American billionaire Bill Ackman questions Anthropic's $1.4 trillion IPO valuation

American billionaire Bill Ackman has questioned the investment appeal of artificial intelligence company Anthropic ahead of its planned initial public offering, saying its extraordinary growth makes it difficult to determine what the business is actually worth.

The founder and chief executive of Pershing Square Capital Management made the comments during an interview with Yahoo Finance at its Invest conference on November 12. Although he described Anthropic as potentially the most remarkable business story of the century, Ackman said its uncertain future did not fit his investment firm's approach.

"We think of ourselves as very low-risk investors. We want to invest in businesses that we can predict with a very high degree of confidence," Ackman said. He described Anthropic's progress from a relatively young company into a major artificial intelligence business as remarkable, but questioned whether investors could accurately establish its long-term value.

Ackman explained that Anthropic's prospects depend on several difficult-to-predict factors, particularly its ability to maintain a leading position in the artificial intelligence industry and manage the substantial costs associated with developing advanced models. He compared the opportunity with Visa, an established company held by Pershing Square, which he considers a more predictable investment.

The comments come as Anthropic prepares for a Nasdaq listing under the ticker symbol ANT. According to its preliminary prospectus filed with the US Securities and Exchange Commission on November 10, the company is offering 825 million Class A shares at an indicative price range of $70 to $78 each.

At the upper end of that range, the proposed offering implies a fully diluted valuation of approximately $1.404 trillion. Anthropic is offering 801.35 million newly issued shares, while existing shareholders are selling another 23.65 million shares. The public offering could raise approximately $64.35 billion at the highest indicative price, before underwriting discounts and expenses.

The company is also pursuing a separate private placement involving $26 billion in Class N shares, with participation from major technology companies including Google, Microsoft, Nvidia, AMD, Broadcom, Micron and TSMC.

Anthropic's financial performance illustrates the scale of its expansion and the costs investors must consider. Its third-quarter sales increased 1,127% year over year to $17 billion, according to its amended filing. However, quarterly revenue growth slowed to 47%, compared with 144% in the second quarter. The company also reported a third-quarter net loss of $23.29 billion.

Ackman said the possibility of Anthropic losing its competitive position raises questions about the economics of its business, particularly the capital expenditure required to maintain its artificial intelligence infrastructure.

The billionaire has previously expressed strong interest in artificial intelligence investments. In October, Billionaires.Africa reported on Ackman's prediction that AI could help produce a $1 trillion company in Israel. He also disclosed investments in Israeli technology businesses and plans to establish Pershing Square Ventures to pursue further opportunities.

His latest comments highlight the distinction between recognising artificial intelligence's commercial potential and deciding whether a particular company offers an attractive investment at its proposed valuation.

For Anthropic, the planned listing will test public-market appetite for a business experiencing exceptional revenue growth while facing substantial infrastructure costs and uncertainty over long-term profitability. For Ackman, the opportunity remains impressive, but not sufficiently predictable for his investment portfolio.