Claudia Kwan
Anthropic has lodged its Australian prospectus with ASIC and retail investors can apply for new Class A shares, with Nasdaq trading expected to begin on 20 November.
According to Claudia Kwan, portfolio manager at NorthStar, “There are clear risks around Anthropic’s competitive moat, particularly its pricing power. The circular financing structure is a red flag for the industry and creates governance risks, especially given the scale of financing required for growth. The exposure becomes systemic and entangled.
“Inclusion in the index means the index itself carries high factor risk, with many large companies dependent on one another. As a result, index and passive investors are now heavily leveraged to a single trade.
“The listing marks a new wave of companies coming to market. The preoccupation with picking the start, middle and peak of AI valuations is fascinating, but it ultimately comes down to return on invested capital and how capital is allocated relative to its cost. The assumptions required for Anthropic, and the conviction needed in those assumptions, are more challenging.
“The internet went through a bubble that then marked the beginning of a new era of companies, including Google and Amazon, which used the internet to create value. There will certainly be new mega caps worth investing in. However, unlike the internet disruption, AI requires capital and energy. Its growth therefore affects other areas of the economy, which will create a persistent tension for growth, and individual company moats are more difficult to define at this stage.
“We are invested in the picks and shovels of electrification — companies whose products or services drive energy costs down, increase circularity and strengthen the critical mineral supply chains that will enable AI — rather than the producers and sellers of AI itself. At this stage of the cycle, it is easier to gain conviction on their return on capital.
“The IPO will draw capital away from other parts of the market, and therein lies the opportunity for active, bottom-up stock pickers.”
