The City woke this morning to news that Anthropic, the artificial intelligence behemoth, is circling a $1tn valuation. That is not a typo. A company barely a decade old, built on algorithms and ambition, is now worth more than the entire FTSE 100 energy sector combined. And what does Her Majesty’s Treasury have to say? Another desperate plea for tech firms to list on British markets.
Let us be clear: this is not a story about innovation. It is a story about capital flight and the grim arithmetic of market efficiency. Anthropic’s ascent is a testament to the sheer gravitational pull of American venture capital and the liquidity of the Nasdaq. London, by contrast, offers a feast of regulation, a side of political uncertainty, and a dessert of thin trading volumes. It is no wonder that the brightest tech stars prefer to shine in New York or San Francisco.
The irony is rich. The same government that lectures the market on fiscal responsibility and wants to slash red tape is now wringing its hands about the exodus of high-growth firms. Brexit was supposed to free us to forge our own path. Instead, it has left us with a stock exchange that feels more like a museum of old industry than a launchpad for the future. Gilt yields are rising, inflation is stickier than a jam roly-poly, and the pound is twitchy. And in the midst of this, the Chancellor takes to the podium to urge Anthropic to consider a dual listing. Good luck with that.
To be fair, the London Stock Exchange has made noises about reform. The listing rules have been tweaked to allow founders more control. There is talk of a ‘growth segment’ for tech unicorns. But these are tinkerings on the margins. The real issue is structural. British pension funds, the lifeblood of patient capital, are increasingly shunning domestic equities for the safety of bonds and overseas assets. The result: a shallow pool of capital that cannot support the valuation multiples that Anthropic commands.
And what of Anthropic itself? Its growth is staggering, but the valuation story is underpinned by a belief that AI will transform everything from tax returns to cancer research. I am not so sure. The cycle of hype and disappointment is as old as markets themselves. Remember the dot-com boom? Pets.com? So when I hear $1tn, I hear the ghost of tulip mania. The company’s revenue is a fraction of its market cap, and regulatory scrutiny is tightening on both sides of the Atlantic. The Bank of England’s Financial Policy Committee has already flagged systemic risks from AI. No one has yet defined what ‘responsible AI’ means for a balance sheet.
But the market does not care about my scepticism. The market is driven by momentum and FOMO. And the momentum for Anthropic is such that even a whiff of a London listing would send the FTSE 100 into a frenzy. Yet it will not happen. The company will raise its next round in Silicon Valley, perhaps with a nod to SoftBank or a sovereign wealth fund. The British taxpayer will see none of the capital gains.
What can London do? The answer is not to beg. It is to make the market unmissable. That means cutting the stamp duty on share trading, which is an anachronistic tax on liquidity. It means forcing pension funds to allocate a minimum percentage to UK equities, a move that would free billions for tech. And it means a clear-eyed fiscal strategy that does not waver between austerity and stimulus. Until then, Anthropic’s $1tn is a wake-up call. But given the City’s track record, we will likely hit snooze.
The bottom line: Anthropic is a beacon of what could be and a mirror of what is not. London’s plea is not just pathetic; it is a distraction from the real work of making Britain a place where capital wants to stay. Until we fix the fundamentals, the only trillion-dollar valuations we will see are those of the companies that left.
