Burry Criticized Anthropic's Record AI Valuation
The private valuation of $965 billion has sparked warnings regarding the disconnect between AI pricing and earnings.
Updated on Oct. 6, 2026 in Artificial Intelligence
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Investor Michael Burry has criticized the $965 billion valuation Anthropic achieved in May 2026. He noted this figure exceeds the combined market capitalization of 78 S&P 500 companies.
Why it matters
The critique highlights a growing tension between private-market AI valuations and the fundamentals of established, profitable businesses. It underscores the financial scrutiny facing the sector as major AI labs prepare for potential public offerings.
Anthropic reported $4.6 billion in revenue for 2025 against an $8.06 billion operating loss, a significant increase from prior losses. For historical context, UPS held an inflation-adjusted pre-IPO valuation of $119 billion in the 1990-2000 period.
The players
Michael Burry
An investor known for identifying market bubbles and comparing private enterprise valuations against traditional S&P 500 benchmarks.
Anthropic
An AI research and development company focusing on large language models that recently filed a confidential prospectus for an IPO.
OpenAI
A research organization and developer of generative AI models that has filed a confidential IPO prospectus but delayed public listing plans.
Sam Altman
The CEO of OpenAI who currently prioritizes AI safety over immediate public market entry for his company.
The details
Michael Burry calculates private-market AI valuation disparities by benchmarking firms like Anthropic against the market capitalization of profitable, established S&P 500 members such as Domino's and Clorox. Anthropic has filed a confidential prospectus for an IPO, which analysts project could seek a valuation near $2 trillion. While OpenAI also filed a confidential prospectus in June 2026, CEO Sam Altman has ruled out a 2026 listing, citing AI safety concerns.
Timeline
May 2026: Anthropic reached a $965 billion valuation.
June 2026: OpenAI filed for a confidential IPO.
September 14, 2026: Burry commented on development plans for Anthropic and OpenAI.
September 29, 2026: Burry suggested market declines to prevent these IPOs.
Post-November 2026 midterms: Expected timeframe for the Anthropic IPO.
The Tech Race
This development marks a significant escalation in the race to public markets between top AI labs, following the precedent of the 1990-2000 pre-IPO valuation period of United Parcel Service Inc. While labs seek trillion-dollar valuations, the divergence between these targets and current operational losses remains a central point of industry contention.
The public listing process will dictate future availability of shares for retail and institutional investors. Until the IPO, these valuation metrics remain largely abstract for the general public, though they signal the scale of capital requirements for future AI development.
The takeaway
Burry's analysis points to a significant valuation gap between AI startups and traditional profitable companies that warrants close monitoring by observers of the public markets. Investors should track future regulatory filings and IPO pricing to see if these high private valuations hold when tested by public market scrutiny.
What happens next
Watch for the conclusion of the November 2026 midterms, as market conditions following this period are cited as the primary indicator for the timing of the Anthropic IPO.
Further reading
For broader insights on market trends in the sector, explore the Artificial Intelligence section.
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