Anthropic IPO valuation drops to $1.5 trillion as AI Bubble Index climbs

Anthropic's initial public offering is expected to proceed at a significantly reduced valuation of approximately $1.5 trillion, down from the $2 trillion target, amid growing turmoil in the artificial intelligence sector. The lower valuation reflects investor concerns about a potential AI bubble and broader market corrections. The AI sector has experienced widespread declines, with major stocks like Nvidia, AMD, CoreWeave, and IREN falling into correction territory. Anthropic's S1 filing revealed strong revenue growth of $17 billion in the third quarter, but also showed substantial risks, including $23 billion in quarterly losses, heavy reliance on a few major customers, and billions in computing commitments that delay positive free cash flow. The AI Stock Bubble Index has risen to 74, with analysts like Ray Dalio and Ken Griffin warning of a potential collapse. Recent high-profile IPOs, including SpaceX and CoreWeave, have performed poorly after their debuts, fueling fears that Anthropic's stock may also decline post-listing.