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Welcome back! It’s Valida.
If you want proof of the widening gap in sentiment between public and private investors, take a look at the valuations of Anthropic and OpenAI.
On Tuesday, Anthropic disclosed it was targeting a valuation of between $1.26 trillion and $1.4 trillion in its upcoming initial public offering. The prospectus update comes on the heels of OpenAI’s most recent fundraising, which valued the company at $1.25 trillion.
That means Anthropic expects public investors to value it at only 12% more than OpenAI, assuming it achieves the valuation at the high end of its range. That is in spite of the fact that Anthropic generated 70% revenue than OpenAI in the third quarter and has been growing far faster for much of this year.
Still, Anthropic’s advisers may be guiding the valuation downward now to make sure there’s plenty of demand for the stock on the first day of trading. There’s a good chance Anthropic can increase the IPO price or sell even more shares if investors’ demand is strong, as some Anthropic investors are expecting.
As I reported today, OpenAI told investors it had generated $10 billion in third quarter revenue, up nearly 50% from the second. Increased use of Codex and demand for image models helped growth rebound from a sluggish second quarter.
Still, OpenAI trails Anthropic, whose third quarter revenue neared $17 billion in the third quarter, up 47% from the second. Of course there are important differences in how each company reports revenue generated from sales of their AI through cloud partners—but not enough to make up for the sales gap. And Anthropic looks like it’s held onto its lead in the current quarter.
Anthropic’s annualized revenue pace—roughly its last 28 days time 13—hit $81 billion in October, up nearly six times the comparable figure in February. OpenAI’s annualized revenue was nearing $50 billion in September, double its February pace. (Its October pace couldn’t be learned.)
Anthropic is also a more efficient business compared to OpenAI. As revenue picked up steam in the third quarter, OpenAI operating losses rose to $10.9 billion, slightly up from $10.1 billion in the second quarter, said a person familiar with the matter.
Anthropic also reported an operating loss, but a far smaller one. It swung to a $567 million loss in the third quarter, mostly due to costs to secure short-term computing capacity and $2 billion to match donations made by employees.
Public investors have been notably skittish about tech stocks, sending the Nasdaq Composite last month to its worst month since March 2025 on concerns about the returns on AI investments. Those jitters grew after the Democratic sweep in Congress made it likely that more AI data centers will face delays.
That cautiousness doesn’t seem to have spilled over in a big way to private markets yet, as Morgan Stanley tech banker Diana Doyle reminded me last month.
The real referendum on whether public and private markets are converging will happen in the next few months, after Anthropic lists its shares and while OpenAI fills out the second, $9 billion installment of its fundraise. Just on fundamentals, the fastest growing company should sport the highest revenue multiple. But private investors have been known to inject a bit more hope into their valuations than public shareholders—suggesting this gap could hold.
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