Anthropic’s anticipated $2tn IPO

0:02Good morning from the Financial Times. Today is Thursday, August 13th, and this is your FT News briefing. Investors think Anthropik's public listing will be the biggest ever. Plus, more Iranians are using buy now, pay later plans because of the war. I'm Sonia Hudson in for Mark Filipino, and here's the news you need to start your day.

0:37Anthropic investors think the AI startup will hit the public market at a valuation of at least $2 trillion. That would make it the largest ever initial public offering. The company is expected to float in October. If this sounds a bit like deja vu, you're right. SpaceX broke the record for largest IPO earlier this year at$1.77 trillion. Here to tell us more about this potentially record-smashing year for IPOs is the FT's George Hammond. He covers venture capital from San Francisco. Hi, George. Hey. So why are investors so confident about Anthropic? So you mentioned SpaceX and that being the largest IPO of all time.

1:22We're expecting Anthropic to surpass that. And its investors think that's going to happen because it has shown just this prodigious growth over the last year or really 18 months. It has, in the course of that, leapfrogged its main rival, OpenAI. That makes Anthropic the fastest growing startup of all time. So investors are looking at those numbers and they also are looking at the opportunity that is associated with AI. And Anthropic has really demonstrated this year that it can capitalize on that opportunity perhaps more effectively than some of its rivals. And it has really done that by focusing on selling AI to businesses, which has been a growing theme throughout this year.

2:02But, you know, in addition to all of Anthropic's success, there's also been a lot of challenges facing the AI sector lately. I mean, we just had that big sell-off last month. Tell me about some of what Anthropic is up against. Well, I think in the context of the market more generally, we have been writing for the last year or more that, you know, there are fears around a bubble forming in this sector. So there are also risks in rising competition from Chinese models, particularly open weight models, which are far cheaper. And despite the complications of engaging with Chinese companies, are more attractive to a lot of businesses.

2:42Anthropic is also in a kind of protracted fight with bits of the Trump administration and the US government. They were hit with an export control by the Commerce Department in June, which forced them to suspend some of their best models. So there are plenty of risks ahead of this IPO. What does Anthropic have to say about all this? So Anthropic entered a quiet period when they filed paperwork to the SEC a couple of months ago. And that means that they are certainly not making public pronouncements on this. And for the investors we've spoken to, they are not guiding them on a firm figure on valuation.

3:17This$2 trillion figure that investors have alighted on comes from their own calculations, their own expectations, and obviously very well-informed opinion, but this is not coming directly from the company. Now, I mentioned earlier that if Anthropic does debut at$2 trillion, it would be the second record-breaking IPO that we've seen just this year. What does that tell you about where the market's at right now? I think it tells us that investors see, you know, just a kind of unlimited upside to AI. we will find out whether they are correct or not but the spacex story you know we think of this company as a rocket maker that is its primary business but musk went out and sold it as an ai company so that was an ai story i think you know anthropic's willingness to go out even something approaching this valuation would tell us that investor sentiment around ai continues to be very very hot even if we have seen these these kind of yo-yos in the public markets or in stocks exposed to AI in the last few months.

4:22George Hammond is the FT's venture capital correspondent in San Francisco. Thanks, George. Thank you so much.

4:34U.S. inflation fell slightly in July as gas prices dropped. That's despite the ongoing U.S.-Iran war that's affecting energy supplies. Yesterday's Consumer Price Index report put annual inflation at 3.4 % in July. That's just a bit under June's figure, 3.5%. Core inflation, which strips out volatile food and energy costs, also fell. That suggests that underlying price pressures are being contained. Traders had expected the U.S. Federal Reserve to raise interest rates to tame inflation driven by the war. But after yesterday's figure came out, they're no longer fully expecting an increase before the end of the year.

5:26Inflation in Iran, though, is a very different picture. A cost of living crisis is tearing through the country. Year-on-year inflation is over 80 percent and food inflation reached nearly 130 percent last month. With peace talks to end the war at an impasse, families are struggling to afford anything. Even before the war, Iran's economy was under severe pressure from decades of sanctions and policy problems. That's the FT's Bida Ghafari. She lives in Tehran. And 2026 has been particularly bad. Many families say they run out of money halfway through the month. Prices have gone up so much that every time I go grocery shopping for my daily essentials, I keep checking the receipt to make sure it's actually correct, wondering every time if the cashier made a mistake.

6:20The soaring prices mean Iranian businesses are losing more and more customers. And so Beda says they're resorting to different tactics in order to stay afloat. Billboards have us prong up all over Tehran, encouraging people to buy everything from groceries and cosmetics to plane tickets and even gold on credit. Bida's referring to buy now, pay later schemes. You buy a product immediately, but pay it off in installments. It's not a new concept in Iran, but it's becoming a lot more common as inflation gets worse. The value of the Iranian real continues to plummet too. And that makes people poorer even if their wages rise.

7:05It's interesting. Many people say there was a time when installment buying was limited to cars, seaside villas, and expensive appliances. But everyone's now surprised to see how it has expanded into pretty much everything. For a lot of businesses, this is one of the only ways to boost sales in an economy where people are increasingly short on cash. Buy now, pay later is ideal for Iranian customers, but for many businesses, it's barely enough to get by. Some installment plans do not even charge additional fees or interest, and in a high inflation environment, that means the value of money will erode over the course of several months, which shows how desperate some businesses are to boost their sales.

7:51Essentially, offering buy now, pay later without fees means that the seller ultimately gets back less money because the value of the currency keeps declining as more payments are due. Now, this new sales tactic is the latest sign of the war's deepening ripple effects. The U.S. has been trying to pile economic pressure onto Iran to force it to concede. But the Iranian regime is adamant that tactic won't work. Officials have acknowledged the rising cost of living. President Pezashkian himself said in recent days that people's livelihoods and economic conditions is his number one priority. But at the same time...

8:36Iran's leaders are basically hoping that they can endure the pain from the war longer than the U.S. For a long time, the Islamic Republic has been working on the so-called resistance economy. And the idea is to rely more on domestic resources. to survive sanctions and conflict. In fact, Beda says the Iranian regime thinks if it waits long enough, it can flip the script on the U.S. So even though Washington has been seeking to squeeze Iran economically, Iran's leaders believe that if the Strait of Hormuz stays closed and energy prices keep rising around the world, then the pressure could eventually turn against Trump and force him to give in.

9:19But as that waiting game plays out, Iranian families and businesses are paying the price. That's the FT's Bida Ghafari reporting from Tehran.

9:34Before we go, a quick reminder that you might have an FT subscription and not even know it. That's because thousands of organizations and universities have access for their employees. You can find out if you're eligible using our subscription finder. We've got a link to that in the show notes, along with all the other stories we mentioned in today's episode. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.