Investor Michael Burry has cautioned that Anthropic’s USD 965 billion valuation points to an artificial intelligence bubble, pointing out that this sum could instead purchase 78 profitable S&P 500 enterprises. He contrasted the firm’s private market worth with established commercial entities like lululemon, Clorox, and Domino’s.
His warning arrives as Anthropic gears up for a prospective initial public offering (IPO), with potential investors holding discussions regarding valuations nearing USD 2 trillion. Utilizing his Cassandra Unchained profile on X, Burry published the comparison. Furthermore, he reviewed historical IPO valuations while casting doubt on whether the AI firm’s long-term revenue streams can support its price tag.
Michael Burry Compares Anthropic with 78 Profitable Companies
Burry framed his analysis as a method to evaluate private firm valuations against profitable commercial operations. His roster featured Stanley Black & Decker, J.M. Smucker, Hormel Foods, and Deckers.
Additional companies on the list included McCormick, NVR, Tractor Supply, Albemarle, Alliant Energy, and News Corp. He additionally cited MGM, Wynn, DaVita, Huntington Ingalls, and Norwegian Cruise Line.
This evaluation concentrated on the cumulative market capitalization of the 78 businesses rather than their earnings or revenue figures. Nevertheless, Burry did not clarify which specific Anthropic valuation he utilized for his math.
A funding round in May pegged Anthropic at USD 965 billion. CNBC reported that Sequoia Capital, Altimeter Capital, Dragoneer, and Greenoaks spearheaded the USD 65 billion financing effort.
In a separate comparison, Burry stacked Anthropic up against United Parcel Service (UPS), which held the highest pre-IPO valuation adjusted for inflation between 1990 and 2000.
He pegged the valuation of UPS at USD 119 billion. At that juncture, the delivery firm traded at 2.4 times sales and 26 times earnings. UPS boasted a history spanning 92 years and posted an 8.6% net profit margin.
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Anthropic IPO Could Push Valuation Toward USD 2 Trillion
Established in 2021, Anthropic is significantly younger than UPS was prior to its public market debut. Its financial disclosures paint a distinct picture as well.
Based on Fortune reporting, a leaked draft prospectus from Anthropic detailed a net loss of USD 42 billion for 2025. Reuters noted that accounting adjustments, rather than day-to-day operating costs, accounted for the bulk of that deficit. The identical paperwork reflected USD 11.5 billion in revenue for the second quarter of 2026, alongside indications that Anthropic was tracking toward a second straight operating profit.
Concurrently, the organization laid out plans for USD 518 billion in anticipated cloud and infrastructure expenditures over the coming years. Prospective backers have subsequently weighed fair valuations ranging from USD 1.8 trillion to USD 2 trillion. According to CNBC, Anthropic targets a public market launch ahead of Thanksgiving.
Reuters indicated that market analysts anticipate the first major AI laboratory to go public will set a valuation benchmark for the broader sector.
Burry Extends His Warnings About AI Market Valuations
Burry’s latest statements build upon a series of cautions regarding stock valuations and AI expenditures throughout 2026. Back in June, he questioned whether Anthropic could maintain a long-term valuation hovering near USD 1 trillion, contending that increasingly sophisticated AI architectures demand excessive computational infrastructure.
He also forecast that computing capacity would commoditize, mirroring internet connectivity. From his perspective, prevailing spending trends project a misleading image of enduring demand. On September 14, Burry criticized conversations centered on decelerating AI development, asserting that such measures could advantage incumbent companies while rivals attempt to close the gap.
Subsequently, on September 29, he advocated for a severe market correction to head off the planned public listings of Anthropic and OpenAI, warning that these entities could wipe out trillions of dollars in capital. On October 5, Burry characterized the equity markets as entering a denial phase, a stretch he anticipates will persist for six to nine months.
Final Thoughts
Michael Burry’s critique focuses on Anthropic’s valuation relative to profitable public equities and historical IPO precedents. Although Anthropic has demonstrated robust revenue expansion, its prior deficits and projected infrastructure outlays remain focal points of contention. Its potential USD 2 trillion IPO valuation may ultimately test the appetite of public market investors for artificial intelligence ventures.
