Live Markets: Anthropic's IPO could mint AI fortunes for Alphabet, Amazon

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ANTHROPIC'S IPO COULD MINT AI FORTUNES FOR ALPHABET, AMAZON
As artificial intelligence startup Anthropic moves closer to a public listing, investors are looking beyond the potential windfall for its biggest backers and focusing on a more consequential question: just how much have Alphabet GOOGL.O and Amazon AMZN.O come to rely on the AI company for future cloud growth? 
Scotiabank said an Anthropic IPO would turn one of the largest private AI holdings on the balance sheets of Alphabet and Amazon into a publicly priced asset. But the brokerage argues that the bigger issue is Anthropic's growing importance as a customer of Google Cloud and Amazon Web Services.
At a $1.5 trillion valuation, Scotiabank estimates Anthropic's stake could be worth about $16 per share for Alphabet, or roughly 5% of its stock value, and about $27 per share for Amazon, equivalent to nearly 10% of its stock value. 
The brokerage said Amazon stands to gain more from the value of its ownership stake.
The discussion comes as expectations for Anthropic's market debut have cooled. Reuters reported earlier this month that some investors attending Anthropic's investor day discussed a valuation of about $1.5 trillion, down from prior expectations of roughly $2 trillion, after the company disclosed slower third-quarter revenue growth. 
The company told investors that third-quarter revenue rose 45% from the prior quarter to $16.8 billion and that it was profitable on an adjusted basis during the period.
The larger exposure, however, may be commercial rather than financial. Anthropic has reportedly committed roughly $111 billion to Google Cloud and about $110 billion to Amazon Web Services, making the startup a significant contributor to future revenue growth at both businesses. Those commitments account for about 22% of each cloud unit's disclosed backlog, underscoring the extent of their exposure.
     
(Rashika Singh)
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