Chamath Palihapitiya says Anthropic should accept a lower valuation to raise at least $200 billion and survive a correction
Chamath says Anthropic should sacrifice valuation to raise at least $200 billion, because even that barely buys the compute needed to survive a correction “Here’s my very specific thing about why I think they should price it to clear the market for $200 billion—and I’m specific about that number. They need, in my estimate, at least $200 billion. If you want to be super safe, a quarter-trillion gets the job done. “What does the price need to be to attract that incremental dollar off the sidelines? Can they raise $80 billion in an IPO at $1.7, $1.8 or $1.9 trillion? I think so, handily. Can they raise $100 billion? Maybe it’s pushing it. At $150 billion, I think you need to be back down to $1.5 trillion.” JCal: “You’re saying you want them to raise more money at a lower valuation so they have a war chest.” Chamath: “$150 billion at $1.5 trillion is not enough. $200 billion barely gets them a few gigawatts. That is the bottom-line math if Anthropic is going to go through and survive an eventual correction. “I think it’s much better for them to have $200 billion to $250 billion today than to try to ring the bell at $1.9 or $2 trillion for $80 billion, file a mixed shelf—which takes about six months—and hope the markets are in line. “I just think there’s more risk in the future than there is today. Why take the risk? Price it to clear the market.”
Context
Anthropic's IPO size and price will set the tone for AI financing, and Chamath argues the bigger risk is raising too little while markets are open.
This is secondhand: Fireside Alpha is clipping Chamath's comments on the All In podcast, and the figures are his own estimates and opinion. Anthropic has not said how much it plans to raise or at what valuation.
Deep dive
On October 16, Fireside Alpha posted a clip of Chamath Palihapitiya from the All In podcast episode whose topics included Anthropic's IPO, its valuation and how much it should raise.
Chamath says Anthropic should price its raise to clear the market for $200 billion, and that in his estimate it needs at least that much, with a quarter trillion being super safe. He says he thinks Anthropic could handily raise $80 billion in an IPO at $1.7 to $1.9 trillion, that $100 billion may be pushing it, and that $150 billion would need a valuation back down near $1.5 trillion.
When cohost Jason Calacanis sums up the idea as raising more at a lower valuation for a war chest, Chamath says $150 billion at $1.5 trillion is not enough, and that $200 billion barely gets Anthropic a few gigawatts of compute. He says that is the math if Anthropic is going to survive an eventual correction.
He argues it is better to raise $200 billion to $250 billion now than to seek $80 billion at around $2 trillion, file a mixed shelf that takes about six months, and hope markets cooperate, because he sees more risk in the future than today.
The same day, other stories in this deck covered a call to pause Anthropic's IPO and a report on its credit rating ahead of chip financing.
What to expect next
Watch for Anthropic's IPO filing, which would reveal the actual raise size and valuation range and show whether it leans toward Chamath's larger, cheaper offering.
Also watch Anthropic's debt deals for chips, since heavy borrowing is the alternative to raising more equity, and whether other investors echo the view that AI labs should raise as much as possible before a possible correction.