Anthropic Governance Faces Test Ahead of Potential $2 Trillion IPO

Anthropic heads toward an IPO worth as much as $2 trillion

Independent body set up to protect the company’s founding mission

Potential clash with shareholders seeking profitability

Anthropic is drawing attention for its unusual governance structure as it prepares for an initial public offering that could value the company at as much as $2 trillion. An independent body established to safeguard AI safety and humanity’s long-term interests has the power to appoint directors, raising the prospect of a clash with shareholder rights.

The Long-Term Benefit Trust, or LTBT, was created to preserve Anthropic’s founding mission of developing AI for the benefit of humanity without being swayed by commercial pressure, the Financial Times reported on September 8.

The LTBT can have as many as five members. Its current members include former Federal Reserve Chair Ben Bernanke, Clinton Health Access Initiative Chief Executive Officer Neil Buddy Shah, and Center for a New American Security Chief Executive Officer Richard Fontaine.

The group holds no equity in Anthropic, but its authority goes beyond that of a purely advisory body. It can appoint or remove a majority of the board. Four of Anthropic’s seven directors, including Netflix co-founder Reed Hastings and Novartis Chief Executive Officer Vas Narasimhan, were nominated by the LTBT.

The trust also receives advance notice of major management decisions, including the launch of new AI models. It reportedly recommended a limited release when Mythos was introduced.

Anthropic plans to keep the structure in place after going public. The FT said the company aims to establish the trust as a new governance standard for the AI industry.

The concern is that the structure could create friction with investors. Jesse Fried, a professor at Harvard Law School, said the LTBT could decide to sacrifice profits in support of the company’s mission. He added that Anthropic is seeking capital from investors focused on financial returns while maintaining a system that gives people with no equity control over key corporate decisions. In his view, potential tension with shareholders is built into the company’s DNA.

Anthropic is lossmaking, and pressure to generate profits stands to intensify after a listing. In the private market, it raised money from venture capital firms and others that understood the company’s founding mission and governance model. After an IPO, however, it would need to answer to a broader group of investors more sensitive to profitability. That could set up a conflict between the LTBT, which may forgo profits for social value, and shareholders demanding returns. Fried said the structure could still change before the IPO and that investors should factor the company’s unusual governance into a fair valuation.

Han Myung-hyun, Hankyung.com reporter, wise@hankyung.com