How to easily buy stock in Claude before the IPO

Would you like to buy stock in Anthropic, the company that makes AI model Claude?

Hopefully, your answer is “at what price?”

Let’s be honest, Anthropic is so hot, millions of investors out there would buy it at any prices, if only they could get access. Anthropic is hotter even than SpaceX according to demand for shares on secondary markets.

That’s because Claude is crushing its primary competitor ChatGPT lately. Despite having just 30 million users compared to ChatGPT’s 1 billion, Claude is making more money.

At RiskHedge, we cancelled our ChatGPT subscription and the whole company now uses Claude, if that tells you anything.

Unfortunately, Anthropic doesn’t trade on the stock market.

So most retail investors assume they must wait for the IPO at who-knows what crazy valuation, after most of the upside gone.

Anthropic’s IPO is rumored to be coming around October this year.

There’s an easy way for any stock market investor to buy a meaningful amount of equity in Anthropic before it does. Let’s look at it.

Your #1 problem with the AI boom is that most of the companies behind top AI models aren’t available to public investors.

The top 4 models:

1) ChatGPT maker OpenAI? Private.

2) Claude maker Anthropic? Private

3) Grok maker X? Private and recently absorbed into SpaceX, which is slated to IPO in a few months.

4) Gemini maker Google? Public but a giant company.

There are ways to buy tiny slivers of OpenAI or Anthropic by buying the giant companies that have invested in them.

Microsoft owns about 27% of OpenAI. Amazon and Google together own about a third of Anthropic.

So you could buy Amazon and technically own a tiny sliver of Claude. But really you’re getting Amazon’s cloud and retail and advertising businesses, along with a microscopic piece of the AI company you really want to own.

A better way to buy “Claude stock.”

SKM is a South Korean telecom company. It’s a boring, barely growing business. The kind we would never consider at RiskHedge, except for one thing.

In 2023, SKM made an all-time great investment decision. It invested $100 million in Anthropic, back when it was small before the AI boom had momentum.

SKM’s original investment has ballooned to $2.5 billion, and it still owns every share. That means Anthropic now accounts for close to 20% of SK’s entire market value.

For comparison, Anthropic makes up only 1% of Amazon’s market value, and only 0.3% of Google’s.

You can see the “Anthropicness” of SKM in its stock chart. Its telecom business has done nothing of note, yet the stock doubled from December to April:

Do we recommend buying SKM to own Anthropic? We’ll get to that momentarily.

For completeness, let’s first look at…

A bad way to buy Anthropic.

Shares of Anthropic are available on secondary markets. These are pre-IPO marketplaces that facilitate private sales.

For example, an employee of Anthropic could sell their private shares to you on a secondary market. Or a venture capitalist who bought in early could unload Anthropic on the secondary market.

EquityZen, Forge, and Hiive are some of the more popular platforms.

This can work if you’re an institution or a bigger investor. For most individual investors, it’s rarely worth it. The supply of shares is limited, which pushes up their prices. Anthropic recently traded at a valuation of over $1 trillion on secondary markets, even though it last raised money at just $380 billion. In other words, you’ll have to pay through the nose.

Also, you’re buying from insiders. As general guidance, be extremely skeptical when you’re buying something from an insider. By “insider” I mean employee or early VC. It is entirely possible that they just need liquidity. But more likely, they are unloading shares because they are getting a great deal at your expense.

Also, the minimum investment usually starts at $25k or higher. Companies may restrict transfers. There’s more paperwork. And higher fees.

What about VCX?

The Fundrise Innovation Fund (VCX) only started trading publicly in March.

Fundrise calls it “the public ticker for private tech.” That description is pretty accurate. The fund owns positions in a basket of private tech startups. Many of them at the center of the AI boom.

Two of its three biggest holdings are OpenAI and Anthropic. They represent 18% and 16% of the fund.

Each has built products people love. Is scaling fast. And is investing colossal sums in the future. By owning both through VCX, you don’t have to pick one winner.

You also get exposure to another important AI startup. Databricks. It’s VCX’s biggest holding, representing 22% of the fund.

Databricks is less famous than ChatGPT or Claude because it sells mostly to companies than consumers. It’s an AI-and-data platform for developers and large companies. It helps businesses gather huge amounts of data. Organize it. Analyze it. And build AI applications on top of it.

Still, it has become one of the most valuable private companies in the world, worth about $130 billion.

Put those three pieces together and half of VCX’s funds sit in today’s top AI startups.

The other half is spread out across tech names like Anduril, Ramp, Flock Safety, Epic Games, and dozens of others. So you’re getting a basket of elite startups as a bonus.

So should you buy SKM to own Anthropic?

As a short term trade ahead of Anthropic IPO, it makes sense.

The bigger question is whether VCX is a better option?

I’ll answer that in another article.

Stay tuned.