Ironically, this storm originated in Silicon Valley itself.
Those closed-source giants have spent the past few months relentlessly hyping the threat of AI: AI is dangerous, it will destroy humanity, so we need to set up agencies to regulate it—now.
Now they’ve gotten exactly what they wanted.
But the way things have unfolded to this point gives you the feeling that:
The ads for porn DVDs were so loud they brought out the anti-porn campaigners.
So, can Anthropic still go public on schedule?
The answer is yes—it will proceed as planned.
Delaying would be tantamount to admitting outright that the bubble has burst.
No one dares own those words.
First of all, the bill will surely amount to much ado about nothing and won’t get anywhere.
Just another excuse to shake down AI companies for a cut.
The goal is to make these tech upstarts fall in line with the Democrats!
After the next presidential election, we could see a Democratic administration handing out company approvals en masse.
If Republicans can cash in, then of course we Democrats want our cut too!
So, the IPO goes ahead in November, the roadshow proceeds, and the opening bell still rings.
But that $1.5 trillion valuation needs to be reconsidered.
Why reconsider it? Three numbers, each more damning than the last.
Growth has been cut in half.
Q2 revenue grew 144% quarter over quarter; in Q3, it was just 47%.
Everyone is waiting for the October figures to see whether the slowdown has gotten worse.
And yet that figure is conspicuously absent from the revised S-1.
The more they keep under wraps, the less credible that $1.5 trillion looks.
The balance sheet looks ugly.
Q3 revenue was $17 billion, up 11-fold year over year. Sounds impressive.
But it posted a net loss of $23.3 billion in a single quarter.
If it raises $100 billion, more than half will have to go straight into plugging the hole from those losses.
The most staggering figure is the $895 billion compute commitment.
$895 billion is 52 times its $17 billion in quarterly revenue.
At its current revenue, it would have to survive 13 years just to fulfill that commitment.
And the data centers underpinning that commitment are being dismantled by an election.
Of 44 local measures to “halt data center construction,” 43 passed.
In an NBC poll, 76% of voters opposed building data centers in their communities.
The new governors of five states, including Ohio and Texas, have pledged to pause construction.
Those five states account for about 40% of all planned data center capacity in the U.S.
Goldman Sachs estimates that short-term pauses will affect about 45% of planned capacity.
A thousand projects are slowing down, and some companies are starting to flee overseas.
Every canceled commitment is another piece of the story that falls apart.
Microsoft has already withdrawn from three Nscale projects and stepped up its oversight of Nebius, IREN, and Nscale. Some delays are tied to IREN’s Texas site.
Big customers are starting to pull out.
The cracks at the very top of the pipeline are plain to see.
So here’s my valuation forecast, straight up:
$1.5 trillion is the opening pitch, not the final sale price.
Investors say the ceiling is $1.5 trillion and they want an even better deal. Apply a 15% to 25% discount, and the deal will most likely land between $1.1 trillion and $1.3 trillion.
The offering will shrink too, from $100 billion to $70–80 billion.
The timing hasn’t changed: a November listing.
The price is what’s changing.
Watch three signals, each more concrete than the last.
Monday, November 9: does the roadshow launch? If it does, that means the company is willing to move forward at a discount.
The pricing range is announced. If the top end is below $1.5 trillion, the price cut has worked; if it lands between $1.1 trillion and $1.3 trillion, my forecast is on the mark.
Will October revenue data be added to the S-1? If so, the company has backed down. If not, the discount will be even steeper.
The porn-DVD seller brought the vice squad down on himself.
After the raid, the porn-DVD business carries on as usual.
It’s just that the $200–300 billion wiped off when the price was reset is an extra fine for the threat narrative they pushed back then.
