Anthropic Intends to Trade on the Nasdaq Under the Ticker ANT

Just after the two largest initial public offerings (IPOs) ever -- Space Exploration Technologies and SK Hynix -- Anthropic is coming through with its own IPO that's expected to topple both.

The company has been talking about going public for some time, and it filed its prospectus this past week. Will this be a great opportunity?

What all the hype is about

Anthropic has only been around since 2021, when former OpenAI employees founded it to address disagreements they had about artificial intelligence (AI) development. They created the popular Claude AI model, and the company has become one of the most important voices in the AI community.

Image source: Getty Images.

After months of speculation about its plans, Anthropic filed a prospectus this week detailing its operations, financials, risks, and opportunities. It hasn't yet announced a price, though, and many important details were missing from the prospectus, including third-quarter performance.

What is in the prospectus, though, is fascinating, exciting, and thought-provoking. The exciting part starts with the company's recent performance. In the second quarter, revenue increased nearly 15-fold from the year-ago period to $11.6 billion. It said it has 11,900 separate customers who each pay at least $100,000, and 1,900 customers who pay at least $1 million.

The company reported $974 million in operating income in Q2, reversing what were quarterly losses. Although its net loss ballooned to $66 billion, that included a non-cash charge related to some of its private fundraising rounds. The operation is making money, but the company has other commitments eating into its profits right now.

Management has an exciting mission, and it believes that its technology can solve massive global problems and bring good to the world. It opened the prospectus by saying, "We believe that AI is one of the most consequential technologies in human history. If managed well, it could rapidly accelerate scientific innovation, greatly increase economic growth rates, bring cures for major diseases within reach, and solve problems that have resisted generations of human effort."

94 pages of risk

Notice the phrase, "if managed well." Then put that into 94 pages of risk factors, which is what's in the prospectus. There are myriad risks, starting with a danger to humanity. "Our AI models may behave in unintended, misaligned, or autonomous ways, including by taking harmful actions that no user or third party directed," is the core risk.

The other risks fall into several groups. Some include progress developing its models, major competition, the compute costs necessary to run the development, and that voting rights are concentrated in management. There are many more.

The company hasn't yet set an IPO price, and that's likely to be determined after speaking with potential investors during its upcoming IPO roadshow. That could be a crucial factor for many on-the-fence investors.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.