The Fog of Going Public
Anthropic and OpenAI are now heading toward trillion-dollar IPOs. Both companies once said the use of AI in war was out of bounds, but military contracts remain the best way to make the numbers work.
(A.I. Disclosure: I use LLM technology to help with research, fact-checking, document summaries, editing, and rewrites. I’m trying to use it responsibly, but I’m learning as I go. You can read my full ethics disclosure here.)
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When he stood onstage with the Pope last month, Christopher Olah, cofounder of Anthropic and the only representative of a tech company there, listened to Leo XIV detail a framework of moral accountability for harvesting data, compressing choice, and automating death. As he nodded along with the pontiff, he must have known a few contradictory things he wasn't going to discuss that day. For one thing, his company's technology is embedded in the battlefield-decision systems the Pentagon has been using to choose targets in Iran. (And attacks on Iran were taking place that very afternoon.) And his company was about to file confidentially to go public, in what could be the largest IPO in the history of capitalism.
In his remarks, Olah told the assembled cardinals and theologians that every frontier AI lab — including his own — “operates inside a set of incentives and constraints that can sometimes conflict with doing the right thing.” He said the world of technology needs “moral voices that the incentives cannot bend.”
Now, however, his company and its closest rival are about to experience the most powerful incentives capitalism has to offer, and their moral voices will be brutally tested — pushed, pulled, and twisted — by the market.
Anthropic filed its S-1 confidentially on Monday, according to The New York Times and others. The numbers are extraordinary: the company’s annualized revenue reached $47 billion in May 2026, up from roughly $10 billion the prior year — what CEO Dario Amodei has called a “crazy” trajectory of “80x growth.” The anticipated IPO valuation is approaching $965 billion, with Goldman Sachs, JPMorgan, and Morgan Stanley already in the room. The stock could debut as soon as the fall. Meanwhile, OpenAI, the company’s closest rival, is preparing its own listing, targeting above $1 trillion, as early as September. Each possibility is an unprecedented moneymaking opportunity for its founders, and for Wall Street.
Neither company was built for this. OpenAI was founded as a nonprofit research lab. Anthropic was created by former OpenAI researchers who left specifically because they thought the company was moving too fast without adequate safety commitments. Dario Amodei and his colleagues incorporated Anthropic as a Public Benefit Corporation — a legal structure explicitly designed to put mission alongside profit. They built a Long-Term Benefit Trust, an independent governance body with escalating board-election rights, meant to prevent short-term financial pressure from overriding safety decisions.
The Wall Street Journal has reported on what happens when that architecture meets public markets: “Going public would likely force Anthropic to choose between its current public benefit structure and shareholder obligations.” A Harvard Law review of the structure, published this week in Fortune, found that a supermajority of Anthropic’s investors can terminate the Trust and remove the directors it appointed. The safety architecture is real, but it turns out it can also be dismantled by its own people, given the right pressures.
Which brings us to military contracts.
Anthropic wasn’t strong-armed into working for the military. It chose to do so.
In November 2024, Anthropic partnered with Palantir and Amazon Web Services to supply Claude to US defense and intelligence systems, which deployed it inside classified environments. The partnership allowed Claude to operate within Palantir's AI Platform on Impact Level 6-accredited infrastructure — the highest security classification available to commercial vendors. Eight months later, Anthropic was awarded a $200 million DOD contract and became the first AI lab to integrate its models into mission workflows on classified networks. None of this was done with any outward sign of reluctance.
But the company did eventually find itself articulating some regret. After Anthropic learned that its technology had been used in planning the kidnapping of Nicolas Maduro from Venezuela, it told the DoD it couldn’t permit the use its tech for the mass surveillance of American citizens (foreign citizens were still fair game, in their view), nor as the sole decision-making method in choosing people to kill.
That’s where a standoff began. In February 2026, the Pentagon gave Anthropic a deadline: drop those restrictions, or lose the contract. Anthropic refused. Trump ordered the federal government to cease using its products. Defense Secretary Pete Hegseth designated the company a supply-chain risk — a label previously reserved for giants like Huawei, controlled by geopolitical rivals. Anthropic sued.
But the handy narrative — principled anti-war company vs. unscrupulous military — doesn’t reflect what actually took place. CEO Dario Amodei wasn’t anti-war, for one thing. In his public statement the day the Pentagon standoff reached its peak, Amodei wrote: “I believe deeply in the existential importance of using AI to defend the United States and other democracies, and to defeat our autocratic adversaries.” He said Anthropic had been “the first frontier AI company to deploy our models in the US government’s classified networks, the first to deploy them at the National Laboratories, and the first to provide custom models for national security customers.” He listed all of this as a point of pride.
Anthropic also didn’t sue on ethical grounds, or to cut ties with the military. It sued to continue to be able to sell to the DoD. And the military wasn’t exactly able or willing to kick its Claude habit, either.
Hours after the ban was declared, the Pentagon was nonetheless using Claude in its first airstrikes on Iran. The Washington Post reported that to strike a thousand targets in the first 24 hours of Operation Epic Fury, the US military leveraged Claude through its integration with Palantir’s Maven Smart System — for intelligence assessments, target identification, and simulating battle scenarios. (Listen to my conversation here with Katrina Manson, the reporter who went deepest inside the story of Maven Smart System.) Pentagon Chief Information Officer Kirsten Davies confirmed to Sen. Jack Reed that “the system is active right now.”
The ethical lines Anthropic drew were precise, and, read quickly, highly principled: no mass surveillance of Americans, no fully autonomous weapons. But using Claude to help select which Iranian facilities to bomb was comfortably in-bounds.
Why walk into this weird, shady market? After all Anthropic’s first military contract was worth only $200 million. Small money, for a company on its way to a trillion-dollar valuation. But military contracts are relationships. They are dependencies. And they are a long-term source of potentially enormous amounts of reliable revenue for a company that is about to desperately need it.
