The trillion-dollar IPO vibes continue

One scoop to start: The president of Guggenheim Investments had her phone seized by the FBI last year as part of an investigation by federal prosecutors into entities controlled by billionaire Mark Walter, including the $260bn asset management giant.

And another: JPMorgan Chase terminated its banking relationship with Polymarket last year over regulatory concerns, underscoring enduring cautious sentiment towards prediction markets.

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In today’s newsletter:

• Anthropic’s dizzying IPO
• Mike Ashley brings the ‘Dunkirk spirit’
• The battle for Tata Group

Anthropic’s dizzying IPO

Mike Ashley brings the ‘Dunkirk spirit’

The battle for Tata Group

Anthropic lifts Wall Street’s animal spirits

It’s not every August that a $2tn IPO hangs in the balance as everyone packs up to hit the beach.

But DD’s George Hammond has the scoop that Anthropic investors expect the AI start-up to float at a valuation of $2tn or more in October, meaning by the time Labor Day rolls around Wall Street will be bursting with activity.

If the AI lab lists at that level it would be the biggest ever IPO, eclipsing even SpaceX’s offering at an eye-popping $1.77tn valuation earlier this summer.

The projection comes from Anthropic investors’ own models, as they said senior Anthropic executives had yet to fix the valuation target for the IPO.

Anthropic’s backers say the $2tn figure, more than double the company’s valuation of $965bn in May, is justified by booming demand for the lab’s advanced AI models and tools. Investors expect that the Claude maker’s annualised revenue will increase more than 10 times over the course of this year to reach between $100bn and $120bn by the end of 2026.

The start-up’s growth has been astonishing even by Silicon Valley standards. It’s gained ground on rivals OpenAI and Google this year, releasing models that have outperformed competitors while focusing on sales to business customers. The group announced in May that its annualised revenue had surpassed $47bn.

But Anthropic faces mounting challenges, and its anticipated listing comes as public markets grow more nervous about the AI boom.

Analysts at payments group Ramp found that while Anthropic increased its market share among US businesses last month, businesses were “hitting their limit on AI spend” and turning to cheaper alternatives.

On this front Anthropic faces stiff competition. The group’s market-leading model costs more than two and a half times as much to use as OpenAI’s flagship, while Chinese open-weight alternatives, which have also improved dramatically this year, are a fraction of the cost, according to Artificial Analysis, which analyses AI models.

The company has also run into political obstacles. It has clashed with the Trump administration and remains in active litigation against the US Department of Defense, which labelled Anthropic a supply chain risk earlier this year.

Investors are undaunted. “It’s easy to come up with challenges,” said an Anthropic investor who has also backed OpenAI and SpaceX. “But the company continues to be in first position in performance, positioning and what people want exposure to.”

A record-breaking IPO in October would be a fitting start to what may be one of the most epic final quarters of the year on Wall Street across M&A, IPOs and PE activity.

Mike Ashley bets big on luxury

One of Britain’s more colourful billionaires, Mike Ashley, has delivered a fresh missive.

The tycoon, who started off with one sports shop in 1982 and now has an international retail empire, has been pushing beyond trainers and tracksuits into the rarefied world of luxury fashion.

This summer his Frasers Group has made a takeover tilt for Hugo Boss, built a stake in Burberry and has now added the Harvey Nichols luxury department store chain to its stable.

In another eyebrow-raising interview with the FT’s Ashley Armstrong, the billionaire spoke about how his rampant stake-building in other retailers was “just my wheelhouse”. It’s true, he started by buying the tennis brand Donnay back in the 1990s, but as a discounting weapon against his rivals and a way to undercut Nike and Adidas on price.

Ashley says Burberry and Boss won’t get the Donnay treatment. But in inimitable fashion he told the FT he’d show Boss “a bit of Dunkirk spirit”.

His game plan is based on pushing more of the luxury goods through his existing premium store business: Flannels, House of Fraser and The Webster in the US. The strategy could have a threefold benefit for Ashley: his stores will get better access to products that could lure shoppers, the brands could see a boost in sales and as an investor Ashley benefits if the brands’ performance improves.

Ashley is known for his shrewdness and love of a casino, but he insists his stake-building isn’t gambling. Let’s see if this luxury bet is a winning one.

‘The beginning of the Noel Tata era’

Noel Tata, the 69-year-old scion of the Tata family, has emerged victorious after a year-long boardroom battle at India’s biggest conglomerate.

On Wednesday N Chandrasekaran, the chair of Tata Sons, the holding company of the $280bn group, said he would step down at the end of his tenure in February.

Now Noel Tata, who does not have executive powers as head of the charitable bodies that control the conglomerate, will need to find an ally to lead the group.

The sprawling conglomerate owns India’s largest IT services company, Jaguar Land Rover, and Air India, generates power and even produces salt. It is India’s largest private-sector employer, and its forays into sensitive sectors such as electronics and semiconductor manufacturing are vital to the country’s economy.

The recent push by India’s central bank to make Tata Sons go public was a key point of contention between the two business leaders. Noel Tata felt Chandrasekaran did not back his efforts to keep the company private. Chandrasekaran blamed him, without directly naming him, for blocking his reappointment.

Noel Tata’s critics feel he wants Tata Sons to be privately held because it allows him to exert more control. Also, many insiders and observers said that he eventually wants his son, Neville Tata, 33, to take over the company. People close to the family dispute that notion.

Noel Tata took over the charitable trusts after the death of his half-brother Ratan in 2024. Noel Tata still lacks his stature. But with Chandrasekaran on his way out, one shareholder said: “This is very much the beginning of the Noel Tata era.”

Job moves

• OpenAI chief revenue officer Denise Dresser is leaving after less than a year at the company. She will be succeeded by Dali Rajic who was previously president and chief operating officer of Wiz.
• Lululemon’s chief AI and technology officer, Ranju Das, has left the retailer, Bloomberg reports.
• Vinson & Elkins has hired Michael Burns as head of energy and infrastructure M&A for Emea in London. He joins from Ashurst.

OpenAI chief revenue officer Denise Dresser is leaving after less than a year at the company. She will be succeeded by Dali Rajic who was previously president and chief operating officer of Wiz.

Lululemon’s chief AI and technology officer, Ranju Das, has left the retailer, Bloomberg reports.

Vinson & Elkins has hired Michael Burns as head of energy and infrastructure M&A for Emea in London. He joins from Ashurst.

Smart reads

AI riches Wealth managers are aggressively competing to land clients at AI start-ups ahead of expected blockbuster IPOs, the FT reports. Some wealth managers have struck deals directly with employers on favourable terms.

Real charm Having a perfect face, kitchen or lifestyle isn’t as fashionable as it once was, Bloomberg Businessweek writes. Perfection is becoming dull and in the age of AI, seeming human is more important than ever.

Basketball turmoil Yesterday DD brought you the NBA’s off-season drama. Today The Wall Street Journal explains the “cloud of chaos” around the professional women’s league, the WNBA, this season.

News round-up

Canary Wharf Group sells SocGen office in £625mn deal (FT)

Trump enlists US tech groups for cyber privateering push (FT)

EY vaults from bottom to top of Big Four US audit quality league table (FT)

Bill Ackman calls his new fund’s slumping stock price ‘frankly absurd’ (WSJ)

Citadel imposes two-year non-competes even on some analysts (BBG)

Due Diligence is written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, Alexandra Heal, Robert Smith and Aaron Kirchfeld in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard, Kaye Wiggins, Oliver Barnes, Tabby Kinder and Julia Rock in New York, George Hammond in San Francisco and Arjun Neil Alim in Hong Kong. Please send feedback to [email protected]

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