New Delhi, Aug. 19 -- Frontier AI companies looking to raise public funds have left lots of investors puzzled. While private funders assign them eye-popping valuations, scepticism has risen over the vast sums of capital going into the American AI industry, especially amid a web of circular deals.

Anthropic's valuation, for instance, is projected by some big investors at around $2 trillion by 2028, based on its forecast of $190-200 billion in revenue. That would be more than double its current valuation of about $965 billion, with its annualized revenue at $47 billion in May.

Its rival OpenAI is privately valued at $852 billion, with its annual topline put at just over $25 billion, as extrapolated from its monthly data. Can the equity of...