Ahead Of IPO, Top Valuation Guru Says Anthropic's Share Voting Structure Would 'Put Kim Jong Un To Shame'

Anthropic IPO: Aswath Damodaran, corporate finance expert and Professor of Finance at New York University's Stern School of Business, has valued artificial intelligence (AI) company Anthropic at $1.475 trillion, slightly below the lower end of its reported IPO pricing range of $1.5 trillion to $2 trillion. His assessment offers a reality check for investors eager to get a piece of the AI boom.He has also cautioned investors comparing Anthropic's share voting structure with Kim Jong Un's dictatorial authority. "As an potential investor in Anthropic, keep in mind its status as a public benefit corporation, with you as one of many stakeholders, and a share voting structure that would put Kim Jong Un to shame in entrenching founders. It may or may not be a deal breaker, but for me, it is a value discounter," wrote Damodaran in a post on X.Importantly, Damodaran has also flagged the enormous cost of computing infrastructure, intensifying competition and the risks associated with Anthropic's corporate governance structure. In a blog published on October 28, titled "The Anthropic Prospectus Arrives: My (but not the) IPO valuation!", Damodaran said the company's future would depend on whether its rapid growth can translate into sustained profits. "Investors should look beyond the excitement surrounding AI and work out what the business could realistically earn in the years ahead," wrote Damodaran in his blog.Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better PayAnthropic IPO: Why Damodaran Sees A Valuation GapDamodaran says his valuation is based on an optimistic scenario. He expects Anthropic's annual revenue to approach $1 trillion by 2036, with an operating profit margin of 27.5 per cent after accounting for the likely impact of regulation.Even under these assumptions, his estimated equity value of $1.475 trillion falls below the reported IPO pricing range. The difference suggests that investors paying more would need to believe the company can grow faster, earn higher margins or achieve both.Damodaran believes the market for AI products and services could eventually exceed $5 trillion. Anthropic, the company behind the Claude family of AI models, is well positioned to compete in the premium segment, where businesses pay for more powerful systems.He also sees potential beyond selling AI tools. Anthropic has signalled ambitions to enter industries being disrupted by its technology, including pharmaceuticals, where AI agents could help with drug research and testing.However, Damodaran cautioned against treating such possibilities as guaranteed outcomes. "The value of a business lies in your expectations for the future," he wrote.Revenue Is Surging, But Risks RemainAnthropic's financial disclosures show impressive growth. Revenue in the first two quarters of 2026 was about 14 times the level recorded in the corresponding period last year, according to Damodaran's analysis of its prospectus.The company also increased the number of enterprise customers spending more than $1 million annually on Claude to 1,900, from fewer than 100 a year earlier. However, its growth rate slowed in the third quarter, with competition from OpenAI, limits on computing capacity and cheaper open-source alternatives weighing on its prospects.Profitability remains another concern. Anthropic reported an operating loss of more than $8 billion for the first half of 2026 after adjustments for non-cash and one-time charges. Although the company said it recorded an operating profit in the latest quarter, Damodaran believes it still needs substantial growth to cover future costs.Those costs could be enormous. Anthropic has disclosed more than $600 billion in computing-related commitments, reflecting the infrastructure needed to develop and run increasingly powerful AI models.Such commitments can help secure computing capacity but also leave the company with large expenses even if revenue growth disappoints.Damodaran summed up the uncertainty with a striking comparison: "This prospectus, at least in my view, is analogous to reviewing a report card for a kindergartner (a precocious and talented one perhaps, but still a kindergartner) and trying to determine how much, if any, to set into that child's college fund," he wrote in his post.Shareholders May Have Limited ControlDamodaran also raised concerns about Anthropic's governance arrangements. The company has five classes of shares with different voting rights, while a benefit trust and the founders' voting power could limit the influence of public shareholders.He argued that investors must consider not only how much a company is worth but also how much say they will have in how it is run.For investors tempted by the AI opportunity, Damodaran recommends testing whether their assumptions are merely possible, genuinely plausible or probable. He said he would wait for Anthropic's IPO pricing and sit out the excitement if the valuation substantially exceeds his estimate. His warning is not that Anthropic cannot become enormously valuable, but that a promising business can still be an expensive investment if its shares are priced too optimistically.