Artificial intelligence company Anthropic has reportedly lowered its proposed initial public offering valuation target from $2tn to between $1.42tn and $1.5tn following resistance from institutional investors.
The adjustment comes as the company prepares for a potential listing of its Class A common stock on the Nasdaq Global Select Market, following the reported public release of its Form S-1 registration statement on October 26, 2026.
Investors are said to have questioned the proposed valuation, citing concerns about the company’s heavy spending on artificial intelligence research, long-term computing commitments and declining valuation multiples across the technology sector.
The initial $2tn valuation would have positioned Anthropic among the world’s most valuable publicly traded companies. However, institutional investors reportedly argued that the figure did not adequately reflect the financial risks associated with the company’s business model.
The revised valuation range represents a reduction of between $500bn and $580bn from the initial target.
Despite the valuation concerns, Anthropic’s reported financial performance points to rapid commercial growth.
The company’s amended financial disclosures show that revenue reached $33.2bn in the first nine months of 2026, compared with approximately $2.54bn recorded during the corresponding period in 2025.
Revenue also increased from $11.58bn in the second quarter to $16.8bn in the third quarter, representing a 45 per cent quarterly increase.
The performance has been driven by growing demand for its Claude artificial intelligence models, particularly among businesses using Claude Code for software development, financial institutions automating document analysis and companies deploying AI-powered customer service systems.
However, the revenue growth has come alongside substantial operating expenses.
Anthropic reportedly recorded a gross profit of $6.92bn in the third quarter, representing a gross margin of 41.2 per cent.
Its research and development expenses stood at $5.84bn during the period, while general, administrative and marketing costs amounted to $1.65bn.
The expenses resulted in an operating loss of $567m for the quarter.
The company’s financial disclosures also reportedly showed more than $80.7bn in non-cash accounting losses linked to changes in the valuation of convertible notes and preferred share liabilities.
Another concern for prospective investors is the scale of Anthropic’s long-term computing commitments.
The company reportedly has between $417bn and $518bn in take-or-pay cloud obligations, with additional commitments involving cloud infrastructure, custom silicon and data centre capacity pushing its total future computing commitments to approximately $895bn.
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The obligations involve major cloud infrastructure providers, including Amazon Web Services, Google Cloud and Microsoft Azure.
Under take-or-pay arrangements, companies are required to pay for agreed computing capacity even when actual usage or demand falls below expectations.
Investors are also reportedly comparing Anthropic’s proposed valuation with that of rival OpenAI, whose private fundraising valuation was said to have been revised from $1.4tn to $1.25tn.
The comparison has added pressure to Anthropic’s valuation discussions, with investors questioning whether the company can command a significant premium over its closest competitor.
Beyond its financial structure, Anthropic operates as a Delaware Public Benefit Corporation, a model that requires it to consider public benefits alongside shareholder interests.
Its governance structure also includes a Long-Term Benefit Trust, which is designed to protect the company’s long-term mission and influence major decisions involving artificial intelligence safety.
The reported valuation adjustment highlights the challenge facing major artificial intelligence companies seeking public market funding as investors weigh rapid revenue growth against the enormous costs of developing and operating advanced AI systems.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
