Anthropic’s IPO Could See the Company Valued Lower as Democrats Sweep Congress, But I’m Not Worried

Whoever says politics has nothing to do with business doesn't have to look far in the rearview mirror to find out they're wrong. Following Democrats' midterm election sweep last week, markets witnessed the largest-ever hammering in a single day, losing close to $3 trillion. Artificial intelligence (AI) stocks bore the brunt of the hit, but the biggest casualty may have been a company whose stock is not even listed yet.

Let's take a closer look at what's going on with Anthropic (ANT), which plans to list on the Nasdaq this month.

Anxious Anthropic

Scrutiny around Claude-maker Anthropic's initial public offering (IPO) has been intense ever since its S-1 filing, which included a “Risk Factors” section spanning a whopping 90 pages. Yet, not a single page could have envisaged that politics would potentially lead to a roughly $500 billion valuation cut for its IPO, if reports from The Wall Street Journal are to be believed.

According to the report, investors interested in participating in the IPO are purportedly valuing the company at closer to $1 trillion now, a substantial drop from the $1.5 trillion figure that was being bandied about earlier. Even the size of the fundraiser is expected to now be $64.4 billion, down from around $100 billion. Some have even speculated that the company may delay the IPO altogether, resulting in wider implications for the AI trade, as leaders like Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Nvidia (NVDA) all have stakes in Anthropic.

However, the Democratic sweep could turn out to be a blessing in disguise for the company, as the government and the AI lab remain at loggerheads over how much control it can retain over its Claude AI models when used for national security work. In February, President Donald Trump directed federal agencies to cease using Anthropic technology, while U.S. Secretary of Defense Pete Hegseth designated Anthropic as a national-security supply-chain risk and moved to remove Claude from U.S. Department of Defense (DoD) systems.

The dispute extended further after Anthropic sued the government in March 2026, arguing that the Pentagon’s actions violated the Administrative Procedure Act as well as the First Amendment and Fifth Amendment. On June 12, an additional flashpoint emerged after the government imposed export controls on Claude Mythos 5 and Claude Fable 5, although those export controls were lifted as of June 30. Notably, Anthropic says its current Claude Mythos 5.1 model is available only to vetted organizations through trusted-access programs and Claude Security.

Considering this, Anthropic's plight has been acknowledged by some leading lights of the Democratic Party, including Senator Elizabeth Warren and Senator Mark Warner. In fact, Senators Warner, Gillibrand, Kelly, Slotkin, Kaine, and Coons jointly pressed the DoD and AI companies for details on their AI contracts, while defending Anthropic’s right to impose compliance and safety mechanisms. Notably, Anthropic also donated $900,000 to Democratic committees and turnout efforts in California shortly before the midterm elections.

Accordingly, Democrats gaining an upper hand in U.S. politics may not be as bad for the company as it has been made out to be. Yet, investors remain doubtful about an old pet peeve with AI companies in general: Enormous spending on compute and rising debt. Anthropic's amended S-1 disclosed aggregate compute and infrastructure commitments of approximately $900 billion. Of this amount, $451.6 billion is expected to be incurred by December 2030, with $70.7 billion falling due in the 12 months following Sept. 30, 2026. The filing also highlighted the financing risk; some infrastructure partners depend on third-party financing, and any deterioration in credit availability could delay, reduce, or increase the cost of contracted computing capacity. 

Meanwhile, third-quarter revenue growth slowed to 47% sequentially from 144% in the preceding quarter, while the company reported a $23.3 billion net loss and a $567 million operating loss. This combination of massive long-term commitments, potentially expensive financing, and decelerating revenue growth has prompted questions about whether Anthropic can generate sufficient returns on its enormous AI infrastructure investments.

Overall, for the first nine months of 2026, Anthropic reported revenue of $33.24 billion, up a sensational 1,206% on a year-over-year (YOY) basis. Yet, net losses widened by 314% to $104 billion. The company spent $18.8 billion on compute and infrastructure in the same period, compared to just $4.4 billion a year ago.

Final Take

Democrats should not necessarily be viewed as AI skeptics. Instead, they can be viewed as being cautious — or, ironically, conservative — about AI companies and the implications of their massive capital expenditures. Yet, company-specific nuances should not be overlooked.

Anthropic's emphasis on safety and privacy may resonate with many Democrats. Further, Anthropic should look at the larger picture as well, as a correction in its valuation now has the potential to widen the investor base who could apply for the IPO. Some may now view it as reasonably priced, bringing a potentially stickier cohort to the table who believe in the merits and moat of the company. Those are investors who may not be easily deterred by any future short-term impacts.

On the date of publication, Pathikrit Bose did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.