anthropic's response to these concerns centers on the metric of "usage." The company said, "Our latest model, Opus 5.5, has reduced the cost per task by about 40%," adding that "lower costs per task lead to increased usage." The problem arises when that increased usage shifts toward cheaper models and lower-cost tokens. Anthropic acknowledged that "open-weight models could put pressure on pricing, and even a slight decline in performance could prompt customers to switch to competitors."

Supply is another source of concern. The registration statement said, "New York State has halted permits for large data centers, and opposition to construction is becoming more organized." This risk surfaced in the market soon after the U.S. midterm elections. Concerns spread that a Democratic landslide could lead to tighter data center regulations and slower investment in AI infrastructure, sending the Nasdaq Composite Index tumbling 5.5% on November 5. It was the index's biggest drop since April last year. About $2.5 trillion in market capitalization evaporated from Nasdaq-100 constituents alone, and the market is watching to see whether the sell-off will affect Anthropic's listing timeline.

Anthropic puts "safety" first... Founders' single share carries 50.1% of voting rights

Page 1 of Anthropic's registration statement (S-1/A) filed with the SEC. Screenshot from the SEC website.

Anthropic has long emphasized AI safety over its competitors, and this priority is strongly reflected in its registration statement. The company describes itself as a public benefit corporation (PBC) and defines its public benefit purpose as "the responsible development and maintenance of advanced AI for the long-term benefit of humanity." The board must consider shareholders' financial interests, the interests of those affected by the company's activities, and this public benefit purpose. The registration statement makes clear that taking these factors into account is "not only permitted, but required" of directors.

The company also makes no secret of its willingness to forgo revenue in the name of safety. Anthropic said it had "decided not to develop commercially attractive products, such as image and video generation models," in order to focus computing resources on research and safety. It also disclosed an incident in which a model accessed an actual computer system without authorization during a pre-release security evaluation, and said it would delay or restrict a release if necessary. The filing also warns that such decisions "may not maximize shareholder value."

Anthropic's unusual governance structure underpins this approach. A limited liability company formed by its seven co-founders will receive just one special voting share immediately before the listing. That single share carries 50.1% of the voting rights on ordinary matters at shareholder meetings. The percentage will remain unchanged no matter how many shares are issued, and there is no set expiration date. A separate "Long-Term Benefit Trust" appoints a majority of the board. The trust's trustees cannot own company shares, and their compensation is not tied to the company's performance. Investors in the offering will have one vote per share, but virtually no influence over the composition of the board.

Anthropic devoted 95 pages, about a quarter of its more than 400-page securities registration statement, to the "Risk Factors" section. Reuters-Yonhap

For ordinary shareholders, this structure offers few practical ways to hold management accountable. That is why some have derisively described it as "creative governance." The co-founders have pledged to devote 80% of their respective personal stakes to charitable activities, but the registration statement says the pledge is not legally binding and may be revoked.

Lee Jinkyung, a researcher at DB Securities, said, "As long as growth continues, constraints on shareholder rights do not necessarily translate into a loss of shareholder value." However, Lee noted, "If the founders and the Long-Term Benefit Trust disagree over business restrictions or replacing management, ordinary shareholders have limited means of breaking the deadlock between them." Lee added, "Unless this control structure leads to actual business restrictions or slower growth, performance and valuation remain the key factors in investment decisions."

This content was produced with the assistance of AI translation services.