3 hours ago - Technology
Why Anthropic and OpenAI want to go public
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Illustration: Brendan Lynch/Axios
There's been a lot written about how both Anthropic and OpenAI want to go public later this year, with each hoping to beat the other to market.
- What's been discussed less is the why.
The big picture: Tech is still in its "stay private longer" era, as best exemplified by teenaged companies like Stripe that routinely raise new funding to provide liquidity for employees and other shareholders.
- Need primary capital? It's available, particularly thanks to the influx of Middle Eastern sovereigns.
- Need secondary capital? That's available too, thus removing the other big reason companies go public.
- To date, both Anthropic and OpenAI have followed this playbook.
Zoom in: The biggest issue going forward are scale and supersonic growth.
- We're not talking about unicorns here. Or dragons or whatever you want to call $100 billion "startups."
- Anthropic and OpenAI both expect to be worth trillions — note both the "t" and the "s" — thanks to revenue run rates (and employee payrolls) that seem to double with the changing of the seasons.
- Private market liquidity is deep, but it's not bottomless.
State of play: To be clear, neither frontier lab needs to go public immediately.
- They have tons of cash to fund their GPU shopping sprees and, as we noted on Wednesday, can even tap retail investors without a ticker symbol.
- Moreover, both companies have enough currency to make chunky acquisitions. Just yesterday, Anthropic reportedly paid around $400 million for Coefficient Bio, which is developing AI models for biological research, while OpenAI paid "low hundreds of millions" for tech talk show TBPN.
The bottom line: Some things are too big to be kept in a private box.
