Eric Schmidt wrote a check in 2021 when most of the investing world hadn't yet figured out what Anthropic could become. That check may now be one of the best bets of his career.
Former Google chief executive Eric Schmidt reportedly owns about 1% of the company behind Claude. If Anthropic goes public at a $2 trillion valuation, that slice would be worth around $20 billion.
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Bloomberg reported Oct. 19 that Schmidt put tens of millions of dollars into Anthropic's Series A round in 2021, citing people familiar with the matter. PitchBook data valued the company at just $461 million at the time. Schmidt and Anthropic declined to comment, and it's unclear whether he has sold any shares since.
The Math Gets Wild Fast
At $2 trillion, a 1% stake comes out to about $20 billion before dilution and taxes. That would add roughly a third to Schmidt's estimated $57.5 billion fortune and push him close to $80 billion, according to the Bloomberg Billionaires Index. Even at Anthropic's latest private valuation of $965 billion, the stake would be worth nearly $10 billion on paper.
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A $2 trillion valuation would be more than 4,300 times the company's Series A valuation, according to Bloomberg's reporting and PitchBook data. For comparison, Schmidt's venture firm Innovation Endeavors turned an early Uber Technologies (UBER) investment into a roughly 1,400-fold gain before the ride-hailing giant went public in 2019. Anthropic would leave that one in the dust.
Thanksgiving Could Bring a Debut
Anthropic is eyeing a stock market debut before the end of the year. Bloomberg reported that formal marketing could kick off as early as the week of Nov. 9, with trading possibly beginning before Thanksgiving. The company hasn't confirmed a date or a valuation.
The number may land lower than the $2 trillion figure. Reuters reported that some investors discussed a $1.5 trillion figure at an October meeting. At that price, a 1% stake would still be worth $15 billion before adjustments.
Revenue is a big part of the pitch. Anthropic told prospective investors that third-quarter revenue hit $16.8 billion, up 45% from the previous quarter, according to Reuters. The company also reported adjusted profitability for the quarter.
A Long Game Built on Early Bets
Anthropic has landed major backing from Amazon (AMZN) and Google parent Alphabet (GOOG) (GOOGL), along with other large investors. Schmidt has kept investing in tech since stepping down as Google's chief executive in 2011, through Tomorrow Ventures, Innovation Endeavors, and his family office, Hillspire. Artificial intelligence companies have taken up a growing share of that portfolio, and Anthropic is one of them.
Whether the windfall is $10 billion, $15 billion or $20 billion will depend on where Anthropic prices, how much of the stake Schmidt still holds and when he decides to sell. Either way, a check he wrote when Anthropic was valued at $461 million could end up as one of the biggest paydays of his career.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions 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.
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