Low-profile Wall Street firm to double down on Anthropic despite tech rout

A low-profile investment firm sitting on big gains from its Anthropic investment has told investors it plans to double down on the company despite Thursday’s brutal sell-off in AI-linked shares.

XN, which is based in New York and was founded by Gaurav Kapadia, a longtime Wall Street investor who has straddled public and private markets, plans to be a “large participant” in buying more shares in Anthropic during its public listing, according to an investor letter seen by the FT. The letter was sent late on Thursday after the market rout.

XN first invested in Anthropic in 2025 and has participated in a total of three rounds. Its stake was worth about $5.3bn at the time of Anthropic’s last primary fundraising in May, when the Claude maker was valued at $965bn.

Anthropic had been expected to be valued at upwards of $1.5tn in an IPO that was anticipated as early as this month, though that target could prove challenging after Thursday’s tech wipeout.

In the letter, Kapadia told investors Anthropic had stayed financially disciplined and prudently managed its balance sheet even while growing at an exceptional speed.

Kapadia started XN as a family office after leaving Soroban Capital, an equity hedge fund he co-founded in 2010, following several years at the firm previously known as TPG-Axon Capital Management.

The 45-year-old has remained remarkably under-the-radar even as he has become a prominent force on Wall Street. His investment firm, which has expanded further into private investments since launching in 2020, is also a big shareholder in the entertainment giant TKO Group.

XN is among a group of investment firms whose bets on Anthropic are now expected to yield big windfalls, alongside Philippe Laffont’s Coatue and Dan Sundheim’s D1 Capital. Coatue expects to have a stake worth more than $13bn if Anthropic’s valuation reaches the high end in its IPO, according to people familiar with the matter.

Hedge funds that pushed into private companies have begun to see blockbuster returns this year from their most prescient bets. Sundheim’s firm was also an early backer of SpaceX, having amassed a stake worth more than $20bn after it went public earlier this year, according to regulatory filings. The rocket maker accounts for more than half of its public stock holdings.

XN vowed to double down on its Anthropic investment despite the US political landscape having radically transformed following Tuesday’s midterm elections, with Democrats notching big wins in Texas, a hub for data centres and home to large AI groups, including SpaceX.

Many on Wall Street warned before the election that the outcome could have vast consequences for the AI trade. Investors on Thursday dumped tech names on fears that the incoming Democratic leadership in Congress and statehouses around the nation could imperil the AI growth story, particularly undermining investments in chips, servers and infrastructure development crucial to its advancement.

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While XN said it planned to be a “long-term shareholder” in Anthropic, it also gave details of how long it will be required to hold its stock as part of the AI group’s so-called lock-up, which limits how much and when big investors can sell their shares.

XN and other large investors will be able to sell 8 per cent of their shares in the first three months after Anthropic publicly lists, followed by various other milestones over the following several months, according to the letter. The final slice of shares can be sold after the first year.

“We believe Anthropic will be one of the world’s great category-defining enduring companies,” Kapadia said in the letter.

Additional reporting by George Steer in New York