If there’s one thing that AI companies are known for, it’s their fondness for seemingly incomprehensible numbers. Over the last few years, the industry has seen eye-watering salaries, unprecedented adoption figures, and never-before-recorded capital expenditure. Now come total addressable market estimates—known as TAMs—worth roughly 40% of the entire US equity market.
AI lab Anthropic, reportedly on the verge of a $2 trillion IPO, is preparing to tell investors that its total addressable market is worth more than $30 trillion, according to a report in the Wall Street Journal.
To put that figure in perspective, it eclipses the total GDP of China, is roughly equal to the entire GDP of the U.S., and represents about a quarter of the total world GDP of $120 trillion.
Rather than a forecast of Anthropic’s imminent sales, a total addressable market, or TAM, is the annual revenue a company could theoretically generate if it captured 100% of the relevant market. TAMs are staple of the pitch decks entrepreneurs use to try to persuade venture capital firms to back them, as they give some sense of how big the company could potentially become. But they are also a common figure for IPO-stage companies attempting to justify the gulf between current revenue and a company’s proposed valuation.
