First comes innovation, then comes negotiation. Anthropic’s unfortunate skirmish with the US government, which slapped an export ban on its most advanced AI models on Friday, shows that for any industry, creating impressive products is of limited use if a company can’t sell them profitably. That’s a fact that investors chasing thirteen-digit AI valuations might previously have missed.
Anthropic’s case is, to be fair, an odd one. The White House’s curb on the company’s newest models comes in the context of an already-fractious relationship between the two sides. But it raises a wider question that could weigh on Anthropic and its chief rival OpenAI as they head towards initial public offerings. What if being good at AI doesn’t equate to delivering handsome returns to shareholders?
The stakes couldn’t be higher. Elon Musk’s SpaceX, which also has designs on creating leading-edge AI, went public on Friday valued at more than 60 times its expected $30bn revenue for this year. Across the market, credulity is at historic levels. Palantir, an exemplar of market ebullience, crested last year at 96 times sales. By contrast, older tech companies such as Facebook owner Meta Platforms, Google parent Alphabet and Musk’s Tesla have never exceeded 25 times, according to LSEG data.