STOCKS | Anthropic IPO Will Test Its Unusual Governance Structure

Anthropic is planning a large initial public offering that could value the artificial intelligence company at as much as $2 trillion. According to Sina Finance, the company’s external Long-Term Benefit Trust controls a majority of board seats, raising questions about whether its experimental governance model can withstand public-market scrutiny. The trust does not own any Anthropic equity, but it can appoint or remove a majority of directors. Four of the company’s seven directors were chosen by the trust, including Netflix co-founder Reed Hastings and Novartis CEO Vas Narasimhan. The trust currently has three members out of a maximum of five, chaired by Neil Buddy Shah, CEO of the Clinton Health Access Initiative. Other members include former Fed Chair Ben Bernanke and Richard Fontaine, CEO of the Center for a New American Security. Former California Supreme Court Justice Mariano-Florentino Cuéllar briefly joined the trust before leaving months later to become Anthropic’s head of global affairs. People familiar with the plan said Anthropic wants the trust to set a benchmark for future AI governance. One source said Bernanke was invited in July to make the trust more authoritative and institutionalized. The trust is deeply involved in company oversight. Major actions, such as the release of new AI models, must be disclosed to it in advance. Members meet internally every week and with company leadership every other week, and they attend regular board meetings to discuss major issues with the founders. Despite its broad authority, the trust has mainly served an advisory role so far. One person familiar with its operations said it has never drawn a hard line or forced the company to make a major trade-off between profit and mission. Harvard Law School corporate governance professor Jesse Fried said the structure “builds in conflict.” He wrote in a recent paper that Anthropic is raising money from profit-seeking investors while letting a small group of self-selected trustees decide how much profit to sacrifice for the mission. Other experts warned that Anthropic’s trust design has no precedent. The company is still losing money and will eventually need long-term sustainable profitability, when the mechanism will face real pressure. According to Sina Finance, the trust includes an emergency mechanism under which 85% of shareholders can vote to remove trust members, though that supermajority provision may change after the IPO.