Anthropic IPO is make or break for the technology industry

Between rising interest rates, a nationwide AI backlash, a major political shift in Washington, D.C., and the sudden ouster of Nvidia CEO Jensen Huang, the tech industry is under mounting strain.

Now comes the most important tech IPO in years, and a defining event for the burgeoning but still young artificial intelligence market.

With Anthropic expected to debut on the Nasdaq on Thursday, the stakes are sky-high for almost every major tech company. Advanced Micro Devices, Broadcom, Google, Micron, Microsoft, Nvidia and Taiwan Semiconductor Manufacturing Company are collectively investing $26 billion at the IPO price, which is currently expected at $70 to $78 a share. Some of those companies are existing investors, as is early backer Amazon, whose stake could be in the hundreds of billions of dollars.

In addition to all the cash on the line, tech giants also need Anthropic’s spending for many years to come. The Claude creator and its top rival, OpenAI, are driving an outsized amount of the AI buildout, and are burning historic amounts of money in the process.

Anthropic has outstanding spending commitments of over $900 billion, according to its latest prospectus. It’s on the hook to spend at least $110 billion with Amazon over the course of a decade, and another $400 billion with other companies for cloud capacity, according to filings and partner disclosures. The lab also made $300 billion in commitments with data center and chip partners. Anthropic intends to lay out $125 billion to $150 billion for AI chips from Google, though delivery won’t start until 2028.

“The numbers are just staggering,” Joe Fath, a partner at venture firm Eclipse and former T. Rowe Price portfolio manager, said in an interview. “It’s hard to get your head wrapped around it.”

Cloud partners Amazon, Google and Microsoft account for 31% of contractual obligations, Anthropic said in its prospectus. Last year, Amazon built an Indiana data center just for Anthropic, using custom chips.

By going public now, Anthropic can raise a large portion of the money it needs to pay for the technology and infrastructure required for building and hosting its frontier models and expanding portfolio of services. The company recorded a net loss of $104 billion through the first nine months of 2026. The IPO could yield over $90 billion in proceeds, on top of Anthropic’s $132 billion in existing cash, including short-term investments.

The length of Anthropic’s contracts is also unique. Typically such contracts last five years or less, while Anthropic’s agreement with Amazon extends for twice that amount of time.

“Realistically, anything past three to four years, you’re basically throwing darts in the dark,” said Corey Quinn, chief cloud economist at spend management software vendor Duckbill. “It is almost a certainty that it will be renegotiated long before the culmination of that contract.”

Meanwhile, a data center for Anthropic that starts leasing in 2027 has a 20-year term. For both space and computing, Anthropic is splurging now so it doesn’t end up short on capacity long into the future.

“In the past, we have significantly underestimated our compute requirements, which left us capacity constrained and impacted both product development and deployment,” Anthropic said in the prospectus.

Anthropic and Amazon didn’t provide a comment.

It’s a tough time for Anthropic to hit the Nasdaq, with the offering coming as tech investors are desperate for some good news. The Nasdaq is down to start November after dropping 5.3% in October, its worst month since March 2025.

Rising interest rates pushed investors out of debt-heavy neoclouds, which have become a critical piece of the infrastructure buildout. And in the midterm elections earlier this month, Democrats won sweeping victories in both houses of Congress and in key gubernatorial races, while dozens of ballot measures were passed that will potentially limit new data center development across the country.

Then came the Nvidia crisis. Shares of the chipmaker at the center of the AI boom tumbled 13% this week to their lowest since July 2025, after Huang’s multiple reported affairs, including one with an alleged Chinese spy, led to his ouster early Thursday. Huang was replaced on an interim basis with CFO Colette Cress, who faces a major test on Tuesday, two days before the Anthropic debut, as Nvidia is set to report quarterly results.

The ongoing Nvidia fallout and the Anthropic IPO create quite the split-screen moment for tech’s heavyweights, which are closely tied to both companies.

Google will be paying particularly close attention.

The company is set to own about 13% of Anthropic after the IPO, and is backstopping the lab’s $19 billion in lease commitments to Terawulf, which will supply data center space in Kentucky. If Anthropic goes insolvent, Google will step in and pay the remaining rent or a termination fee, Terawulf said.

“Everybody knows that Anthropic is going to be the future of Google,” said Subhadeep Chatterjee, a former Google cloud partnerships leader who now advises companies.

Google didn’t provide a comment.

One major impetus for Anthropic to enter costly and long-term guarantees is that OpenAI is being equally aggressive, and capacity is limited, particularly for graphics processing units. Going long can mean locking in rates as the industry confronts questions about whether data center development will slow.

“You will need to be in a rush to get infrastructure, and if you are not going to be there, you will be out of business,” said Eli Mansoor, CEO of OskaQ Consulting, which advises companies on cloud negotiations. “It used to be that prices always go down, but this is changing, especially in the GPU world.”

Big financial firms are lining up to help Anthropic get what it wants. Bank of America, Blackstone, Citigroup and Morgan Stanley have offered $63 billion to buy racks full of Broadcom AI chips that Anthropic will rent. Broadcom has provided a backstop with a maximum liability of $43 billion.

That’s a lot of silicon and a massive bet for a five-year-old company that’s never lived through a technology downturn.

“It’s not a risk-free prospect, but I would call it smart investing,” said David Tollen, founder of Sycamore Legal, where he specializes in IT contracts. “They’re investing, in a sense, in themselves. They’re putting money into something that if it succeeds, they get a piece of the action.”

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