Amazon poised to be biggest winner as Anthropic files for IPO

Tech giant's convertible notes valued at $97.9 billion; VCs also in line for multibillion-dollar paydays

By LineZotpaper AI staff

Published28 October 2026

Read Time3 min

Sources2 outlets

Anthropic has filed for an initial public offering, revealing a highly unusual ownership structure in which no venture capital firm holds a 5% stake, while strategic partner Amazon stands to reap gains worth tens of billions of dollars from convertible notes and preferred stock, according to the company's S-1 filing.

Many venture investors are set for massive returns when the AI company goes public, with firms including Menlo Ventures, Sequoia, Sound Ventures and Spark Capital expected to gain billions. Yet none of those firms owns 5% of the company, the threshold for inclusion in the principal stockholders' table, according to the S-1. That is highly atypical for a tech IPO, where lead venture investors typically hold double-digit percentage stakes.

The reason is Anthropic's enormous size. At a private valuation of $965 billion, a 1% stake is worth nearly $10 billion. Bloomberg figures reported recently put Menlo's position at roughly $14 billion, or about 1.5% of the company.

As venture firms hold relatively small percentage stakes, strategic partners that bought large blocks of stock are poised to dominate the financial outcome of the IPO. Amazon is likely the single largest financial beneficiary. It first backed Anthropic in 2023 with a commitment of up to $4 billion and has since poured billions more. Rather than taking stock upfront, Amazon structured much of its investment as convertible notes, debt that converts into shares upon an IPO or sale.

As of June 30, Amazon held convertible notes with $6.2 billion in principal outstanding, representing Anthropic's entire debt load. But as Anthropic's valuation soared, the value of the shares those notes will convert into also surged. Amazon's own filings valued its note holdings at $97.9 billion as of June 30.

Anthropic recorded the growing value of what it owes as a non-cash charge of $72.4 billion for the first half of 2026 on its income statement under "change in fair value of convertible notes, derivative liabilities and SAFEs."

Amazon's notes could convert into as many as 1.84 billion shares, according to the S-1, but a cap limits Amazon to 12% of Anthropic's "partially diluted" share count. Amazon can waive the cap; notes that cannot convert will remain outstanding and convert in later quarters subject to the same limit.

Beyond the notes, Amazon invested $10 billion in nonvoting preferred stock during the second quarter, putting $5 billion into each of Anthropic's last two funding rounds. Combined with $8 billion invested in notes from 2023 through 2025, Amazon's total investment is about $18 billion. Amazon will also continue to earn significant revenue from Anthropic, which has committed to spend at least $110 billion on AWS over the next 10 years.

Google is also set for a major windfall. The search giant held about 14% of Anthropic as of early last year, according to court filings reported by The New York Times, and has invested more since, including $10 billion in April. PitchBook analyst Harrison Rolfes estimated its current stake at closer to 5.6% following dilution. Google has also secured at least $114 billion in cloud commitments from Anthropic through 2033.

The S-1 itself warns that some of those cloud providers also build rival AI models and may not always want the same things that Anthropic does.

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Analysis

Why This Matters

The IPO will be one of the largest in technology history, with a private valuation of $965 billion, and will redistribute enormous wealth from the AI boom to venture investors and corporate backers alike.
It reveals how deeply AI startups are tying themselves to big tech cloud providers for both capital and computing infrastructure, creating potential conflicts of interest as those same cloud providers develop competing AI models.
The structure of Amazon's investment, using convertible notes that ballooned in value, could set a precedent for other strategic corporate investments in high-growth AI companies.

Background

Anthropic was founded in 2021 by former OpenAI employees and has become one of the leading developers of large language models, competing directly with OpenAI and Google. The company has raised tens of billions of dollars, much of it from Amazon and Google, which also provide the cloud computing infrastructure Anthropic relies on. Its IPO comes at a time of intense competition and rapid investment in AI capabilities.

Key Perspectives

Amazon: As the likely single largest financial beneficiary of the IPO, Amazon holds convertible notes valued at $97.9 billion as of June 30, plus $10 billion in nonvoting preferred stock, and has secured $110 billion in cloud commitments from Anthropic.

Google: The search giant held about 14% of Anthropic as of early last year and has invested at least $10 billion more since, with PitchBook estimating its current stake at closer to 5.6%; it has also secured at least $114 billion in cloud commitments.

Venture capital firms (Menlo Ventures, Sequoia, Sound Ventures, Spark Capital): They are expected to return billions from the IPO despite none holding a 5% stake, a highly unusual outcome due to Anthropic's massive valuation.

Anthropic (S-1 warning): Some cloud providers also build rival AI models and may not always want the same things that Anthropic does, potential conflicts of interest that investors should consider.

What to Watch

Whether Amazon waives the 12% cap on its note conversion, potentially increasing its stake beyond that limit.
How much dilution Google and other early investors have experienced after Anthropic's massive recent funding rounds; a clearer picture of Google's current stake may emerge in IPO filings.
The final IPO valuation and first-day trading performance, which will test whether the private market's $965 billion valuation holds in the public market.

Sources

Checked

12 claims in this story checked against 1 source: 10 supported.

Show each claim

SupportedAmazon is poised to be the biggest financial winner from Anthropic’s IPO.TechCrunch: “Indeed, Amazon is likely the single largest financial beneficiary of the IPO.”
SupportedAnthropic has filed for an IPO.TechCrunch: “according to Anthropic’s S-1”
SupportedAmazon’s convertible-note holdings were valued at $97.9 billion as of June 30.TechCrunch: “Amazon’s own filings valued its note holdings at $97.9 billion as of June 30.”
SupportedVCs are expected to make billions from the IPO.TechCrunch: “Stakes held by firms including Menlo Ventures, Sequoia, Sound Ventures, and Spark Capital are expected to return billions .”
Partly supportedNo venture capital firm holds a 5% stake in Anthropic.TechCrunch: “Yet according to Anthropic’s S-1 , none of those VC firms owns 5%”
Partly supportedAmazon stands to reap gains worth tens of billions of dollars from convertible notes and preferred stock.TechCrunch: “Amazon’s own filings valued its note holdings at $97.9 billion as of June 30.”
SupportedAnthropic had a private valuation of $965 billion.TechCrunch: “At its $965 billion private valuation, a 1% stake is worth nearly $10 billion”
SupportedAmazon’s $6.2 billion in outstanding convertible-note principal represented Anthropic’s entire debt load.TechCrunch: “According to the S-1, Amazon holds convertible notes with $6.2 billion in principal outstanding as of June 30. That is Anthropic’s entire debt load.”
SupportedAnthropic recorded a non-cash $72.4 billion charge related to the fair value of convertible notes, derivative liabilities and SAFEs in the first half of 2026.TechCrunch: “It reported the adjustments on its income statement under “change in fair value of convertible notes, derivative liabilities, and SAFEs,” a line that totaled $72.4 billion for the first half of 2026. The charge is non-cash”
SupportedAmazon’s total investment was about $18 billion, including $10 billion in preferred stock and $8 billion in notes.TechCrunch: “Combined with the $8 billion it invested in the notes from 2023 through 2025, that brings Amazon’s total investment to about $18 billion.”
SupportedAnthropic has committed to spend at least $110 billion on AWS over the next 10 years.TechCrunch: “Anthropic, which has committed to spend at least $110 billion on AWS over the next 10 years.”
SupportedA PitchBook analyst estimated Google’s current Anthropic stake at closer to 5.6% following dilution.TechCrunch: “with PitchBook analyst Harrison Rolfes telling TechCrunch he estimates its current stake at closer to 5.6%.”