Anthropic's Growth Slows and Investors Cut IPO Target to $1.5 Trillion

Anthropic told investors last week that its quarterly revenue rose 45% to $16.8 billion, up from $11.6 billion in the previous quarter — and some of them responded by cutting their target valuation for the company's IPO from $2 trillion to $1.5 trillion, Reuters reports.

That arithmetic tells the story of the moment for AI investors. Revenue is still climbing at extraordinary speed, but the growth rate itself is decelerating. Anthropic's revenue had jumped nearly 60% between the first and second quarters, from $4.7 billion to $11.6 billion, according to figures the company shared with current and prospective investors on Wednesday, October 14, as CNBC first reported.

For context on the scale: that single first quarter of $4.7 billion beat the entirety of 2025, when Anthropic booked $4.6 billion in revenue — itself up from just $386 million in 2024, according to Morningstar.

Why is a 45% quarterly jump spooking investors?

Because stocks were priced for faster. "Investor expectations had been getting increasingly optimistic and hoping for 'fast growth and getting faster.' Now it's just 'fast,'" says Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute. "AI companies are still growing quickly, but not at the eye-popping pace investors had come to expect—and stocks were priced for that pace to continue."

The stakes stretch well beyond tech portfolios. "A handful of AI-linked companies have driven much of the stock market's gains recently, so any wobble here can ripple through retirement accounts and index funds broadly, not just tech investors," Samana says.

Adam Coons, chief investment officer and portfolio manager at Winthrop Capital Management, frames the problem in valuation mechanics. "It seems counterintuitive to worry about companies generating billions in revenue, but in financial markets, valuations are driven by the rate of change, not just absolute revenue," Coons says. "Investors aren't paying for today's sales; they're paying for years of hypergrowth to come. When that growth rate slows, even from extraordinary levels, it changes the math behind both the valuations and the debt-financed build-out that depends on them."

What happened to OpenAI's $70 billion revenue figure?

Anthropic is not the only company tripping over its own numbers. At the end of September, sources told Axios that OpenAI's annualized recurring revenue was close to $70 billion. On October 8, Axios reported the company had cut that figure by $20 billion. The publication attributed the gap to the idiosyncratic ways AI companies count sales; OpenAI reportedly wanted a direct comparison with Anthropic.

There's a deeper issue with the metric itself. Annualized recurring revenue is a forecast, not a fact — a Silicon Valley favorite that can prove inaccurate. Investors can't lean on it alone as a growth signal.

Is competition compressing growth?

Samana and Coons both point to intensifying competition as a brake on revenue. "Competition is driving prices down," Samana says. "More AI companies are competing for customers, so even as more people use AI, the money each company makes per customer is shrinking."

Coons widens the lens to the model market itself. "With open-source models such as Meta's Llama and a wave of Chinese models closing the capability gap, and OpenAI, Anthropic, and Google competing aggressively on price, the cost of digital intelligence is falling fast," he says. "When models converge in capability, pricing power evaporates, and revenue growth and margins can shrink at the same time."

What do Anthropic's prospectus numbers show?

The deceleration is only part of the financial picture. Anthropic filed its initial IPO paperwork with the Securities and Exchange Commission in June and has since pushed the offering from October to November — a delay that left room to share the latest quarterly results.

The prospectus, viewed by Reuters, contains some stark figures:

• Operating loss widened from $2.98 billion in 2024 to $8.06 billion in 2025.
• Total operating expenses hit $12.65 billion in 2025, including $7.33 billion on computing and infrastructure — triple the prior year's spend.
• Net loss reached $42 billion in 2025, up from just over $8 billion in 2024; $34 billion of it stemmed from an accounting charge.
• The company planned to warn investors in the filing that AI could pose "catastrophic or existential risks to humanity."

A week after those numbers surfaced, New Constructs, an independent research technology firm, branded Anthropic's IPO "an unprecedented test of investor gullibility" and told investors to avoid it, citing "gargantuan risks" including the rising net losses.

The debt behind the build-out amplifies every percentage point of lost momentum. "These companies bet big—with borrowed money," Samana says. "Many committed to massive spending on chips and data centers, assuming growth would stay sky-high. Slower growth makes those bets riskier."

The November IPO window will now serve as the market's first real-time test of that thesis — and of what a $1.5 trillion price tag does to the math on $42 billion in annual losses.

By Amara Osei