Anthropic told prospective investors that a catastrophic AI-related incident could cause harm beyond what the insurance market can absorb, in the IPO prospectus it made public on Monday.
The risk factor
The warning appears in the “Risk Factors” section of the Form S-1, under “Risks Related to our Business and Industry,” in a risk factor headed “We may be exposed to liability, litigation, and regulatory action arising from harms associated with our AI models, and our contractual protections and insurance may be insufficient.”
“Our insurance policies also may not provide sufficient coverage to adequately mitigate the potential liabilities we face, especially where any one incident, or a group of incidents, causes disproportionate harm,” the filing says. “In addition, with the scale of harm that could result from a catastrophic AI-related incident, no single insurer, and potentially the insurance industry in the aggregate, may have sufficient capacity or expertise to underwrite insurance commensurate with such exposure.”
The company adds that “the insurance market for AI-specific risks is nascent and evolving, and we may be unable to obtain coverage for certain AI-related liabilities on commercially reasonable terms, or at all, leaving us exposed to potentially significant uninsured losses.”
Uncapped indemnities for testers
The same risk factor says Anthropic has taken on extra liability to support outside testing of its frontier models. The company says “we have agreed to indemnify certain external evaluators and testing vendors for specified losses arising from testing activities,” and that while those agreements generally limit its obligations, “certain of these agreements require us to defend and indemnify the evaluator, without a cap on our liability, against certain third-party claims.”
The filing also says “Harmful incidents involving our models, regardless of fault, could also severely and disproportionately damage our reputation and brand as a safety-focused AI company.”
A separate risk factor on cybersecurity says Anthropic may also be unable to obtain coverage for certain cybersecurity-related or data-related liabilities on commercially reasonable terms. CNBC reported that the S-1 includes more than 90 pages of risk factors.
Timing
The S-1 sets Anthropic up to begin trading as soon as the week before the Thanksgiving holiday, The Wall Street Journal reported in its live coverage on Monday. The share count and price range are blank in the prospectus. The company has applied to list on the Nasdaq under the symbol “ANT,” as AI Tech Daily reported.
Earlier coverage: Anthropic’s IPO timing.