SpaceX-Tesla merger and Anthropic IPO: how investors price AI (opens the source in a new tab)
- The FT's Big Read says Elon Musk wants SpaceX and Tesla combined into one AI-led company worth about $3.5tn, with pay awards that could reach $1.7tn.
- Anthropic told investors its third-quarter revenue was $16.8bn, up 45% on the quarter, and profitable on an adjusted basis, with an annual run rate of $67bn, Damodaran notes.
- Damodaran says young, loss-making firms are priced on buzzy metrics, from eyeballs to users to ARR, and warns that ARR can be defined in different ways.
- $16.8bn
- Anthropic Q3 revenue (Damodaran)
- $67bn
- Anthropic annual run rate, ARR (Damodaran)
Why it matters Whether it is a mega-merger or an IPO Initial public offering: when a company first sells its shares on a stock exchange., investors are paying for a story. Metrics like ARR, and pay targets tied to market value, shape how big that story looks.
Other side Bulls say AI's market is vast and the leaders will take most of it. Bears say compute costs, cheaper open-source rivals and rules could squeeze margins, and critics see the merger as a way to shift attention from a weaker Tesla. Damodaran takes no side until the full prospectus is filed.
Also read: Damodaran: From Eyeballs to Annual Run Rates