@ryanallisCEO, Lounge.ai & SaasRise
Are you going to buy the Anthropic IPO?
With open weight models catching up to frontier models and there being a major privacy and cost benefit to using your own internal model, I'm guessing that Anthropic's revenue won't be able to grow that much more post IPO. I'm definitely not a buyer at a $2T valuation. Your thoughts?
I wouldn't be surprised if their rate of revenue growth drops dramatically in the next 24 years as large enterprises bring their models and harnesses in-house.
Comments2
I'm not sure the valuation adds up either. We've seen similar situations before where companies attracted enormous valuations based on expectations of future growth.
Consider Cisco during the dot-com bubble. It was a successful company in a rapidly growing industry, yet investors who bought near its 2000 peak experienced years of disappointing returns. Rivian went public in 2021 and briefly exceeded a $100 billion valuation despite limited production. WeWork was once valued at $47 billion before its IPO collapsed and the company eventually filed for bankruptcy.
I'm not suggesting Anthropic will follow the same path. Its revenue growth is impressive, and it has a legitimate enterprise business. However, at a potential $2 trillion valuation, investors are pricing in extraordinary future performance.
With open-weight models improving, enterprises bringing AI infrastructure in-house, and the enormous computational costs associated with frontier models, I question whether that level of growth and profitability is sustainable.
History has shown us that being a leader in a transformative technology doesn't necessarily translate into strong investment returns, especially when the initial valuation already assumes near-perfect execution.
Spot on regarding the valuation pressure. Global giants like Anthropic will always anchor baseline infrastructure, but justifying a $2T valuation gets tough when core intelligence becomes commoditized.
It’s just like the food industry:
Mass infrastructure provides basic caloric intake—huge volume, but shrinking margins over time. Specialized nutrition (like targeted athletic performance compounds) operates on lower total volume, but commands significantly higher margins because it guarantees precise, high-stakes outcomes.
Anthropic’s top-line revenue growth will inevitably slow down if they rely solely on API consumption. Massive volume with declining margins won't sustain a $2T multiplier. The real long-term enterprise value is shifting from selling raw "calories" to specialized, sovereign architectures tailored for deep operational integration.
2 comments
I'm not sure the valuation adds up either. We've seen similar situations before where companies attracted enormous valuations based on expectations of future growth.
Consider Cisco during the dot-com bubble. It was a successful company in a rapidly growing industry, yet investors who bought near its 2000 peak experienced years of disappointing returns. Rivian went public in 2021 and briefly exceeded a $100 billion valuation despite limited production. WeWork was once valued at $47 billion before its IPO collapsed and the company eventually filed for bankruptcy.
I'm not suggesting Anthropic will follow the same path. Its revenue growth is impressive, and it has a legitimate enterprise business. However, at a potential $2 trillion valuation, investors are pricing in extraordinary future performance.
With open-weight models improving, enterprises bringing AI infrastructure in-house, and the enormous computational costs associated with frontier models, I question whether that level of growth and profitability is sustainable.
History has shown us that being a leader in a transformative technology doesn't necessarily translate into strong investment returns, especially when the initial valuation already assumes near-perfect execution.
Spot on regarding the valuation pressure. Global giants like Anthropic will always anchor baseline infrastructure, but justifying a $2T valuation gets tough when core intelligence becomes commoditized.
It’s just like the food industry:
Mass infrastructure provides basic caloric intake—huge volume, but shrinking margins over time. Specialized nutrition (like targeted athletic performance compounds) operates on lower total volume, but commands significantly higher margins because it guarantees precise, high-stakes outcomes.
Anthropic’s top-line revenue growth will inevitably slow down if they rely solely on API consumption. Massive volume with declining margins won't sustain a $2T multiplier. The real long-term enterprise value is shifting from selling raw "calories" to specialized, sovereign architectures tailored for deep operational integration.