Anthropic Files for IPO, Alphabet to Raise $80B for AI Buildout

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Tuesday, June 2nd. In today's episode, we'll break down Anthropic's filing to go public, and why it's making Mika nervous. We'll also tell you about Google's plans to raise $80 billion by selling their own stock. Then stick around to the end of the show to find out how SoftBank just pulled off something it hasn't done since the peak of the.com bubble. We got a great show for you today.
Let's go.
Stocks started June off with a so-so kind of day. The S&P 500 did move higher, adding 0.3%, while the NASDAQ gained 0.4%, both closing at record highs. But under the hood, it wasn't such a pretty picture. More than half the stocks in the S&P 500 closed in the red on Monday. In fact, nine of the 11 sectors were down. The only two sectors that moved higher were tech and energy. So the market continues to be top heavy with tech leading the way. Software names in particular had a big day with the software ETF IGV jumping 6% on Monday. And energy stocks rallied yesterday because of oil prices surging again. US crude jumped more than 5% on Monday to about $92 a barrel, while Brent crude climbed to near $95 a barrel after peace talks with Iran broke down again. So there just continues to be whiplash when it comes to Iran. One day, a deal looks close to done. Then the next day, missiles start flying again and talks fall apart. And this back and forth has been happening for weeks now and it's keeping the oil markets on edge. Now, speaking things of being on edge, let's talk about Bitcoin because I haven't talked about Bitcoin on this show for weeks now. And it's honestly because there hasn't been much to talk about. Bitcoin has been stuck in the $70,000 to $80,000 range for the past few weeks, but the price did break below $70,000 this morning after Michael Saylor's company, Strategy, sold Bitcoin for the first time since 2022 Now, to be fair, it was a very small amount that they sold, just 32 coins for around $2.5 million, and they did it to cover the dividend payment on their preferred stock. So it's not like Michael Saylor is panicked selling Bitcoin or anything. Strategy still owns more than $843,000 Bitcoin worth over $60 billion. But there hasn't been a lot of positive things happening for Bitcoin these days. Overall, Bitcoin is down 20% for the year and down more than 50% from its peak back in October. So we're still in a crypto winner, and I don't really know what it's gonna take to get out of it, especially since all the market attention continues to be on AI. But look, we're gonna stay on top of all of it for you guys, stocks, oil, Bitcoin, AI, so make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop.
Let's run through some headlines, starting with Anthropic. Well, guys, it officially happened, Anthropic, the maker of Claude, has confidentially filed for an IPO on Monday. Now, since this is a confidential filing, we didn't get the S1 with it, which contains all the financial information about the company. We also didn't get any details on what valuation Anthropic is targeting. All of that information will come closer to the actual listing, which is expected to be as early as this fall. Now, as far as valuation, we just talked about last week how Anthropic raised $165 billion at a $965 billion valuation. So their valuation will likely be north of a trillion dollars, maybe even north of two trillion dollars with the way things are going right now. So it's on track to be one of the biggest IPOs in history. And you know, what's interesting is that many people thought that OpenAI would IPO before Anthropic, but Anthropic beat them to the punch. What's funny is that OpenAI CEO Sam Altman was on CNBC yesterday. He got asked about the Anthropic IPO filing and he kind of downplayed the whole thing, telling CNBC that he doesn't think that it's a race to IPO and that OpenAI would go public when it makes sense for them. Personally, I feel like an announcement from OpenAI is gonna be coming pretty soon because they wanna take advantage of the frothy market that we have right now. So that means that we could be on track to have three of the biggest IPOs ever in the next few months with SpaceX, Anthropic and OpenAI. But look, I've said this multiple times in the past, these companies IPOing at the same time could be a potential top signal for the market, at least in the short term. For one, these huge IPOs are going to suck up a ton of capital out of the system. And then on top of that, the anticipation of these IPOs is what's been driving the AI hype in the markets over the past couple years. So once these companies hit the public market, then what? You know, it's like the dog catching the car. Like what do you do next? So like I said, I'm a bit nervous, but I also can't wait to dive into Anthropics Financials when they finally drop the S1. You know, the SpaceX S1 revealed a ton of red flags. So really curious to see what Anthropics numbers look like. And overall, I think we're in for a very fun and memorable summer. It also could be the last fun summer we have in a while, depending on what happens to the markets following the IPOs. Let's stick with the AI theme and talk about Google. Google's parent company, Alphabet, just announced that they're raising $80 billion by selling their own stock. And fun fact, 10 billion of that is gonna be bought by Berkshire Hathaway. Google's plan is to use the money to fund their massive AI build out. Now this news caught a lot of people off guard because Google is one of the most profitable companies on the planet. So the fact that they're issuing stock to raise cash is a big deal. In fact, this is reportedly the first time that Google has issued stock since they first went public back in 2004 They just never needed the money because their core business is a money printing machine. The problem though is that the cash flow from Google's business isn't enough to keep up with Google's AI ambitions anymore. Google is on track to spend up to $190 billion this year on AI. And some analysts think that 2027 spending could top $300 billion. So that's more money than Google makes from its operations. And that's why Google is looking to raise money. Now, what's interesting though is that instead of taking on debt, Google is issuing their own stock because Google stock has more than doubled over the past year. So, you know, if you're going to issue stock, it's best to do it when it's near record highs, which is the case for Google. Now, Google stock is down this morning following this news because one problem with issuing more stock is that it dilutes existing shareholders. So, one share of Google is now a slightly smaller piece of the overall pie. But the bigger story, though, maybe the market is getting nervous that Google is outspending its own cash flow to chase an AI payoff that still hasn't fully materialized. There seems to be no slowdown in spending on AI capex from these big tech giants. And I wonder if we're going to see more big tech companies issue their own stock to fund their AI ambitions.