This will also make it even harder to avoid any future IPO being a down round. They’re almost certainly worth much less than Anthropic and Anthropic is, per reports, struggling to keep its valuation much above 1T, and even that may fall through.
Anthropic is way more focused. That helps in a way that builds upon another: their product tends to be better and the people's perception of it as well.
But "much less"? OpenAI needs a month or two of good choices, progress & announcements, and that flips. On the other hand, Deepseek could blow both out of the water unexpectedly, ending the argument about who has the superior tech.
There's also the Elon factor. Anthropic has a good relationship with Elon (to the point where he discounted the compute sold to them by quite a lot) while OpenAI/Sama is the devil to him.
How could anything be bigger than Super Intelligence? Which is supposed to be the next step after AGI, which we presumably already have?
I'm tired boss...
Meh. We both do and don't have AGI, because everyone before ChatGPT thought it was obvious what it meant and it turned out we all disagreed with each other about that obvious meaning. We can't even all agree about the "artificial" part, which is the most surprising part to me, let alone "general" or "intelligence".
I think arguments for either direction are valid. On one hand, MCPs are essentially APIs used by developers. Developers will demand some form of open reusable standard, "MCP gateways" or hosts will spring up to host them, hyperscaleres will offer them, and ultimately it will be another cloud commodity.
On the other hand, some of the target users of MCPs is the consumer market rather than the developer market. An App Store model makes sense there and the provider/platform can collect the lucrative 30% cut and end consumers’ numbers makes for massive revenue opportunity. This dictates a walled garden "Agent" like Muse or Instant.
If #1 is the direction the market goes in, then more batteries-included solutions like Muse or Hermes become the next obvious step up the chain. If #2 wins, then yes having your MCP available to on a Muse App Store that Meta takes a cut of some sort would be larger.
But they are still not likely to be investment-grade at IPO.
Without them they have best coding/other(e.g. most accountants prefer claude) model on the market, with solid increasing revenue channels and loyal customer base.
Does it mean something or is it a new buzzword. I am seeing this everywhere and the traditional meaning applied to bonds doesn't apply here.
Blackstone think that post-IPO Anthropic will start out with a junk credit rating.
FT seemingly covered it too if you can see it (I can’t):
https://www.ft.com/content/59383c7f-8d82-493f-bf01-d2e862a10...
Their recent "intelligent ui" (forget what they call it), which turns the chat almost into a magazine is amazing for people when they start doing measuring or responses comeback as little graphs or diagrams showing this or that.
Claude is still not able to generate pixel images.
I agree Claude is better for the likes of you and I, but I see the opposite in non-technical people which is most people
Also Google will eat them eventually in mass market part as well.
Devs and the token-consuming services they create are probably a more valuable market than the entirety of the glorified search engine use cases that the average consumer is focused on
they will easily generate Ads and shopping recommendations revenue challenging Google's 300B/y Ads empire.
Noone will sell them tokens, they will be shepherded into buying stuff (like now with ads, just better).
The alternative are fewer but a lot more high value contracts.
I wonder what came of the Jony Ive acquisition that was supposed to yield a physical product
This is tantamount to saying that the value proposition is unknown, if a supposed trillion dollar company could get upended overnight by a startup
Where's the moat, the unassailable first mover advantage, the enterprise lock intengrations that mean nobody could realistically move you out of the way even if they had slightly better tech ? If none of these exist, investors should be scared.
The Elon association could be a long-term negative.
It certainly didn't help the Republicans in this last election even with Elon donating half a billion dollars to them (post 2024 Elon appears to be, like AIPAC, more of a toxic association than any amount of money gained can overcome), and there are reasons to believe that flip on the political side will eventually matter on the business side of things.
Elon's Texas "home base" just flipped blue in a big way and there are likely to be high profile investigations into whatever it was he was doing with DOGE.
And perhaps most directly important to Anthropic, unless the winds change significantly in terms of the politics surrounding data centers (and I suspect if anything they will get increasingly hostile, not better), I wouldn't be surprised to see the Memphis city council get purged of pro-Colossus members, replaced by anti-data-center candidates when the next elections take place in Oct 2027.
Unless things change considerably, this is less than a 6 month runway.
It's not common for raises to give you this little runway.
You could read into it that they expect to IPO in far less than that amount of time, and this is a short bridge until then.
Interest rates are the big wildcard. If this is the start of a significant rising cycle, akin to 2022/2023, then the AI bubble is toast and all these companies are dead. If the Fed pauses in December/January there may be a window of opportunity in early 2027 and we'll see both OpenAI and Anthropic IPO and possibly jump.
Rising interest rates are a triple whammy to AI companies: 1) risk capital always flees first when rates go up, so the available capital dries up 2) they and their suppliers have borrowed significantly to fund datacenter expansion, so rising rates will directly increase their expenses and 3) AI is considered an investment for their customers, and corporate finance always pulls back on more speculative investments when rates go up, and so their customers will likely pull back and directly shrink their revenue.
Whether they IPO depends on a lot of factors. For example, if we see a market meltdown triggered by data center moratoriums, then neither lab will IPO in 2027 at the very least. And if Anthropic achieves RSI first, there won't be much investor interest in a clearly inferior lab.
But none of these numbers are real. Softbank and MGX are re-arranging the deck chairs between OpenAI and Stargate so the actual new outside money here indicates very weak demand.
This is a press release to try to anchor the valuation but it doesn't seem like a lot of people are buying that.
Of course I have no idea what the technical results would have been if I had just used Opus 5.5 end-to-end, but I'm fairly confident it would have been more expensive given the rates my company pays for each. For that matter I wonder how Kimi3.1 Pro or DeepSeek 4.1 Flash 1017 would have done with various parts of the job. In fact I may try rerunning the whole thing using open weight models next week just out of curiosity.
If Kimi+DeepSeek produce something roughly equivalent, then just from my own personal experience with a novel problem involving legacy in-house code, as opposed to public benchmarks for which I don't have a great handle on how well they correlate with value produced by the models, that will make me question the valuation of both OpenAI and Anthropic.
Then check w/ Opus and Astra for good measure if it really matters. Works well. DSv4.1 is okay but does make mistakes. I run my 2x DGX sparks at 60-70% capacity this way, which nets about $400/mo worth of tokens on $30 of electricity.
I am hoping in the next six months to be able to in-house ALL of the above using a slightly more competent model, or two more sparks. It is slow running local, but it is really fascinating to have all this work done from my desk.
What makes you say this?
All the other products feels like a (desperate?) attempt to create moat and friction for switching models.
If AMD and Nvidia could make the exact same thing the exact same rates, why would the stock price of one be higher than the other?
And in terms of capabilities and pricing they are not *that* different.
So I can't imagine one company being vastly more valuable than the other one (unless their spending or long term strategy is vastly different).
But Anthropic might not actually be worth more that much more than OpenAI: https://news.ycombinator.com/item?id=50394906
Developer sentiment is irrelevant in the eyes of the normies
At the end of the day that’s all that matters
Not sure though. My best guesses about what'll happen to Anthropic have enormous error bars...
Does anyone see the path to ROI here? There is clearly a profitable business model within these big AI labs, but it’s held captive by messianic 90-page IPO risk statements. I know they want to sell restricted access to the more capable models but the market for those kind of professional services doesn’t even exist yet.
Replacing all work where someone sits exclusivly behind a screen.
They’re raising at $1T, which makes them one of the planet’s largest companies and they’ve only been around for a short time, comparatively.
Yes, there was noise about possibly higher valuations still, but the [edit: private] market definitely thinks there is a $1T business model here.
On 31st Oct, the FT was reporting they’d already cut the funding target from $30bn to $20bn and it looks like the couldn’t get close to that even
https://www.ft.com/content/7a3ad950-1b3b-4d9e-8c15-65a61ae61...
Less sarcastically though the bet on how much AI company IPO at attracts a certain type of people. People who may have a certain believe about AI companies which will bias their assumptions quite a bit.
OpenAI will be just fine, they are building superintelligence. I think these comments will be pretty funny in a few years. This is the best wealth building opportunity of my generation.
This has nothing to to with the recent EO, it has been known for some time that the labs are racing towards ASI.
Because this is not a topic you're familiar with, I would recommend some light reading on it before returning to the topic and commenting on it with such confidence.
A good starting point would be reading some of the perspectives of some of the people that built the modern LLM. I promise you they understand the technology and its potential better than you, and were discussing these things well before it was even a concept in your mind.
Edit: sneaky edit bud. The term existing for a while doesn’t make the uptick in use of said term since the EO, right before trillion+ IPOs, to describe what the frontier labs are building, less of a “funny” coincidence. The people you tell me I should listen to standing to make big bucks on me believing them makes it, at the very least, ever so slightly suspicious.
There are no serious people left who believe this anymore
>>Less sarcastically though the bet on how much AI company IPO at attracts a certain type of people. People who may have a certain believe about AI companies which will bias their assumptions quite a bit.
Yeah but there is also someone on the other side.
But this number isn't a matter of market volume, is it?
It's a matter of what analysts, regulators, banks, and investors choose.
And they appear to not be that keen on a valuation that high, judging by the press.
In quite a lot of sectors, gambling on a prediction market for an outcome you can influence is frowned upon, unethical, even illegal.
To be clear, I am talking about the investment analysts who have a role in setting the IPO price, which is a (then-private) decision, not an outcome of a market. It would almost certainly be a crime for the analysts involved in pricing an IPO to make prediction market bets.
Polymarket has it at ~50% that their IPO value is between 1.25T and 1.5T. Do you think that is representative of reality? It's not like we get to flip the IPO coin ten times.
Sure, the price is the weighted average of expectations. People take either side for many reasons though. There would still be a lot of training in a perfectly efficient market because people and institutions have their own utility of money functions and other reasons to take bets (hedging their vesting stock for example).
>>. I'd look at a prediction and say "well obviously the favored side is going to win" and put all my money there, over and over again, until I was the richest mortal in the universe.
>>Polymarket has it at ~50% that their IPO value is between 1.25T and 1.5T. Do you think that is representative of reality? It's not like we get to flip the IPO coin ten times.
Yeah, it's the best guess we have.
>> It's not like we get to flip the IPO coin ten times.
That's very limited frequentist perspective. Just because you can't re-run the experiment doesn't mean you can't assign probabilities to events.
One time events have no probability, they happened exactly as they happened and no outer outcome can be assigned probability besides 0