4 Major Winners From an Anthropic IPO

There's a new initial public offering (IPO) coming soon: Anthropic. This one is highly anticipated, as Anthropic is one of the two primary artificial intelligence (AI) labs investors are watching (the other being OpenAI). While its prospectus is technically private right now, a copy has leaked to the press, and several interesting tidbits have been confirmed from it.

Anthropic could be targeting an IPO as soon as the week of Nov. 9 after mid-term elections are over. There are several stocks primed to cash in on this IPO, and they fall into two categories: investors and suppliers.

These companies are bound to report great results following an Anthropic IPO. There are two major winners in each category, and I think investors should consider buying them in anticipation of the IPO, as the effects will be enormous.

Image source: Getty Images.

The investors

Two of the biggest investors in Anthropic are Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). It's estimated that Alphabet owns around 15% of Anthropic, while Amazon may own a slightly higher percentage, in the 15% to 20% range. That means if Anthropic goes public at an estimated $2 trillion valuation, Amazon and Alphabet will suddenly have $300 billion to $400 billion of much more liquid assets on hand (once its early investor lockup period ends).

Selling part of their holdings could help provide a huge cash injection right when these two need it most, as they're racing to build out as much AI computing capacity as possible for internal use and for external renting through their cloud computing offerings. However, these two may opt to hold onto Anthropic shares, as demand for AI computing lab investments could drive them higher.

We'll have to see over the next month or so as to what happens, but one thing is for sure: Amazon and Alphabet could get a huge payday after Anthropic goes public.

The suppliers

Another group that's going to benefit from an Anthropic IPO is computing unit suppliers. Two of the biggest names in the industry are Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO), and each of these two is bound to benefit as well. Nvidia makes graphics processing units (GPUs), which are great for general purpose computing and are nearly universal in the AI computing world. Broadcom partners with AI hyperscalers to make custom AI computing units, which are more specialized than a GPU.

Broadcom and Anthropic are partnering to develop their own custom AI chip, but Anthropic also uses custom AI chips from others. Amazon and Alphabet are double-dipping by benefiting, as Anthropic runs some of its workloads on their custom chips.

Anthropic will have access to Nvidia's GPUs, the units it's designing in collaboration with Broadcom, and custom AI chips from both Amazon and Alphabet. That gives it a lot of computing diversity and allows the company to utilize the various computing units to their strengths. This is a great approach from Anthropic, and there's a reason why it's recognized as having some of the best AI models available.

But why is Anthropic going public a big deal for these computing infrastructure suppliers? As a public company, Anthropic can issue shares to raise capital to purchase more computing power. Right now, it has to raise funds in the private markets, and given how large it has gotten, there isn't much appetite for additional fundraising rounds for a trillion-dollar company. So, it must go public to tap into a much larger market to raise capital.

This capital will be spent on computing power, benefiting all four of the listed stocks.

I'm bullish on all four of these stocks, and with the AI arms race still raging at an extreme pace, I think all four of these stocks are fantastic investments and will likely be better picks than investing in Anthropic's IPO.

Keithen Drury has positions in Alphabet, Amazon, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, and Nvidia. The Motley Fool has a disclosure policy.