@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.
Comments1
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.
1 comment
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.