Anthropic is exploring the possibility of allocating between 15% and 20% of its IPO shares to retail investors, according to sources who spoke with Bloomberg on Wednesday, 28 October. JPMorgan will manage the retail portion of the offering in the United States. The company's S-1 filing reveals $120.5 billion in planned spending with SpaceX's compute unit and demonstrates a gross margin of approximately 85%.

Meanwhile, Senator Elizabeth Warren has instructed Anthropic to provide responses to questions about AI risk by 3 November. The prospectus itself indicates that underwriting banks may allocate shares to their online brokerage customers. SpaceX reserved roughly 20% for retail investors during its June listing, having initially planned to set aside 30%.

Individual money is less sensitive to price, and a book that leans on it lets the banks price the deal higher than institutions alone would support

Harrison Rolfes, senior research analyst at PitchBook

Warren seeks clarity on existential risk

The Massachusetts senator delivered a four-page letter to Anthropic's chief executive Dario Amodei on Tuesday, demanding answers before 3 November. According to The Wall Street Journal, which obtained a copy, Warren posed questions regarding how Anthropic will prevent its technology from becoming an existential threat to humanity. She also inquired about the company's relationships with Amazon and Broadcom, and how it justifies a potential valuation approaching $2 trillion.

The risks "demand greater scrutiny before they become intertwined with the public capital markets,"

Senator Elizabeth Warren

Risk disclosures in the filing

Anthropic's prospectus acknowledges both internal and external concerns about the trajectory of advanced artificial intelligence. The document also warns that the company could face political opposition.

Sufficiently advanced AI systems "could, if not developed, deployed, and operated with appropriate safeguards, oversight, and security measures, pose catastrophic or existential risks to humanity,"

Anthropic's S-1 filing

The filing references proposed legislation that would allow the US government to nationalize or mandate the shutdown of frontier AI systems. Anthropic acknowledges that the regulatory framework it advocates for could constrain its expansion. Government contracts currently represent approximately 1% of its revenue.

The prospectus also quantifies the opportunity before the company. Anthropic estimates the global knowledge work market at more than $40 trillion in 2025, exceeding SpaceX's $28.5 trillion market assessment.

Expanding compute commitments

Beyond previously disclosed arrangements with Google, Amazon, Microsoft and Broadcom, Anthropic has committed to spending up to $120.5 billion with SpaceXAI, the SpaceX unit previously called xAI. This translates to roughly $3.1 billion monthly beginning in December. The agreement permits either party to terminate with 90 days' notice after early 2027.

The company has also entered into agreements with Nscale for up to $44.6 billion and with Lambda for approximately $41.3 billion. For 2028 through 2031, Anthropic anticipates spending $125 billion to $150 billion on additional TPU chip capacity, which falls outside its formal commitments table. Since 30 June, the company has signed deals representing a minimum of $245 billion in payments, though the complete total remains undisclosed. The Wall Street Journal had previously reported that Anthropic could allocate $750 billion toward compute infrastructure.

Profitability and revenue concentration

During the first half of the year, Anthropic incurred $2.38 billion in cost of revenue, primarily from compute serving customers, against $16.3 billion in total revenue. This produces a gross margin of roughly 85%, a metric that Semafor identified as central to understanding Anthropic's business model, citing The Information. Training costs are excluded from this calculation. Total compute expenditure reached $8.95 billion.

We do not expect our revenue will continue to grow at comparable rates, and we cannot assure you that it will continue to grow at all,

Anthropic's S-1 filing

Margins face pressure as new compute capacity comes online before generating corresponding revenue. Models released in the six months ending 30 September accounted for more than 80% of third-quarter revenue.

Cloud marketplace sales through Amazon, Google and Microsoft represented 48% of first-half revenue, up from 11% in 2023. Google holds an option to purchase up to $10 billion of stock at the IPO price. Anthropic values Amazon's convertible notes at $108.6 billion, while Amazon values them at $97.9 billion, according to Equibles Research.

Insider lockup periods

Certain shares become available for sale starting on the first trading day. However, co-founders and shareholders holding more than 0.5% must wait until after third-quarter 2027 results are released, or 365 days, whichever comes later. Most other shareholders face a 180-day restriction, expiring after first-quarter 2027 results.

Source: The Next Web