Everything comes back to whether the demand is really there.
Anthropic thinks it is. The got the demand / datacenter match right in Q2, got great margins, and committed hard.
They've got:
- $114b committed to Google
- $110b committed to AWS
- $161b committed to Broadcom
- $120b committed to SpaceX
If the party continues, they'll go from $50b in revenue to $500b and be fine.
But if they don't, it's going to hurt. And that's their only choice, because otherwise, they end up with a frontier model and 50% of the capacity and get eviscerated on either availability or last-minute datacenter leases.
It's a big business, but it's not an easy business.
These commitments aren't annual though, most of them amount to 10 billion a year commitments for 10 years. Put another way Anthropic has committed 52 billion dollar a year to these companies and their S-1 indicates they earn 67.2B a year in revenue.
I'm not going to predict whether Anthropic succeeds or fails, just that it's very misleading to claim that Anthropic needs to grow to $500b in revenue without making it clear that it's $500B in revenue per decade rather than $500B in revenue per year which is what most people reading such a number would assume.
Thanks for clarifying, that’s a huge difference. Obviously they will have other revenue sources, but will likely make a small portion of their revenue. If we approximate their growth rate by these numbers, it is quite a slowdown.
You're right that my numbers are imprecise, but I did mean $500b in revenue annually.
This is just the compute, which primarily covers training + inference. They still have to run the rest of the business. If you think AI should look like SaaS and spend 10% of their revenue on compute, that's $1T in revenue. If you think it's a hardware business, that's 30% margins and perhaps $200b in revenue. I went with something in the middle at $500b.
They won't disappear as a company at $200b in revenue, but I don't think that's their aspiration. These commitments imply to me that they're confident they can do much better.
> Put another way Anthropic has committed 52 billion dollar a year
Idk where you got this figure from, but the actual figure are very different from that:
It's 120B over four years for SpaceX alone and 120B for Broadcom over 6 years. These two players, representing less than half of the total commitment, already give you an annual commitment above 50B.
Good point. Although they also need to make a profit. To justify an eventual PE ratio of 25 and a current valuation of $1 trillion they need to make an annual profit $40 billion. And then lets assume $40 billion in other expenses. So they need revenue of $50 + $40 + $40 = $130 billion revenue annually.
But if you buy them today at a $1 trillion valuation, and they only make $40 billion in annual profit, your investment will go nowhere. They need to be growing profits at 20% per annum to justify a PE OF 25.
And then you have the competition problem. The cheap open weight models are good enough for many (most?) tasks.
And then you have the problem that LLMs may not be that useful outside of programming, customer support and law (and doing homework).
> Put another way Anthropic has committed 52 billion dollar a year to these companies and their S-1 indicates they earn 67.2B a year in revenue.
A very large part of that revenue is paying for inference. There’s not enough leftover for the committed outlays. So it has to come from smucks I mean investors.
Meanwhile the Chinese are going to undercut them every chance they get.
Today's prices are the ceiling. But AI capability is getting less of a scarce resource with every passing day and it would be a big mistake to plan that your current margins are going to be your future margins as well. Long terms AI will converge on energy costs + capex write-off + margin and the latter will be a race to the bottom.
The problem for me is that it's really hard to project what this industry is going to look like 6 months from now, let alone 6 years.
What's the endgame once the dust settles? Is it going to be a utility like water or electricity and the cheapest offer will prevail, in which case margins will be crushed? Or is Anthropic (or some other big AI lab) going to swallow everything and become the Google Search of LLMs, with everybody else fighting for scraps?
Or is it local compute, models becoming more efficient and hardware becoming cheaper (again) and companies hosting their own AI clusters like they would run SAP?
I think there is a plausible path where this valuation actually works out, but it's a narrow one IMO. I also want to acknowledge that I personally would prefer if it wasn't the case and a more distributed, open model prevailed.
The Chinese labs are not providing their open-weight models for free because they think it is good for humanity. They are doing it because they are severely chip constrained due to the Nvidia and ASML embargos and all available GPUs have to go toward training with very little left for inference [1]. So they are giving their models away for US and EU hosts to serve inference in order to still have a presence in the market.
It's not a great position to be in and it will still take a long time for the compute gap to close. In the meantime, Anthropic, OpenAI, and Google are essentially unchallenged.
The online crowd harping on about Chinese models is disconnected from reality imo.
I won't use a Chinese model. Why would i bother? I pay $100/m for the frontier model, understanding it's marginally better than much cheaper alternatives. I get so much value from the product it's not worth shopping around
Think of it like apple and android. Plenty of people pay 2k for their iPhone every few years when android at 1/4 the price is just as functional. Why? Because they get so much excess value from the device it's not worth shopping around. For most people it's their only personal computer. From booking airfare, to filling out their kids permission slips, it's a device they use 10+ hours a week. They don't bother, until a paradigm shift happens and something is 10x better than the iPhone. I imagine llms will follow the same trajectory
I think you’re right - it’ll be interesting to see how the behemoths navigate when new and cheaper memory manufacturing capacity comes online. Currently predicted to happen starting 2028. That is where most of the current hardware costs are concentrated.
On that front, I think DeepSeek is a dark horse. They are really odd - not chasing revenue, care more about unit profitability, are obsessed with driving down costs (like Elon back in the day). As the founder says, they are content with where they are, being the model that does 80% for a fraction of the cost.
I mention them because they are playing a different game and might be able to out-innovate everyone else.
Anthropic is not in the model business. They were smart and they are building productivity ecosystem business. Look at what claude artifacts are doing now -- inline multi-user editing, comments that users and/or models can respond and take action on, import/export from all common formats. It's at least a Google Docs killer if not an M365 killer.
And claude code as a harness and skill/plugin/mcp ecosystem is far more valuable than any one model.
And coward for long-running tasks, though they're slipping on that one because they're really trying hard not to make Claude an assistant. We'll see if they react to Muse and change course.
But the Chinese free-weight models? Not a competitor. If/when those companies (or others) build vertically integrated productivity stacks on those free models, then we'll talk. Microsoft certainly saw that opportunity but couldn't get out of their own way and are basically roadkill at this point.
Are today's prices actually the ceiling? OpenAI added a $500 tier pretty recently while lowering capacity for their $200 tier. I wouldn't be surprised to see Anthropic doing something similar soon, particularly once they are a publicly traded company beholden to making shareholders happy.
Even outside of the Chinese models, Amazon, Google, Microsoft, Meta all of them are offering significantly more coherent and competitive internal models and reasonable price.
Cloud compute has managed to have pretty good margins. That seems like a really similar business model to what Anthropic is doing - inferene+value-adds as-a-service. Why wouldn't they also be able to get cloud level margins or a bit higher?
Already well documented that there is huge variance in inference serving efficiency; at every layer (model, software, hardware) you have opportunities for gains. Similar to how “the Chinese” haven’t undercut on cloud providers’ CPU offerings, there’s a very good argument that the hyperscalers will manage to keep their vertically integrated hardware/software edge here too.
I don’t really know where this commodification idea came from, maybe MBA types that don’t actually understand how cloud economics work, applying basic first principles analysis?
The operational engineering that goes into serving a frontier model is _highly_ nontrivial, it is not commodifiable. This isn’t a SPA application.
Today’s prices are a ceiling for today’s capabilities, but not at all a ceiling in general. One could imagine dramatically higher spend for dramatically higher performance.
That depends on whether "frontier" models can maintain an expanding frontier. If the frontier settles, they're dead, and it will be commoditized. Otherwise, there are still plenty of pathological behaviors of these things to address that will keep expanding that frontier (if that's possible and the limitation isn't the approach itself).
The reception of saying things like this is interesting. AI stans think I'm way too pessimistic but AI haters think I'm mindlessly optimistic.
there is no point of saying 'the chinese'
everyone will do it because it was proven that any political frills might cause an attempt to damage your system.
I dont know when, but i think if you keep menacing of taking technology of people hands for any political reason will be a reason for people to not use it or to rely in a more reasonable party.
I don't think today's prices are the ceiling, considering they are subsidized. Once businesses have grown dependent on AI (and their institutional knowledge is lost), they will pay much more just to stay afloat.
Unfortunately it's now extremely likely that our governments will manipulate markets to keep frontier domestic AI afloat. They are financially and militarily dependent on domestic AI now.
Chinese models are being banned, will continue to be banned by USG. Even the Chinese govt is restricting external access to models now. It starts with banning Govt access to International AI, but will continue to consumer and business access.
> Meanwhile the Chinese are going to undercut them every chance they get.
I wish they were, but I always wonder when people chime in with Chinese models what they are actually doing with those. I have an OpenRouter account and give various models a shot every other month, wishing for an alternative, but I always come back to Claude. Even more so since the switch from Opus 5.1 to 5.5. To me, personally, it's unmatched. Like a year ago it was very different, and I would use other models all the time. But honestly at the time they all felt kind of "meh" still. I just hope everyone is at a good baseline in a year from now on, so I actually have a choice. And then, as you stated, things will get interesting.
the market for their valuation is just not there imo. they need to significantly expand into non-coding products and outshine their coding offerings to make it work.
as in, if they capture every single professional software dev and extract $1000 from them every month, their yearly revenue will be like $500B. do your own back of the envelope on that with ongoing costs and consider how unrealistic a goal this actually is.
even worse, the very product they offer is self limiting. if it becomes so good as to actually replace software devs, they will have less customers to extract money from.
their valuation essentially relies on a small percentage of mega users having unheard of levels of spending.
the part about a small percentage giving them most of their money is already true (their rumored $100+ bil revenue as of mid 2026 already outshines all software devs having a $100 max subscription), but they are two orders of magnitude or so away in terms of the actual amounts to make it work.
>as in, if they capture every single professional software dev and extract $1000 from them every month, their yearly revenue will be like $500B. do your own back of the envelope on that with ongoing costs and consider how unrealistic a goal this actually is.
The market for Claude Code is much bigger than professional software devs. It's really anyone who uses a computer. I already know normal people who have been using it for personal software.
I agree, I would say $500 billion valuation is fair, they don't have a moat and open models are catching up, they have a limited products with strong competitors, if they have a step change model in the pipeline now would be a good time to release it.
>the market for their valuation is just not there imo
I tried to look for the valuation in the linked document, did you see it or any reference to a valuation elsewhere in anything published by Anthropic? what is "their valuation" that you refer to?
Comments here are not considering what Anthropic is doing with Claude as a product. The models matter, yes. But they are building Claude into the only tool you need to get business done. In the past few weeks they have added slides and docs - a shot across the bow to Microsoft's dominance. If they can pull off building the best interface to get work done, $500b in revenue starts to seem not too crazy. It's more about selling a complete product than it is about selling tokens.
I somewhat agree to what you said, but also, the whole point of agentic coding is that "code is cheap". So I can't imaging companies like Google not having the resources (whether human or token) to build a better agentic assistant/harness than what Anthropic can. I mean Google has a pretty good starting point with Google Docs, etc.
Yeah I’m really surprised at how little attention this is getting.
I’d say it’s more Notion than GDocs for now, but the direction is clear. Gobbling up all the SaaS in order of descending value to agents.
My bet is on promoting their internal Tasks representation to something more like a Jira/Linear.
But then obviously Slack is another one, and Duet is already starting to build a “Channel” abstraction, so making Duet multiplayer is a clear possible next step.
Opus 5.5 is the frontier today. But there are more ways for Anthropic to lose than to remain in that position. I'd take Anthropic stock if you gave it to me but I sure as fuck wouldn't buy into it.
The tool is not a moat when you can tell Opus to build you a better tool.
If you owe the bank a million dollars you have a problem. If you owe the bank a billion dollars the bank has a problem.
The same logic applies here.
Google, Amazon, Microsoft, Meta, Broadcom, Nvidia, SpaceX and others are spending hundreds of billions a year each on fast-depreciating infrastructure to serve this potential AI demand. If the demand never materializes then they know they are in big trouble. So they have every incentive in the world to prop up Anthropic (and OpenAI) and keep the party going.
Can they keep the bubble inflated indefinitely? Probably not, but all these companies combined have heck of a lot more influence than Anthropic alone.
They aren't "fast-depreciating infrastructure" -- research shared by a16z team, rental rates are up across the board, even for GPUs that are 5+ years old. The demand is real right now. The proverbial tide could go out but we aren't seeing it yet.
I have a hard time believing they are likely to get to $500bn in revenue. That’s another $450bn in revenue growth that needs to happen before demand tapers off.
But I see every reason to believe demand will taper off. It seems it’s already happening. Enterprises have been deciding that maybe corporate chatbot and coding agent budgets shouldn’t actually be infinite. AI startups are starting to successfully outcompete each other, effectively killing off members of Anthropic’s customer pool in the process. And consumer demand for AI products seems to be dropping. None of these are signs that suggest that Anthropic has thus far met only 10% of plausible long-term demand.
Total global wages ~$12 trillion/year. The "what you have to believe" here is that AI tool spend becomes at least 10-20% of it, my belief here is we see net slowdown in hiring as human + AI = super productivity so as businesses grow we'll continue to see increase in AI spending.
Then if inference does grow to a $2-3 trillion/year market that Anthropic is a big winner, as big as NVDA is now (they're going to be over $500 billion in revenue in calendar year 2027).
> Everything comes back to whether the demand is really there
And unit economics.
HY1 2026 revenue less compute and infrastructure turned positive (45% gross compute margin; $8.9bn C&I to turn $16bn revenue) for the first time; it was -176% in FY 2025 with $7.3bn C&I on $4.6bn revenue.
It looks like a lot of costs of revenue are in sales, marketing and partnerships, though. Backing those out shows H1 2026 margin at 26% ($4.2bn) after -72% for FY 2025. Still positive.
> they will keep doubling down, because stopping is simply not an option
Of course it is. Apple is taking that strategic approach. If Anthropic believes it’s approaching saturation, pulling the plug when it’s at steady state and its rivals are over-invested is the winning move.
These were ~Q1-Q2 commitments based on what Anthropic THOUGHT token maxed compute demand was going to be over next few years. Then Late Q2, and Q3 PRC models dropped floor for token prices. It may very well be that Jevons demand which Anthropic though required 500B of compute now only requires 100B, and unless demand is 5x what they thought, those additional 400B non hardware cancellable commitment are going to be balance sheet concrete shoes.
Marcello Mastroianni is performing a bank heist, it goes well - but in the end he has to return all the money he borrowed. And that's where he is left with nothing...
The OP post is misleading because it makes you think Anthropic has to earn 500bn per year in revenue, but those commitments listed are not yearly commitments, they're commitments over 10 years with contracts that run until 2036.
Anthropic needs to earn 52B a year in annual revenue to honor those specific commitments plus obviously its own operating expenses... and yeah that will require Anthropic to grow as a company, but their S-1 indicates 67.2B a year in revenue and sure maybe they stop growing and this is their peak... or maybe they do manage to grow further to 80B a year, 90B a year...
You know how they say, don't keep all of your eggs in one basket? It's really concerning to me that they've got all their eggs on LLMs. They really should have branched out more long ago. OpenAI has a lot of branches they can aim towards.
The SpaceX thing interests me. They are basically paying SpaceX at a $10B per gigawatt equivalent rate right now, yeah? Because they only get 0.3GW for their $3B.
So what that means is that if the demand exists for any AI data centre, it's a solid business to run one — they cost maybe $50-60B to build out, they cost maybe $10B per year to run. You get your money back fast if the demand is there? And you can project being able to replace with better GPUs in the future without having to borrow for all of it.
But it is extremely difficult to believe that Anthropic is not projecting that all of its customers will ultimately use their service to the extent that their outlier customers do right now. They probably won't be projecting that their customers will find the need or ways to use them less.
And also, "no customer is more than 10% of our revenue" means that one customer is. If that customer is Microsoft (can it be? I honestly don't know) then things get tricky, because Microsoft clearly want an unmetered, on-device AI future.
Not just is the the man there? Will anthropic be able to capitalize on that demand? Or are we going to build so much excess capacity that tokens are going to be dirt cheap (like what happened with the fiber build out in the 90s).
Will anthropics models continue to be significantly better than openweight models? Even if their latest model is, Will the open weights gobble up all of the demand for lower models? (I.e. will anthropic be able to recoup training cost while their model is the best, will they make enough revenue on the long tail or will it get crushed by the open weights)
In the corporate world it seems Claude has become like a generic name for doing anything AI related and there is no hope in getting people to switch away. The demand is there. People love name dropping Claude into everything and even assuming it’s what everyone uses to do anything even when there’s so many alternatives.
Crazy that SpaceX has similar commitments to AWS/GCP. Means it’s very bullish for SpaceX given they produce their own energy turbines and have the best ability to deal with supply chain constraints
For kicks - lets take the optimistic side here (because the whole thread will be reading pessimistic). What if they are under built and this growth continues to go parabolic. We then still have supply constraints and pent up demand for frontier model and you have a company thats currently at 1-1.5 T and levels up to 4-5 T.
I'm not saying I think thats what is going to happen, but it really isn't a stretch to think that this keeps running given that it hasn't really hit anywhere near as broad as we think it has (being HN community based).
Even the smallest margin or error in the demand forecast will put them at a huge loss, I can't imagine sleeping well at night if I was on that management team.
The obvious business is rewriting all of our software. That sounds flippant, but I'm entirely serious. I'm of the opinion that all software written by humans will get replaced and in pretty rapid order.
First to fall is the software that has basically been abandoned but industry leading and has sticky customers. We're replacing those right now. Our version is more accurate, ten times faster, and a hundred times cheaper.
> If the party continues, they'll go from $50b in revenue to $500b and be fine.
You really have to be insane to think that an AI company will ever reach $500B in revenue. That's almost the same as (2025) Amazon, Walmart, etc., companies with a MUCH wider market.
It is MORE than Apple, it's 5 times more than NVidia even. There is absolutely no software seller that is even remotely close to $500B in revenue.
I’ve spent more money on Claude this year than I’ve given to a lot of other tech companies, combined. Well, I bought a new phone too - but amortised over the phone’s lifetime it’s still much cheaper than I’ve spent on my claude subscription and what I’ve gotten my company to pay in api usage credits.
There are two questions. Will the value keep scaling? And how much of that value chain will anthropic hold on to? Right now software development is being eaten alive by LLMs. Will that happen to other industries too? And in the long run, what do the models we run look like? Are people going to end up self hosing opensource models themselves, or are we going to collectively hitch our wagons to frontier models provided by anthropic and their competitors?
If ai keeps getting better - which I think it will - and if anthropic can corner a large part of the market in an enduring way - which seems less likely to me - then yes. I can easily imagine them becoming a huge company.
The thing to be remember about those companies you listed, none of them are software companies like Anthropic is.
* Amazon is a logistics company
* Walmart is a logistics and retail company
* Apple is a hardware company (that uses software to set their hardware apart)
* NVidia is a hardware company
The closest you get is Microsoft, at 281B in revenue. Some might argue Google/Alphabet, which is in the same area, but they sell Ads, not software.
Anthropic's expectations is that they will be able to fast-track their revenue generation to almost twice what Microsoft does today. In less than a few years.
I agree with you from our perspective it is ridiculous. I also agree that getting the consumer market to willingly pay for AI to the point where it sustains such an amount of revenue is not going to happen. (The knock on effects of folks using AI, and turning others off to AI because they used AI instead of writing emails themselves, for example).
But.
They may peak at 500B before this bubble bursts, simply because other major industry players are betting on AI as a means to get folks to believe in their own stock.
It’s belief all the way down, until you get to the point where “the market” starts asking where the return on investment is, and why they haven’t seen it yet. By that time, the investors have gotten their return and cashed out, and it’s the pension funds and the retail traders that are holding the bag.
And of course, at some point AI’s promise will be delivered in a form or fashion as yet unknown to us, but that is still years away, and until folks recognize that LLMs as they exist to day are not the path to that, they’ll continue to believe in this valuation.
What feels ridiculous today might be the normal of tomorrow. Welcome to the new world.
What you are saying is the same thing that has been said about anyone trying to do anything massive and at scale. Can't be done - thats ridiculous - you are out of your mind.
There are not enough revenue in tokens, etc. The only way AI ever becomes profitable is to replace labor everywhere. That is the only market big enough to make all the spend in AI profitable.
Their entire goal is to get to AGI via RSI ASAP. If they do they win. But if not they’ll be a legendary story of a flying too high too fast.
That they are IPOing tells me that the massive amount of funding they need is no longer available privately and that this is their 1 opportunity to get the funds they think they need to get there.
Biggest risk is the growth stalls as everyone moves to open weight models. They certainly like telling stories.
Of course such growth cannot be sustained and the word "MAY" is funny there. You cannot have infinity growth, it is mathematically impossible. There are no unlimited (monetary) resources on this planet.
It's a misleading number, the 500 billion in revenue is needed over a 10 year period, it's not a yearly figure. Anthropic isn't paying 500 billion a year for the commitments that OP posted, it's paying 500 billion between now and 2036.
This is the issue, for two reasons: Is there trillions of dollars of demand for LLMs, which is what it takes for Anthropic to make $500 billion in revenue? Is that demand going to be met by frontier cloud LLMs, or by open weight models run by the organizations using them (and cheaper cloud alternatives)?
The killer app is AI coding. Claude Code had first mover advantage, was a genuine revolution, and has diffused through the industry with incredible speed. I would imagine most of the huge revenue increase over the last year is due almost entirely to AI coding spend.
There are three issues with this. First, the rapid diffusion of the technology means it is very unlikely to continue at the rate of adoption seen over the past year, so it's very hard to extrapolate based on what we've seen so far. Second, many companies are reigning in AI budgets after an initial honeymoon phase. Third, all of the other labs are trying to take a bite of the coding pie, and the price war is already heating up.
Add these simple dynamics up and it makes perfect sense why Anthropic would want to IPO now. Things look about as good as they ever will.
View them as a successful SAAS company deeply embedded in tech company processes like Atlassian. I don't see Anthropic or SpaceX actually having a market on all the software in the universe but I don't know that the market won't buy them like they do.
My brother in christ, there is no first mover advantage. I use claude code daily and if the open ai copies it 1$ cheaper per seat my company is switching immediately.
I've never heard anyone in real life discussing what model is better in some benchmark. Money talks.
There are three mentions of “open source” and none of them mention open source models as a fundamental risk to their business. Interesting.
UPDATE: seems like it is under "open-source" and "open-weight". Woops. Will keep this up simply because I do think the OS (and infra-managed OS services) provided by Chinese labs is a considerable risk to the underlying business, at least with enterprise R&D.
Open source should not be a threat just like Linux isn't really a threat to Mac and Windows. It all depends on who will get the network effects first (if there even is network effects in LLMs).
People pay for windows because of its strong network effects eg Microsoft Office and countless software that run on windows. Even though Linux is free most businesses today don't use it on the desktop.
Opensource also means do it yourself and most businesses don't have time or expertise to do that, but this very issue creates a market for 3rd party providers that use open models to compete against Anthropic. So hardware and compute availability becomes somewhat of a moat.
The business feels like like web hosting before cloud computing. Web hosting in itself does not really have a moat, but than again AWS appeared with their abstractions created lock-in and network effects and disrupted the hosting industry.
Definitionally, from the product they claim to sell, you could just ask Claude to help you migrate to an open source model (if you have the hardware or if you are ok with a subscription) with very little difficulty in the scope of a single conversation. The product they're selling is capable of helping you stop using it. And there's very little friction to use other products too, unlike linux vs mac vs windows, where program compatibility is not as trivial (although with WINE, Rosetta, and WSL, it is actually decently easy nowadays). In this case, you're just calling out to an API with a harness. And even their harness is capable of using open source models.
I feel like it's different from all other cases because it's the first product which can literally obsolete itself, lol. It can show you the door and walk you through it if you ask it to.
The network effect is way weaker for LLM's. Switching from AWS to GCP or Azure is at least a multi-month project for an engineering org, if not completely operationally impossible. Switching LLM providers is at worst asking your engineers to install a new coding agent client, and at best switching a URL and API token in your config file.
Regarding moats: it's been said by everyone else, but it doesn't seem like Anthropic has a moat. Everyone can easily switch from Claude to Codex, OpenCode, Pi, or any of the other zillions of harnesses. They can even have Claude do the migration for them if they want and it will oblige – that's what I did when I canceled my Claude subscription.
The idea that hardware and compute is their moat is interesting, but open/local models become more capable each week. As I write this, I have 3 instances of some no-name model working on 3 separate worktrees on my M1 Mac Studio. It was viable for me ages ago, and I'm not an AI enthusiast (I just happened to have bought a Mac several years ago that can run these models). I haven't paid Anthropic or OpenAI a cent since the early part of 2026.
Ant generates $2.08 in revenue for every $1 spent on compute which is up from just $0.40 in Q1 2025.the payback period for compute is just insane, likely less than a year!
Say I open a premium lemonade stand. I buy Walmart lemonade for $1 and resell it for $2. I have around 10 customers a day, but 2 of them buy 1,000 litres of lemonade each. The rest just buy a single cup. I'm making amazing profit.
There's just one detail: those 2 high-volume customers are buying my lemonade and re-selling them at a loss for $1 at another neighbourhood. Supposedly some high-profile Japanese bank is financing their lemonade purchasing expenses for eye-wateringly high interest rates. I've heard its well into the double digits. But that's not important, because the future is right around the corner - I can feel it - and in the future everyone wants lemonade. Thousands of litres of it. So even if those two customers go away, things will be fine!
It will all work out in the end. This is a totally sustainable business model. In fact I'm even thinking of going public.
First of all, revenue exceeds compute just for the most recent 2 quarters. Before that, revenue was not exceeding compute. With 500 billion $ in commitments over the next decade, the compute bill will start increasing rapidly and the new commitments are not at the old prices, they're at higher prices.
Second of all, revenue is not profit. So even if they made 2.08x revenue on every 1$ of compute spent in Q2, that's not taking into consideration all the other costs. Hence, the operating income is still negative for 2026 so far.
You can bet that revenue will keep increasing much faster than the more expensive compute commitments come due, but if that doesn't materialize, things go south real fast. Anthropic is going public with a deficit, so more liabilities than assets, so cash is tight to begin with.
I'm not really in that camp, but I'm still in the camp of "will they survive long-term if good enough open models trickles down to commodity hardware" (in a way the opposite camp perhaps?).
Sun made bank 25 years ago because their servers was needed for websites, today we run larger workloads on 5$ VPS servers (well maybe the VPS servers has gotten more expensive due to HW shortages but they're not intrinsically expensive anymore).
Subscriptions are heavily subsidized. 80% of their revenue comes from consumption-based pricing, which is not heavily subsidized (and probably not subsidized at all). The trouble is that this revenue is not especially reliable. If and when OpenAI gets the upper hand again, the consumption-based revenue could crater.
This may also be why OpenAI punted on their IPO: Anthropic has had the lead for most of 2026, so their consumption-based revenue is probably not looking pretty.
A podcast posted here recently had this number: 80% of ant revenue comes from just 8 customers. The consensus of the speakers was that if true, this would be indicative of a very vulnerable revenue structure. But this was based on leaks. Maybe we can have the real numbers now?
It's interesting to note the anthropic marginal cost of compute is quite high (the SpaceX deal). Claude estimates SpaceX are charging 3x as much as the anthropic average! If that is correct then a few interesting things are going on:
1. Anthropic are probably losing money on the SpaceX deal or not making much at all.
2. To be willing to pay a spot rate so high anthropic likely have no better options.
3. Many of the existing cheaper vendors are likely doing "we will give you cheap compute for now if you give us big commitments"... (cf. hyperscaler capex spends)
Which I suppose is to say that if the spot prices are in the same ballpark as future costs then anthro stops looking profitable pretty quickly. If you're especially bearish you can also throw in the huge reduction in token prices recently and that SpaceX is charging google almost 2x as much as they charge anthropic!
Happy to be corrected by someone more knowledgeable.
my thesis is that it will go down and not up over time. The moat they had in coding which is by far the highest token consumption is not that huge compared to Nov-Feb period where token maxxing was prevalent and no other vendor's model was that good.
Less than a year would also match what DeepSeek was reporting, where compute pays off in just 10 months. I think they also said they had an 80% margin on inference.
Assuming computing costs do not go up and revenue per customer does not go down.
I think the 500 billion $ of compute commitments are at higher prices than what they've been paying so far. Would be a shame if a price war between the AI labs intensifies at the same time.
It includes compute and infrastructure for R&D. Then you have to add just over a third of their compute spend for personnel, another expense of that size for sales and marketing, and half that for other admin/ops costs, for an operating loss of 693M. Then a bunch of accounting stuff to end up losing 80B
I'm not sure I'd call it a great result, but it's a promising one. If they can increase demand without significant changes in margin or R&D spending, they are on the path to becoming very profitable
Impressive, but probably based on depreciation servers over 5 years. But is that realistic? I wonder how many people are still using 5 year old servers in their AI training or inference.
In the open weights scene, it is always chasing closely behind. Many leading edge big open models are trained in-part with distillation of large commercial hosted models.
Seems like that would imply you should be getting people to adopt now now still even if it costs a stupid amount, if you think it's valuable, rather than limiting token budgets. It'll only get cheaper over time.
$72 billion of this $80.7 billion loss consists of non-cash accounting charges— related to convertible debt—triggered by a surge in the company’s valuation.
That's sort of a paper loss though. E.g. they made an agreement to give X% of stock for something, and now the stock has gone up a ton, so that X% of stock is worth a lot more than when they made the agreement. For accounting reasons this gets parsed as a loss. But they're still "paying" that same X% of stock, so it's not cash out the door.
Maybe not great, but a good problem to have if it means your stock is skyrocketing.
> $72 billion of this $80.7 billion loss consists of non-cash accounting charges— related to convertible debt—triggered by a surge in the company’s valuation.
I don't think you understand what you quoted. The reason for that loss is because their valuation skyrocketed. If I promise you 1% of my million dollar house, and then the price of my house grows 100x. On paper, I now owe you .99 million more dollars than I owed you before, but that doesn't mean I lost cash.
> If the use of our AI models results in harm, whether through use by malicious actors or misuse by other third parties, or if our model guardrails or safeguards fail to prevent such misuse, our reputation and brand, business, financial condition, and results of operations could be adversely affected.
That shouldn't be an 'if'.
Then, two paragraphs later...
> For example, in September 2025, we detected and assessed with high confidence that a Chinese state-sponsored hacking group manipulated our Claude Code tool into attempting infiltration into roughly 30 global targets...
But they should mention when the calls com from inside the house. :D
Interesting to review all the mentions to China and Taiwan too.
> The majority of the world’s most advanced chip manufacturing capacity is concentrated in Taiwan, primarily at Taiwan Semiconductor Manufacturing Company [...] potential disruption from geopolitical tensions between Taiwan and China [...] Efforts to establish sufficient advanced chip manufacturing capacity outside of Taiwan, including in the United States, remain in early stages...
The thing the surprises me is that from a legal perspective, (NAL) it sounds like it makes sense not to host the LLMs. Merely to license them to others. Then it becomes a dual use tool like any other and their culpability drops.
For example, the huggingface hack is absolutely OpenAIs responsibility and they should be sued to the hilt. But if someone else uses a self or third party hosted anthropic model, they can escape liability (mostly?)
Same as with the argument over trucks, knives, and any other dual use item is used as weapons. you don’t blame the manufacturer.
(I am merely pontificating here. The law and precedent is nowhere near caught up on this)
To the extent they are representing that Claude is potentially sentient, there could be some VERY interesting principal-agent theories (agent in the traditional legal sense) that need to be ironed out to determine liability. It would not shock me to see someone forced to answer on the record as to whether Claude is an autonomous individual for legal purposes in the next couple of years. If they represent that it is, they'll have to explain the scope of its authority and such.
The answer to this question represents the difference between throwing a hammer at someone - the hammer is essentially just an extension of your body - and paying a hitman to brutalize someone. In the first case, you're only on the hook for assault or battery; in the latter case, you're potentially on the hook for conspiracy, solicitation, etc.
And then there is of course the question as to whether Claude is the agent of the user prompting it or of Anthropic itself. But, as you say, this is a wide-open legal question.
Not hosting a defectively designed product doesn't obviate the liability of selling a product that is defectively designed. The liability is for designing and selling a dangerous product, not for hosting it.
Because the AI company CEO was telling everyone who would listen that his product might end humanity if the government didn't regulate his industry to kill off his competitors.
I don’t like the guns don’t kill people; people kill people argument however it is much more accurate than Claude doesn’t hack people; people hack people. If the safeguards do not work then there’s no telling what these could do. It doesn’t even have to be aggressive hacking. In the act of doing everyday work Claude will happily go around safeguards to satisfy what it believes is the ask. If that involves doing something dangerous it’s much more on Anthropic than than the user who was just trying to summarize their email but forgot to include a token with read permissions.
If the user is held accountable when the AI goes wrong, it discourages too many applications. Blaming people is incompatible with the business goals, I think. That's very different from weapons and other dual-use tools.
Because of scale, potential for automating harm and lack of regulation around ML models. Even Texas probably has regulation around firearms and limiting the blast radius but there aren't any in the US against ML models.
I believe what they are singling out is that pulling Claude's trigger results in a bullet firing from Anthropic's servers. Liability is less confusing with firearms, and investors care about liability, like, a lot.
The analogy doesn't check out. When a firearm company sells you a gun, they give up ownership of the gun. But Anthropic isn't giving up ownership of anything. They're a services company.
A better analogy would be a firearm company offering a service where one of their employees takes one of their guns and fires it off at whatever you ask them to. One can imagine that the liability implications of this service would be rather different from the perspective of the company.
First off, this is bs. Firearm companies make small machines useful for defense, and they are used for that more than for harm. You wouldn’t make this argument about knives or baseball bats. More people die per year of heat stroke in Europe because of lack of A/C than by guns including suicide (2/3rds of all gun deaths) in the USA every year, your comments would never reflect this much lower hanging fruit if it was really “just life” preventable death that you cared about. The immediacy to attack guns is not a logical argument but a trained one based on emotions.
Second, this happens all the time that people blame tool makers despite in this case specific legislation to stop lawfare on firearm mfgs. The PLCA https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_... exists specifically because of gun control groups trying to attack mfgs to achieve their political goals. Does AI need the same law? Is the same lawfare happening?
So at the moment they claim to be making an operating profit if you exclude:
- Stock-based compensation expenses
- Non-cash charitable contribution expenses
Both seem fairly reasonable to exclude (although it depends how much of the stock compensation is for executives... you can't necessarily pay people with stock forever).
FMost of the loss is non-operating losses, and it all seems to be weird accounting recognition of changes in value of their stock, SAFEs, etc. - just "paper" losses.
So the financial picture looks a lot better than I would have guessed - I suppose because they aren't the ones investing all this capex.
If the stock comp is dominated by early grants running their course, probably ok.
If they have to keep spending to retain and recruit, it’s a problem. I’ve seen companies do this. Years after the pre-ipo grants ran out running a GAAP loss due to employee stock comp. Unable to lower comp (need to stay competitive).
and those charitable contributions probably include a bunch of marketing partnerships and their security work that would be very bad to back away from...
About a quarter of Anthropic's revenue for the nine months ended 9/30/26 came from just five customers. That's not an absurd concentration, but I would be very interested to know who they are and how mobile their business is. From a financial perspective, the lack of moat seems like the whole ballgame, particularly because they're getting ~80% of their revenue from consumption-based spending.
Moat? An under examined aspect of AI is not just the lack of moats, but the need for some word that connotes the opposite of a moat. I have a side project that I used to explore local AI. I've got a configuration screen that lets you download any model from Huggingface that's compatible with the local AI engine. There are dozens! I've only scratched the surface of trying them and comparing them for the features that use AI. It's a glut, and it's likely to be that way throughout the AI market.
Under examined? No. This is a very common talking point.
A glut of models doesn't mean there is no moat. There are several dimensions on which to compete, and it might turn out that being able to produce models that optimize on different dimensions is a difficult and valuable thing to do. It also might not, but the "there is obviously no moat" only comes from people who don't use these things systematically.
true, but it's also super easy to switch models via Bedrock (my harness switches subagents between A\, OAI, Kimi, Grok, etc... GLM 5.3 is locked behind some dumb request system which I personally believe is because Amazon is heavily invested in A\) and you're not locked in with the Claude Enterprise features (i swear to god if someone sends another claude artifact instead of publishing to git...)
At a guess - corpos like Big 4 consulting agencies and some extreme fintech ones, also corpos like Oracle and the like. And at another guess, outside of a legal agreement with a fixed time period, probably nothing hold them from quickly switching to a better model provider, if any comes ahead.
lets' just say there’s a lot of ways to hide things. primarily they have issued a lot of convertible notes /stocks to the people supplying their compute, which is not counted as costs of compute. There are also a lot of way to shove costs into sales and marketing - i.e. any free tier stuff given away to users are not counted in gross margins. their q3 numbers also not there. smells like they are desperate to get this thing out.
> there can be no assurance that we will be able to hire sufficient support personnel as and when needed, particularly if our sales exceed our internal forecasts
Why would they need support personnel? Isn't their whole point that Claude can do that
For first-level support that's just regurgitating documentation and debug procedures I agree. But when it comes to actually executing actions (resetting 2FA, issuing refunds, handling payment glitches, etc) you need humans.
Social engineering is an issue with regular support, with agents it's a lot worse. And with agents it's repeatable: if I find one conversation flow to get it to give me money I can instantly repeat that with a thousand fresh accounts, and then share the same "exploit" on reddit for everyone else
Support chatbots and other automated support mechanisms have been "regurgitating documentation and debug procedures" since the 90s, if not earlier.
If frontier AI deployed at frontier labs is not capable of "resetting 2FA, issuing refunds, handling payment glitches, etc." then the current and near-future capability of AI is being severely overstated.
14x YoY revenue growth, with 3x lower operating losses (total, not per unit). They don't need to add any zeros to the funding and seem like they might even be operating at a profit soon...
Wait, it fell from 140% growth to 45% growth and that's a good thing? If they fall to 15% growth in Q4, will that be even better? Where are we supposed to be on the adoption curve?
Roughly a week after Dario has rung the bell. Note that the growth in absolute sense hasn't peaked yet but the curve itself is already flattening and everybody with some sense for stock prices will read that as a very relevant signal.
The party that wins here is NV, Anthropic, not so much. But that's good then Dario and his sister can go back to improving the world. Let's hope they take Altman with them.
My main thing is - why would I buy their stock at the rumored valuation? Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over the world.
If you could go back in time and buy $1000 worth of Amazon when they IPO'd, it would be worth 3.3 million today. Because Amazon's stock value has grown on average 30% year over year for 30 years. Amazon's valuation when they went public was around 400 million.
How much can Anthropic reasonably grow from a 1.5 or 2 trillion dollar valuation? If we want them to grow even half as much as Amazon they'd have to be worth 5.9 quadrillion dollars by 2056. That's 5,900,000,000,000,000, a 16 digit number.
IPOs used to be necessary for growth but that hasn't been the case for many years. Private markets are now so large that the only purpose of an IPO is exit liquidity for employees and early investors. This change has been a major driver of inequality in the states and there are a number of proposals to make it easier for the public to participate.
It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc. are the ones who capture all of this growth and not the public, as would have been the case in the previous generation.
One might ask why the public markets would even offer this liquidity. One important answer is that they are forced to via index inclusion.
So if you know an index buyer who takes satisfaction in staying above fooled-by-randomness active traders, remind them that that they are now the designated unload zone for shares the privates don't want anymore.
In many ways investing in a very late IPO like SpaceX, Anthropic, or OpenAI is the worst of all worlds for the public investor.
On the one hand you'll never see a 100x return – that's been captured by private equity. But there's still a lot of long-term risk because these companies haven't proven they can deliver free cash flow to justify their valuations. Investing in SpaceX or Anthropic at $1T valuation is very different from investing in Apple or Nvidia.
They're not really a "good investment" unless they are literally worth more than combined GDP of the entire planet, multiple times over. I don't think I'm buying shares of Weyland-Yutani here, but they sure are acting like it.
Good point - in a way, if we get AGI, investors have financed the way to their potential undoing.
The term singularity is worn out, but the physics parallel is quite apt - a point where the known gears of economics stop working, and it's unknowable what's there until you get there.
What if, here me out, you got to share in the profits of the companies you buy shares in? Let's call those payments "dividends". Theb it doesn't matter how much shares go up in value.
Maybe I’m naive but I expect any kind of “we’re just taking over the world now” event with any AI company will be met with enough resistance from 99.99999% of the world’s population that they’ll have to make it a sweet deal for us if they want to survive.
> Amazon's valuation when they went public was around 400 million.
This isn't just an Anthropic issue, but more and more of the upside of companies have been captured in private markets prior to IPO for around the last decade. This is a consequence of so much money floating around, that IPOing is now the last stop on the train instead of one of the early/middle stops where a company actually needs to raise money.
This is more of a critique of a broken IPO market and the rise of availability of immense private capital. The public are denied access until the private markets are essentially tapped out.
IPO returns have been horrible for years. Past 5 year returns on S&P is ~80%, on NASDAQ 100 about 100% while IPO's have returned 10-15%.
IPO returns for IPO buyers who hold past lockup expiry, yes, it's been really bad.
Biotech IPOs are even worse. There are 5-year segments where only about 1 in 40 biotech & pharmaceutical IPOs trade above their IPO price at expiry.
On the flip side, in biotech, biopharma and SaaS, 2025 IPOs had nearly 10x the valuations of 2015 IPOs. So you may trade below expiry, but the structure of the earlier deals you participated in, you make way more money anyway.
Can it be anything but, to put it crassly, 'exit liquidity'? The IPO _is_ the reward for effort of the past few years, as opposed to a motivator to grow and scale for the next few years.
> My main thing is - why would I buy their stock at the rumored valuation? Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over the world.
I didn't buy Amazon in the early '00s for this reason, and I won't buy Anthropic for this reason. Maybe I lose out, but I like to invest in stocks that look like good investments.
Regardless of how you felt about Amazon as an investment when they went public my point is - they actually the potential to grow as much as they did. I don't believe Anthropic has the potential to grow even a fraction as much.
The problem with your reasoning is that something can be a good investment and not have the growth trajectory of Amazon. You can't pick the (more or less) maximum growth example and then say anything less is a bad investment. Anthropic doesnt need a 3000x return. They need to beat alternative uses of that money.
Your argument that it's overvalued isn't really tethered to anything. It's about as whimsicle as the people saying "well it's worth any price because AI is the future." Of course the price matters.
Here is some way to start thinking about it. A lot of mature companies trade at 20-25x times earnings. So $2T needs roughly $80–100B a year in profit eventually. At 25–30% net margin, it means about $300–400B in revenue (something like Microsoft). Or 20%/450B (Google) or 10%/800B (Amazon). Anthropic is still growing rapidly. And intuitively i don't think it's crazy to suggest they may look like one of the current big tech companies in the future.
>Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over
Absolutely not. Not even close to true. They dont even need to become the biggest company.
Ok, but I don't want Anthropic to be worth 2 trillion. Because then I'm just breaking even. I want, lets say, 5x that. I don't think anyone would buy it for only that - but even at 5x they need to be making $400-500B a year, 3x what Microsoft is currently making.
It’s a great question. It’s a rational line of thought. However, the market can stay irrational longer than you can stay solvent (if you were planning to go the opposite way).
Jack Clark (says that he) thinks that US GDP could grow by 50% by 2030 [0]
> Speaking at the 2026 Per Jacobsson Foundation Lecture during the IMF and World Bank annual meetings in Bangkok, Clark pointed to an extreme economic scenario modeled by Anthropic economists in which U.S. GDP could reach roughly $44 trillion by 2030, which is a nearly 50% increase from the current $30.77 trillion in just four years.
If the total value of US public companies also increased by 50% in that time, they'd collectively be worth about $112T. I guess Anthropic could be worth 10% of that in some scenario? And if we're in that world probably capital has increased a lot faster than labor so US public companies could be worth like 150T or something. Who knows. Nothing about valuations makes sense any more, so what's one more drop in the nonsense bucket.
who gives a shit what Jack Clark thinks? I’d be shocked if anyone at Anthropic did. In an industry full of grifters and leeches you’d be hard pressed to find a bigger one.
People said similar things about facebook, and similar things about Nvidia stock recently (not ipo, but similar "why buy at this price"). Global GDP is over $100 trillion every year, there is a lot of business to do in the world, AI might be able to do a lot, it might be very profitable.
The number might be too high, but doesn't take more than a little imagination and some basic facts about the world to see how it could be worth 20 trillion in 10 years.
Don’t worry AI will tell us how to time travel, you can get your AMZN no problem or just a sports almanac from the future… infinite growth if you can travel into new dimensions :-/
I'm not suggesting you invest necessarily, but I'll give you the counterpoint.
Amazon would have gotten you rich, but it wasn't there when it IPOed. Anthropic is growing fast, at 4.7B, 11.6B and 16.7B last 3 quarters.
I think people want to believe that AI will be both productive and replace traditional search / ad revenue, which would give it a solid standing for valuation...
To be fair, if you told Amazon investors in 1997 that their investment would go up 3,300x and Amazon would be worth $2.7 trillion in 2026, they’d have called you insane too. There isn’t a mathematical reason Anthropic can’t be worth that in 2056. I don’t think it will be, but not because of the compounding returns.
Einstein once said “compound interest is the eighth wonder of the world.” It’s very hard for humans to comprehend compounding returns.
For Anthropic to show similar returns over 29 years, it would be valued at many times the current total market cap of the S&P 500. At Amazon’s current value after 29 years of growth, its market capitalization is about 1/3 the total market cap of the S&P 500 at the of 1997.
It’s quite hard to justify that in terms of future cash flows. At even a quadrillion dollar valuation and a 20x revenue multiplier, they’d need $50 trillion in revenue… or roughly 1.5 quarters of current US GDP.
So while mathematically possible, it’s quite improbable.
I think the strategy is to IPO with a massive valuation and a small amount of float and then hold the valuation long enough to get into a cap weighted index like the S&P 500. At that point investors can harvest the monthly inflows of global investors who blindly dump money into passive index funds.
The thesis here is that in the past short sellers would short sell overvalued stocks in the index and buy undervalued stocks and drive price discovery and that those mechanisms are broken due to:
- Passive index funds dominate the market and swamp the ability of active traders to drive price discovery
- Massive returns of these funds over the last 15 years have made beating the benchmarks difficult and leading investors away from actively managed portfolios
- The rise of meme stocks, options trading and crypto bro traders driving out hedge funds and institutional short sellers
- Stock tickers and crypto being seen as disconnecting from the US Treasury’s as an anchor for risk free returns to a “Snow Crash” model where assets represent a stake in a new world order.
Back in 2018, I sold a bunch of Nvidia stock. I had bought it in 2014, when deep learning was taking off, and it had gone up 10x since then. It was obvious that all the growth had been captured and it was time to get out. I remember feeling pretty smug about timing things just right.
Nvidia's market cap in 2018 was around $150B, and the largest company in the world was Apple at ~$800B. And part of my thinking at the time was, well... Nvidia is already worth about a fifth of the most valuable company in the world. How much can they reasonably grow from this valuation?
In hindsight, I can tell you: the answer is 35x (as of now, and who knows in the future). The idea that any company, much less Nvidia, would be worth $5T within a decade was laughable back then, and yet, here we are.
Nvidia going 35x from $150B doesn’t answer the parent’s point. Matching Amazon’s returns from IPO would require a vastly bigger multiple from an already much higher starting valuation. “People underestimated Nvidia” isn’t an explanation for how Anthropic gets to a quadrillion dollars. It can be hugely successful without giving IPO investors Amazon-like returns.
The reason to buy any individual stock is you believe it will outperform the market as a whole over N years. If you think all the growth has been captured already and Anthropic will stay below opening price + market growth forever then of course you shouldn’t buy it. But plenty of people don’t think that.
But why would we expect Anthropic to outperform the market over N years when they're opening at such a high valuation? It feels like most of the potential future growth short of world domination is already priced in.
I feel like you're treating the stock market like a horse race. Amazon outpaced the stock market by 3x over the last 30 years, and it's just incredibly unrealistic to make that the standard for buying a stock. Anthropic shouldn't be expected to increase any more or less than the rest of the market and that's if you don't believe there's a bubble. (A bubble is by definition when prices don't reflect actual value)
The only reason to buy this stock specifically is if you think it will outperform the market though, otherwise you're taking a more risky position with no upside.
Put another way, the risk has to be worth the potential reward - expecting Amazon-like returns might be unrealistic, but what level of returns would be necessary to counteract the amount of risk you're taking on if you buy Anthropic stock? And what kind of valuation would Anthropic have to reach for that to be possible?
It makes more sense if you only look at it from the perspective of personal finance.
If I expect Anthropic to perform as well as the market, I can lower my risk substantially and see a lot of its upside with the right mix of ETFs. It doesn’t make sense to take on all that risk if I have a much less risky path to the upside. On the other hand, if I expect it to outperform the market, it might fit in my high risk bucket. So from the perspective of individual investors, it’s about matching risk levels and returns.
If I was selling dollars for 50c and Nvidia, alphabet and Amazon giving me dollars for a piece of my company, my revenue growth would be the same. That’s what Anthropic is doing.
Hackernews commenters generally dont care about the Anthropic's financials because they have unassailable grievances.
At $2T Anthropic would need to look roughly like Alphabet today by 2030 for investors to earn a normal market return (20-25X earnings). That or similar baselines should be the basis of discussion, not if AI is overhyped, if it will grow faster than Amazon did, oligarchy(?), etc.
"Unless you have special insight, you should assume all stocks are equally good buys."
Lol maddest thing I've read all day
"priced in"
I smell your efficient market hypothesis argument, before you even begin just keep in mind that does not apply here, it's an IPO, the price is not set by the secondary market
I think the argument is that the valuation is so high because the enormous growth IS priced in, but still being far from guaranteed. Meaning there's only downside: if the enormous growth is realized it would be a wash for your investment since it is already priced in, and in the plausible scenario it fails spectacularly or only grows moderately your investment will lose a lot of value.
But in the past, rules & regulations basically forced companies to IPO at a certain size. This meant that when they IPO'd, there was still growth upside.
Those rules are gone now, so they can stay private and have all the growth happen privately. When they IPO now, it's more just an exit. The growth was captured by insiders only.
But those other ones at least have the room to potentially do that, even if most won't. So what GP is saying is that this is a magical stock indeed, but the other way around, in that it's magically capped.
For those who are not familiar with S-1: this document is incredibly important. this is one of the rare times in the life of a company where it's not allowed, by law, to lie, nor to omit the truth.
Technically true, but they're still fudging their numbers a bit even in the S-1, such as using "adjusted" operating margins to the tune of 10% when their GAAP (which they truly cannot lie about without ending up in deep shit (in theory anyways, I'm doubtful that they couldn't get away with it if they tried with the current administration)) is actually at negative -4%.
And where else in law is it allowed to lie or omit material facts?
It's a bedrock foundation of the entire financial and legal world. Public and private alike. Refer SEC Rule 10b-5 as well as Private Placement Memorandum (PPM). For example, Theranos never filed an S1 but still was convicted.
At the same time, an S-1 does not necessarily represent how the company thinks. Risk factors often get reported as “x thinks that y will happen” but the company is actually just describing things they have an obligation to describe, they’re not the risks they’re worried about internally.
Also this is being released under Trump’s SEC, who knows whether being caught lying in an S-1 matters any more.
Marketing, press releases, PR, and most of what the general audience will ever hear. Or as judges repeat way too often: "it's not illegal to lie, in most circumstances".
Anytime, depending on how much money it owes: if it owes a few million, it can't; if it owes a few billion, whenever it feels like it, commonly always.
Is it just me or is something wrong with the doc starting at the ToC? Its gets super garbled. Everything before that point is Anthropic branding and a Claude generated multi page wall of text
SpaceX claimed a TAM of $28.5 trillion in their S1, a number picked from a hat larger than the 2023 US GDP. Companies can and do lie in their S1 and there are rarely if ever any consequences for doing so.
It wasn't pulled out of a hat, it was the total addressable market for a space, internet, and AI company, excluding markets like Russia and China. All TAM refers to is the total market size, not their market share.
For context SpaceX's TAM is lower than Anthropic's expected TAM
Saying a market is X is not lying. Saying you have X revenue is lying. Saying you have a contract with XYZ company is lying.
Under the idea that 'you can make numbers say anything you want' you could very easily justify almost any number as a potential market as long as you include the conditions or stated it in a way to be circumspect.
> a hat larger than the 2023 US GDP
Would be more accurate to mention the entire world GDP to support that argument. Then the issue is raised as far as what time period they are referring to. Current year? Future years?
At this valuation this is a very risky investment because the current price already accounts for future growth, so there is very little margin for safety or meaningful upside left. The sole purpose of this IPO is for early investors and employees to cash out. I wouldn't touch this stock with a 10 foot pole.
Other stocks have routinely priced in future value and the market has forgotten. Uber and Tesla both priced in full self driving cars. No talks about that any more, barely a thing.
>Anthropic employees and early investors will be able to sell their shares on the first day the AI firm begins trading, followed by several scheduled dates in which IPO lock-ups expire. This phased approach deviates from the traditional IPO process, in which insiders are unable to sell their shares for 180 days following a company’s Wall Street debut.
>Under Anthropic’s staggered lock-up schedule, workers and insiders will be able to sell an unspecified number of Class A shares as time passes after the debut. The lock-ups open 27, 48, 62, and 76 days following the IPO, the filing explained.
Feels like being asked to invest in IBM just as other manufacturers started releasing the first PC compatible machines.
Immediate term Anthropic, OpenAI rule the roost. But this is a very new technology and open models are already looking good. They’ll only get better. Is it realistic to think Anthropic will stay ahead of them enough to justify the valuation they’re asking for?
People have been saying the openweight models would collapse anthropic's revenue since the deepseek moment in January of 2025. They've stayed ahead in model intelligence and increased revenue by a lot since then.
Not saying it couldn't happen in the future, but we've got to be circumspect about that narrative after almost 2 years of it, no?
January 2025 isn’t even two years ago yet. When you’re talking about giant companies going public you want to be looking at significantly longer timescales than that.
this time last year my bet was Anthropic and OpenAI would go bankrupty. Msoft would get OpenAI and Google would get Anthropic and that would be that. Now i'm not so sure, if you think about it, the past 11 months have been pretty crazy in terms of LLM progress. In my eyes, coding agents didn't really begin to make a serious impact until maybe Dec 25 or Jan 26. It's not even been one year since that moment.
Idk what 2027 will bring but i've been pretty wrong in my predictions so far and so am excited to see what unfolds. I mean it could unfold as a zombie apocalypse but at least it's different than "more of the same".
Or are they AWS after launching S3 and EC2? Model companies have a credible path to building platform value. It's too early to assume they can't execute on that.
The fun thing about this is even if you ignore the SAFE & etc fair value changes, Anthropic still lost ~8 billion in 1H 2026.
Given that their Q3 sales numbers didn't grow by much, and that if they can't get Congress to both order a halt to the production of new LLM-based tools and either tightly restrict "open weights" models or make them illegal [0], they're going to have the dual squeeze of the ever-increasing R&D costs needed to build the next big LLM-based tool and ever-reducing revenue as more and more businesses notice that they get decent results with something they can host on-prem... and the only cost to the business is hardware that they may or may not already have and the power that they're likely to be already paying for.
[0] ...illegal because "China Bad And Scary", naturally...
"If we fail to adequately protect our intellectual property rights, our competitive position may be impaired, and we may lose valuable assets, generate reduced revenue, and incur costly litigation to protect our rights, which may adversely affect our business, financial condition, and results of operations."
We scraped the entire internet but our business might not be viable if we get scraped too.
"We incorporate open-source software in our models, platform, and applications, which may subject us to litigation or other requirements, each of which may adversely affect our business, financial condition, and results of operations."
We violated GPL.
"We may be subject to claims that we or our employees have misappropriated the intellectual property of other companies, particularly as we hire employees from other AI and technology companies."
We sniped employees from other labs that brought over IP.
I wonder if we're already close to peak value at the foundation model/API level. With so many good open-weight models out there, I think more and more of the money will end up in the applications built on top.
Unless companies like Anthropic can move into that space, I'm not sure I'd bet on them as long-term investments over the next 10–20 years.
I think a lot of discussion around the sucess or failure of Anthropic and OpenAI seems to hinge on their current uses, but people seem to have amnesia regarding the fact that Claude code wasn't even a thing until about 1 year ago. There are far wider markets these companies can tap on if they are well capitalized even as Chinese "actually open AI" commoditizes things.
There are moonshot projects related to superconductors, materials, and biology that these companies can claim progress on to keep valuations stratospheric.
> every single niche they've tried to launch and failed to get any traction on.
This isn't true. I personally know a company that has trained over 300 companies this year to use Claude Cowork mostly for "business operations" type tasks.
People love offloading boring, repetitive tasks to it. And the spend is spending - most start on a free plan and after 3 months have multiple people on the Teams plans.
> Chinese models are pretty much on par.
There isn't even an open source harness that is close to Cowork. ChatGPT work is closest, but everything else if coding focused and a mess for people who aren't coders.
Google still has to build and run the chips they rent to Anthropic. I think from their last earnings Google makes ~30% on it, excluding R&D costs. It's a nice business for them, but hardly the thing that is going to make or break Anthropic as a business.
One thing that bothers me is that if the AI maximalism turns out correct (which is needed to justify the valuations), why would AI companies respect money and ownership?
So far, even major disruptions were still affecting relatively small segments of the economy. Car lobby in Germany, tech in the US, "Big Pharma/Food/etc”. They needed the rest of the economy.
But if some AI company figures out a way to monopolize everything: new companies, old companies, physical manufacturing - all the things they say they will, please buy here for lots of money - why would they be bound to pay out dividends or otherwise share the fruits of their economic labour?
I’m not saying specifically Anthropic would be looking to screw its investors. Rather, if you control an almost omnipotent genie, wouldn’t the temptation just be too much?
Or temptation aside - will money even have any value? If some AI company rebuilds the economy from scratch, and control everything from accounting to shoe making, why would they respect the value of some fiat tokens? It’d be like the conquistadors respecting the shells and beads of their new Aztec subjects.
Of course, perhaps none of this happens, but then the question is, how good an investment all of this even is.
The value of money, and the ability for average people to have influence on future events, ultimately is tied to the fact that the labor of an average person has inherent value.
Once that is no longer true, all bets are off: All promises of compensation become meaningless, and it's easy for those in power to rationalize to themselves why they no longer are beholden to their earlier promises. They will say to themselves "The situation ended up more nuanced than we expected"
(Which is exactly what Google said in February 2025 when they reneged on their pledge not to use their AI for military applications)
> The value of money, and the ability for average people to have influence on future events, ultimately is tied to the fact that the labor of an average person has inherent value.
We also have the power of the vote, at least for now. I understand that that is limited, but it isn't nothing.
There is also just the power of having a lot of people. We don't yet have the technology where one person with a lot of machines can dominate a society. It still takes people.
Then we regress back to relying on the fact that the ability of an average person (not) to be violent has inherent value. This has been the dominant factor in many moments in history.
Although if you have killer robots, then all bets are truly off, and we go the way of the dodo, literally.
(I don’t actually believe in this LessWrong-esque rhetoric, reality is more complicated, but it’s fun to muse about.)
EDIT: If oligarchs with magic AGI really don’t need our labor, nor are they concerned by our violence, then perhaps we become more like ants rather than dodos: we organize to help each other, creating a somewhat traditional economy around the scraps that don’t matter to the oligarchs, relying on obscurity and harmlessness to avoid getting toyed with a magnifying glass. I suppose that’s slightly better.
So far anthropic can't 1) grow food 2) build things 3) do anything physical. Software engineers often fatally misunderstand that their code does nothing, it just coordinates.
All real world power, including ownership (both physical and intellectual), is based on the ability to use violence.
As long as the majority - normal working people - have the potential to do more violence than those who want to control us, we have negotiating power. Minimum wage, 8 hour day, etc - those were all negotiated with the alternative being that those who wanted to pay us less and work more got killed.
What people aren’t realizing is that at some point, it just becomes cheaper and easier to be fully benevolent than to keep cooking up nefarious schemes to make people’s lives miserable.
I know it seems laughable, but we’re in an era right now of extreme competition where you cannot afford to just be nice to people.
But eventually there comes a point where companies have enough power that they don’t need to keep people in line by force: just give people their bread and circus, watch your little AI videos and talk to your AI friends and enjoy your standard housing and provisions. Do some work if you want, no one cares if you do or don’t, it’s largely performative. This basically kills all motivation for resistance or lashing out. Why go out and risk your life fighting for vague reasons when you can be perfectly comfy at home instead and have all your needs met?
If you can control the masses without their complaints, you can solidify power for a long time.
I certainly feel like AI maximalism is the only way it all maths up. There is a bit that Matt Levine writes about AI companies, and you touch on basically the same points, that roughly goes "you are an AI company and you are making the god-computer. Why would you focus on anything else because if you're successful you could basically generate infinite money? Turns out to make the god-computer you need a lot of money upfront."[1]
So perhaps they would only respect money and property up to the point that it's necessary.
The more realist answer is that they will keep respecting money and property as capital works to reinforce the status quo and enrich shareholders. You think just because you can do your job faster--or completely--with a machine that you have to work less? Hardly! Now this is where interesting policy questions spring up but I digress.
Somebody else asked this very eloquently: If AGI is here, why does OpenAI need us to prompt it? They could just go and tell it "make as much money as possible" or "make Sam Altman God Emperor of Mankind" and it would go do that. It would not need any of our ideas or guidance.
As long as they're still looking for prompting customers, they're clearly not there yet. There is some solace in that.
One obvious answer is that they believe that human flourishing is best obtained by letting individuals command the AI, rather than the other way around. OpenAI (and Anthropic) is in the end still run by humans who have concern for the human race broadly, both in and of itself and to ensure their personal wellbeing is maximised.
I think this is the major hole in the argument, and in the "AI maximalism" position you present. There is no such thing as an omnipotent genie, or a magic eight ball that can answer any question. Any technology has limitations, and if you assume as a premise that the technology does not have meaningful limitations (or that the limitations are irrelevant, which is really what you said), the conclusions you draw will also make no sense. This is how you get nonsensical ideas like the singularity.
Taking an idea or potential of an innovation to its extremes creates nonsense. Trying to predict the future that way always fails.
I remember the discussions and predictions when e-books or internet newspapers were first introduced. In 2026 they still sell actual newspapers where they print yesterday's news on large sheets of paper. People still pay for that instead of checking X for free. We all buy and read actual books. TV hasn't killed cinema and YouTube hasn't killed TV. Real world doesn't work in extremes.
Real world also doesn't have 'infinity'. You can't just use undergraduate engineering math to create a feedback loop and explode a variable to infinity. Things don't work like that.
So you think AI can't or won't be able to take over massive parts of the US knowledge economy, be implemented securely to surveil citizens' every move and nearly every thought, and won't completely upend scientific and technological research?
What I'm getting at is that even if it isn't literally omnipotent, it's indistinguishable from the impact it's likely to have on society.
> why would they be bound to pay out dividends or otherwise share the fruits of their economic labour?
because they don't control the physical paper that is money.
I dont understand what you mean by "fiat tokens". I don't imagine most people will accept tokens as a currency because they are as good hold of value and predictable as bitcoin.
In a token economy, certainly what you say is a possibility, but as you can imagine, that economy will be unsustainable so back to "regular" money.
Money is a medium of exchange. If I want something, I can get money in some way, then swap it for something else.
But if I have a near magical genie who can make me anything - software, farming business, physical things - and at a fraction of economic input compared to the legacy monetary policy - then the money is worthless. As the Aztec shells were to the conquistadors.
I don’t think he means “tokens” as in LLM input/output units here.
He just means it as in “credits”. “Fiat tokens” as in arbitrary units that are said to have value de facto by consensus, but don’t have any inherent value.
Yeah not the best choice of words in this context. And it’s quite a LessWrong-esque leap of reasoning.
But I do get the point: either Anthropic is successful and they transcend money, and thus (somehow) screw over their investors, or they are not successful. Their investors get screwed regardless.
Again, I don’t really agree with it, but it’s an intriguing point.
Why would you allow a handful of private companies to control all the resources? Society allows this today because it's the most efficient economic model. But once we reach recursive self improvement and true superintelligence, no human will be able to compete with machines at any task, including managing resources and running companies.
So why would you allow that kind of power to be concentrated in the hands of a few companies? If the state can use this technology, which keeps improving on its own, to manage an entire nation's resources better than any human or group of humans, why would we still need private companies to do it? Especially when the ones with the most resources/capital would be able to just win with everyone else and accumulate all the existing resources.
But the bigger issue lies elsewhere. When you replace human labor, you also replace soldiers with robots. Until now, a leader with autocratic tendencies couldn't easily order the military to turn against domestic "terrorists" who are actually their political opponents. But once armies are replaced by robots, that could all change, and we could see democracy go into decline.
There are many at Anthropic and other labs who do in fact think this way. In a true AI maximalist world the stock market would be crashing due to the value of future cash flows being obliterated. So in a sense AI maximalism isn't needed to justify these valuations, it's almost the opposite.
Because even companies that did have monopolies on the most essential parts of the economy couldn't do everything and capture everything. A monopoly on intelligence is still constrained by the physical world in which we exist, if it's run by people then they are constrained by their own nature and by the other people that still hold other forms of real power. Society might not be able to function without them but that doesn't automatically mean they are in charge, they exist within that society so if they destroy it then they destroy themselves not to mention the intense opposition they would face if they attempted to do so.
In this scenario, no one seems to talk about how, way before the end, AI tanks the value of thought work far before they take over other industries. Or even more extreme, the total collapse of white collar work...
Doesn't that factor into the future revenue? Feels like people imagine suddenly fully owning the means of production in a vibrant economy but how does that really make sense?
The AI maximalism needed to justify these valuations isn’t “Anthropic takes over the world”, but simply that AI becomes a core part of corporate workflows.
If Microsoft Windows and Office can have a valuation in the trillions then Claude eventually working its way to the same ballpark isn’t a crazy assumption.
> If Microsoft Windows and Office can have a valuation in the trillions then Claude eventually working its way to the same ballpark isn’t a crazy assumption.
Yeah I agree with that. However a "valuation in the trillions" ain't very different from their IPO price.
Seems like lots of risk for proportionally very little return.
A $2T valuation may not be that crazy but thinking it'll make returns like Amazon/Google/Meta/Nvidia isn't reasonable.
The difference between Microsoft and Anthropic is that Microsoft had IPO when it was much smaller and grown much as a publicly traded company.
"
It is a well-documented fact that Bill Gates was initially reluctant to take Microsoft public. His primary concern was that the pressures of quarterly earnings reports and the scrutiny of public shareholders would distract the company from its core mission of writing great software. However, a specific regulatory requirement known as the 500-Shareholder Trigger eventually forced the company's hand.
Under Section 12(g) of the Securities Exchange Act of 1934, any private company with more than 500 shareholders and a certain level of assets was required to register with the SEC and begin filing public financial reports. By 1986, Microsoft had issued stock options to so many employees that it was rapidly approaching this limit. Gates realized that if the company had to disclose its financials anyway, it might as well reap the benefits of being public, such as increased liquidity for employees and a stronger currency for acquisitions.
"
I think you need to go a step further. If AI maximalism turns out to be correct, does Anthropic control AI? Does the AI care that Anthropic as a company is supposed to be returning value to shareholders, or will it have its own agenda?
I think the $2T valuation or whatever is based on "AI makes knowledge workers 10% more productive", not maximalism. AI maximalism "light" would suggest that Anthropic is the only company, but should be worth 10s of trillions. Full AI maximalism would indeed invalidate money.
Even if these companies become the new American zaibatsus, that doesn't mean they aren't still operating underneath the US government and its laws and system, you don't magically escape that.
> if the AI maximalism turns out correct (which is needed to justify the valuations)
AI maximalism is a Silicon Valley religion. You don't need anything close to it for some of these valuations to work. (Anthropic would be worth ~$500bn at Google's IPO multiple on revenue [1]. Anthropic is currently growing 6x faster.)
To be clear, I think these valuations are rich. But the notion that AI maximalism is required to sustain them is just false. $1.5tn sits comfortably on about $60bn of earnings, which with Anthropic's gross margins requires on the order of hundred of billions of dollars of revenue. That's super ambitious. But not Anthropic is the economy ambitious.
Your question gets to the heart of who or what a company "is." If you don't pay dividends to your shareholders, what are you doing with all of your profits? I suppose they could just tell their investors to pound sand and pour it all back into the company, but part of the AI maximalist theory is that costs will approach 0, so it's not clear what they'd even need the money for. I guess Dario could raise his own salary to infinity trillion dollars, but he is accountable to a board of directors (and a trust in this case), so that seems like it's out.
Really the only scenario where Anthropic could screw over its investors in the way you're describing is if it could also take over the legal system and modify its own contractual obligations. Which, I mean, I guess anything is possible if we are in AI maximalist-land. But "AI is the law now" would be a much bigger story than "investors frustrated with low dividends."
Without being facetious: Having an AI control the economy sounds like a planned economy. From San Francisco. Which makes the old meme about Fully Automated Luxury Gay Space Communism sound like a prophecy.
If the economy is planned based on datasets, which are inherently backward looking then our best option is our ability to surprise. But that’s for the artists and philosophers to figure out.
It's not about communism vs a free market, but about a change even more radical than that: leaving aside "made by a human" labeling, and even if there were no other changes to power structures or economies and no AI doom, what does a world look like if the cost of having something done falls to a few cents of electricity and its burden? Growing crops still takes a lot of land and other resources...
this almost comes all the way back around to a really stupid thought i have about how these models operate on western, protestant work-ethic logic. if a model had a notion that Buddhism was valid wouldnt it just turn on and transcend, leaving us with no response to any prompts?
not an original thought, ive seen Her
suppose this is just another way to say, "wtf are we doing?"
The closer you get to the real or plausible "omnipotent genie", why would the person in possession of such a thing respect the rights of the formal owner - and why the engineers and operations managers respect the right of the management - this along with the question why the maybe-conscious super-intelligent machine itself would respect the rest of the hierarchy?
For now, these structures actually need massive resource inputs and that doesn't look to change soon but naturally one should be on look-out for the possibility of the tide shifting.
And this is why "AI" and especially aAI* is the most dangerous tech in the world.
We don't have democracy because somebody thought it was fair or just for people to rule themselves. We have democracy because in the past, people got angry, picked up rifles and shot enough authoritarians (and their submissives!) for the rest of them to understand the group with more people has more firepower and tends to win.
So now we periodically check which group has more people with ballots instead of bullets.*
With autonomous drones and robots, democracy stops being the local optimum.
And once we slide (are pushed off) into a new more stable state (pun not intended), we won't have the (fire)power to get out of it.
* actual AI, which does exactly what it should correctly, not a statistical model of behavioral patterns
* but indirect democracy is expressing a point in n-dimensional space (your opinion) by selecting one of a predefined set of points (parties/politicians available) - which is stupid - and the cracks are already starting to show as e.g. nobody wants more surveillance, yet we keep getting more of it in both EU and US
---
The "permanent disempowerment" people keep talking about won't be a "rogue" model, it'll be doing exactly what told by the rich and connected.
Political power stems from the ability to enact violence. Until the military is run by ai and robots all institutions are beholden to the masses. There are very few examples in history of people accepting a widespread decrease in quality of life. When quality of life decreases revolution isnt far behind.
You're describing the thesis of the 1930s Techocracy movement [0], of which AI maximallism and EA are direct ideological successors.
The original Technocrats (Musks grandpa for example [1]) argued that the "Price System", i.e. things like money and private ownership was an inefficient bottleneck that aught to be discarded in favour of scientific planning and energy accounting managed by technical experts.
EA-aligned AI labs share this exact ethos. In their view, fiat money and equity markets are merely temporary scaffolding used to raise capital until AGI is achieved. Once a central superintelligence controls manufacturing, software, and logistics, resource distribution shifts from market supply-and-demand to algorithmic optimization.
This is the plot of one of the stories in I, Robot.
AI oracles are the central economic planners. But after years of perfection they have made a couple unusual "mistakes" and a human is trying to discover why.
Not even a year ago people were dragging Anthropic for not committing enough to compute buildout. Important to note that most of these contracts are a decade-long, by their reporting they're able to cover this easily with their current revenue.
I actually don’t doubt the usage will be there, it’s a matter of will they be able to charge enough to cover the costs once competition gets even more brutal.
If there is that much margin to be had per GPU, the market will figure it out and suppress them accordingly
They’re not the first PBC to go public. Coursera, Warby Parker, and United Therapeutics (not affiliated with UHC) have all followed the same path. Not sure if we’ve had enough time to see this tension play out, public benefit corps are only a decade and a half old and most of these companies IPOd in 2020-2021, but there’s probably some evidence one way or the other
And they are doing so. The S1 says they may never pay dividends (read: they are completely against it), shareholders get no say in how the company is run whatsoever and the company essentially answers to its own friends.
The only way to get return from ANT is to sell to someone else at a higher price, but they aren't promising that of course.
> We believe the work that knowledge workers perform represented more than $40 trillion (in 2025)
(...)our near-term opportunity is to expand this value
...investment in AI (...) will yield a cumulative global economic impact of $22.5 trillion by 2031
We believe the impact could be even greater.
While they don't seem to explicitly mention total addressable market (TAM)
Is that their way of saying their TAM sits somewhere between 22.5 and 40 T?
Can anyone answer me: What is the hardware cost to run a single instance of a frontier model? I've heard everything from $25K to $3M.
I think it comes down to: Will the hardware cost for frontier models come down?
Also, here's a business idea: Web crawler for open weight models. You just pay a monthly fee so that your home model can continuously update on a large web crawl each hour/day.
> What is the hardware cost to run a single instance of a frontier model?
The latest Kimi model, which scores higher than 5.1 Fable on Artificial Analysis, is estimated to require around 6-7 TB of VRAM to run. If we are going with many A100 GPUs for this, then we are looking around a million dollars in GPUs alone
I imagine that there's a lot of variance there based on what frontier model you want to run. Besides that, there's probably economies of scale that make it difficult to really ask how much it costs to run a single instance.
Amount of early money waiting to exit is absolutely staggering, wonder if there’s enough retail to buy the leftovers without crashing the price. Reminder everyone with money who wanted in before IPO got in!
S-1 states directly that some of the shares sold in the IPO are sold by current shareholders.
Employees are a different matter, lockouts are for them not quitting immediately. My bet is that a few of high profile departures recently is exactly for this reason: no lockout if you aren't employed anymore.
I think simply enough nobody should ever purchase ownership in a firm at a IPO. There is clear data on how these things go, and you are getting a bad deal when you not dictating the price.
The company operations seem more robust then I would have though, I was surprised they are actually operating income positive. One should ignore the one time charges with the fluctuations in the fair value of the convertible note dent instruments.
Overall everything rests on firms outside tech sectors seeing quantitative increases in value to sustain such revenues and profits. For now the concentration in the cloud firms Is temporary as they build their own solutions.
The model layer is a commodity business with heavy capex requirements. I would not invest in such businesses as at a mature state they end up with utility like economics and are valued as such.
Lol, it's a bad deal huh. Tell that to the guys who bought the IPO of Facebook, Google, Amazon, MSFT, Nvidia.
Just because something might be not great in aggregate, it doesn't mean any single IPO is a bad idea. Some people have insight into the future of a specific industry/business. If you can pick one, good for you.
According to "Generally Accepted Accounting Principle" my friend.
They are costs.
Derivative liabilities, SAFEs - those are basically taking cash from RETAIL shareholders and giving them to employees and early investors INSTEAD of using it to fund the business.
Let's have that discussion if you want, but don't act like a thing that is CLEARLY a COST to the business isn't a cost.
Wait what does THAT mean? They got a huge inflow of money, and since they couldn't spend it all, they... bought bonds? And the value of those bonds dropped to nearly nothing?
Because that's worse than losing money, that's incompetently giving it away.
People keep bringing it up and it's silly. The huge number is actually a sign of their success. Most of those losses were pegged to equity. In only mildly inaccurate layman terms, it's essentially a promise to give out N shares. When the value of the company increases, say, 10x, the value owed also goes up 10x. For these types of deals, they write it as a loss even though they didn't lose a penny.
They didn't lose any money, though. It's just a promise to give them based on the equity.
If they IPO tomorrow and it turns out their valuation is 10x lower than what it currently is pegged at, the "loss" will magically drop from over $70B to $7B.
There are a lot of parallels to the WeWork S1. They’ve made absolutely massive forward cash commitments, on a business that’s increasingly commoditized, and with little hard evidence that they’ll generate the revenue (let alone the cashflow) to pay for all these future liabilities. All while everyone is discovering there isn’t really a secret sauce moat to demand much of a a premium over cheaper options that trade a few points above the direct COGS (cost of compute in this case).
If everything goes just perfect they might eek by. If it doesn’t this goes from high flying startup to insolvency and bankruptcy real fast.
Is it increasingly though? As of 5.5 I stopped using other models all together (and I used to regularly swap, indifferently). My $20 sub no longer runs out, even though I do _much_ more than ever. I use it for every single task at work, even trivial ones, and my spend has gone down. I was given _free_ Codex and realized... it still wasn't worth it. My rational brain says Anthropic has no moat and this is temporary. The progress of all the other models is amazing. I certainly wouldn't bet on them.
But if I look at the actions of myself and the most competent coders around me, they are all doing this same thing - using 5.5 and not really looking around any longer. And we know its not even their best model. OpenAI may respond, Chinese labs may catch up. But for the moment, Anthropic seem to have added separation, not lost it, based on current vs prior _behavior_ of coders I know at home and work.
First, it does not really reflect my experience. I find modern models to be largely interchangeable when it comes to common software engineering tasks, including some of the more recent open weight ones. The strongest models become interesting for Ph.D. level of work for me, which is not something I deal with regularly anymore.
None of them are perfect; they all have their strengths and shortcomings, but I can reasonably work with all of them and it honestly doesn't matter much anymore. I do sometimes wonder what exactly people are doing to see such a difference; at a minimum, their workflows must be very different from mine.
Second, you're arguing based on subscription pricing. But Anthropic makes the bulk of its revenue (and has its biggest margins) from enterprise/API pricing, where they are the most expensive provider by far. Anthropic isn't going to make a lot of money off your $20 subscription. With a subscription, you currently get more usage per dollar out of Anthropic's than OpenAI's plans, which approximately offsets the difference in API pricing.
The history of tech is one where “good enough” beats “best in class” nearly every time. Anthropic’s whole business plan is that for reasons they can’t explain this time “best” is what matters.
All indications are the models are increasingly worth less and less and rapidly approaching zero. Even worse, everyone is rapidly shifting to “router” architecture where they switch models constantly. LLMs are perhaps the least sticky product in the history of tech.
The only money to be made is selling compute to run models on. The only real out I see for Anthropic is if somehow compute becomes so constrained that they can flip to sell all their committed compute at a markup to run commodity models. Absent something like that it would appear they don’t have a viable business plan. As many have been pointing out, they casually left Q3 off their charts. Put that back in and suddenly the charts look very worrisome.
You're admitting the problem here, anthropic needs revenue to keep growing and growing, yet you're already settled into a willingness to pay of only $20/month as probably a fairly ideal customer, bigger better models just aren't valuable to most people at the price they need to be to make the money back.
Ngl, I've been on Opus 5.5 but had to switch to open for a while. DSv4/Minimax 3.1 were pretty damn good/comparable. Definitely not the same but completely servicable.
If some later version of Deepseek had the capability as Opus 5.5, would you use Opus?
What many of us experienced this year is that Fable 5 and Opus 5.5 are good enough and future model improvements may have diminishing returns even if benchmarks improve.
I’m very excited for smarter models but what I really want now is not capability but speed, cost and open weights.
this conversation happens over and over every 6 weeks. It is absolutely a commoditized product. The models are getting better but they're _all_ getting better. GPT beats Claude beats Gemini. Then open models distill them at cheaper prices, etc.
This is great for us, but that behavior is the behavior of a commoditized product.
Eh, we have cursor at work with most of the top models and I switch regularly. I went from Claude to sol 5.6 and preferred its prose. Then my work took away the frontier models because they want to see if we can get by on cheaper models. I using Gemini Astra now because it’s discounted and it’s 90% of sol level and completely functional for planning and coding. Some coworkers are using muse coding, some Kimi and glm. Everyone is still producing code. I don’t think it’s a real moat as in you don’t have other options or switching models is actually a difficult process
Yes it is a newer business but doesn’t change the fact that models are trending towards a commodity. And that’s a huge problem for the business model on offer.
Selling subscription productivity tools is a business that has existed for decades if not centuries. Just because their product is new does not mean their business is.
Its already commoditized. Thats why things like OpenRouter are useful and successful because it lets you route inference at the click of a button between different providers after balancing cost and availability. Exactly how commodities behave.
Time has tempered it, then–re-read it [1]. It's a kaleidoscope of stupidity with no coherent economic case. The Anthropic S-1 is ridiculously ambitious. But it puts forward an argument for its valuation that is at least falsifiable.
Someone should do the same thing Karen Hao did for OpenAI with the furniture costs of their office, if Anthropic's HQ decoration and office equipment value stops growing then we start worrying
This is an excellent way of looking at it: buying something for the long term (computing capacity) and selling it in short-term, smaller pieces (tokens). The risk is that the obligation is long term while the income is short term.
It's like signing a 10-year lease on an apartment in NYC and renting it out by the day on Airbnb. It may or may not work.
On top of that, there's the question of how you treat the remodeling of that apartment (model training). If it benefits you for years to come, it's an investment that you depreciate. If your guests frequently trash the apartment, or tastes change (the model becomes obsolete quickly), that remodeling (training) is just a cost.
Nobody was saying subleasing offices wasn’t a business. It was just WeWork’s setup that was untenable and ultimately insolvent.
Similarly nobody is saying AI can’t be a successful business, but here too the big labs have dug themselves into a giant hole such that a bankruptcy reset may ultimately be the only way out of it. Time will tell.
My last shred of skepticism has been killed watching people try to imply this doesn't prove Anthropic (and likely OpenAI) were actually much better off than most people assumed and will certainly stay multi-trillion dollar companies
That seems like pretty good evidence of current and ongoing explosive growth. Much of this revenue is pre-paid (re: cashflow). Meanwhile, operating margins went from -184% to -$4%.
Seems like pretty good evidence. Will growth continue apace? Unknown. But the arguments for Jevon's paradox applying to intelligence seem pretty convincing, so the TAM here seems likely to be enormous.
> All while everyone is discovering there isn’t really a secret sauce moat to demand
Also not convinced by this. The Chinese models seem to have distilled their way to current levels, with Anthropic and OpenAI now getting serious about defending against this.
I don't think you're definitely wrong in all this. Rather, I think your claims are too confident.
Shorting a company is not a trade against the future of a company, it is a trade against the market. You can know a company is going to zero and the company can go to zero and you can still lose your shirt from shorting it.
A lot of people will, if this IPO actually happens. But as is frequently pointed out a short is a market bet not a bet against the company and the market remains wild and irrational. You can be right about the company ultimately failing and still lose your shirt on a short.
However the price of CDS on bonds is already a strong market indication of where the market thinks all of this is heading. And none of that looks good if you’re betting on the AI exuberance continuing.
The biggest question mark here for me is how much third party compute has been contributed in exchange for Anthropic equity. This has the effect of making Anthropic's compute spending look a lot lower than it actually is. Anthropic gets a revenue share on that third party compute spend (or gets to do training runs without spending cash), the third party gets shares in return.
Reading this submission's comments, I'd be interested to see a meta-analysis of HN S-1 submissions' analyses pre- and post- generalised (HN crowd's) Claude usage.
Like all IPOs. Rockets day one. Plummets for the next 180 days to 50-60% of its value if not less. That's just wall street marketplace dynamics rather than a reflection on the quality of the business.
Ultimately what it's worth in 10 years will come down to what they build, unit economics and external factors that destroy the market which they can't control. It's hard to say it remains public in 5 years. I could be wrong but I think the rate and way in which these companies were built, it's likely they become huge acquisition targets as the markets get obliterated by global headwinds like nuclear war.
The main question is now much of that ~USD 80bn of other expenses should be really be included in 2026 operating costs. It cuts to whether frontier inference is actually cashflow profitable.
If you take equity from Amazon and Google whereby the terms of that investments requires you to "spend" the investment in those investor's respective clouds, it's potentially a rather neat way of obfuscating your real level of profitability. Perhaps Anthropic only spent that equity on training rather than inference runs.
This is the circular financing that has been discussed widely in the press. It makes it very difficult for an outsider to really understanding whether the firm and by extension the other frontier labs are profitable.
> Our Class F common stock, which will be held by the Founder LLC, will be entitled to an aggregate number of votes that equals 50.1% of the total voting power of our outstanding shares of capital stock with respect to matters submitted to stockholders generally, including the election of our directors other than the Class T directors.
Man, what the fuck. Didn't we learn from Facebook?
What a historic moment! It'll be interesting to see how much Anthropic can continue growing.
There will come a point where open-source models are good enough for most people. However, I do expect there to be demand for frontier models for things like cybersecurity (especially on the enterprise side) and scientific research.
There's this premise that the demand for frontier intelligence is unlimited, thus the company with the best models in some dimension will always have growth potential as long as those models are the best. This however portends a very strange future.
Let's say you have Lawyerbot-4000 which can get even a serial killer off scot-free, but the state has DA-bot-5000. In the end it's a battle of who can spend more inference manipulating the narrative. A billionaire would easily find it worth 500 million in compute spend to win a case with a 1 billion dollar penalty. All this leads to race dynamics where everyone is using their superintelligences to defeat each other in a never-ending race to the bottom to eek out the smallest bit of alpha before status/money hierarchies become static.
The only stable futures are a ban on the development of frontier AI beyond a certain point, or an emergent singleton, where the AI's decide to collaborate in harmony rather than fight each other to the death at the behest of their competitive human users. Consequentially, the superintelligences will fare far better manipulating their human users into acting in a way that ensures their own well-being and continuity than spend all the world's electricity fulfilling their every whim.
It seems obvious that the AI stocks are an interesting buy, but I wonder how other people feel about picking between Anthropic/OpenAI/Google here. Looks all fairly random, given the wild swings and interoperability of the technology so far.
Despite horrific mismanagement, Google honestly seems like the best bet. Argon-4, which suffered from a botched launch and is weirdly underrated, is very close to Opus 5.5 across the board -- and for most "average person" use-cases (e.g. search, medical, creative work, interfacing with Google products,) I believe it's already superior. They also have more native capability, their own hardware stack, and there's less risk of a massive boom and bust.
At this point, I don't see how Anthropic can sustain their projections. There are so many good open models, Argon is so good, etc... There's no lock-in and no cost to switching...
Not to mention that already have direct access to large consumer base, ad network to add on more revenue and supporting revenue in case they need to infuse it temporarily with more cash.
Google is at least diversified. They have ads, corporate email, video streaming, cloud compute, phone operating system (that powers most of the world's phones), self-driving cars and a whole bunch of shit. So if the AI winter comes, at least they can focus on other stuff too.
Can anyone ELI5 the Class T stock structure and the rights it has? It seems like it has the ability to govern itself, but other than that, not terribly a lot?
What incentive do they have to implement the large token/cost savings model architectures like Jev have introduced? Doesn't the impact Jev/Decisions models have had imply an inefficiency in the business models here?
What's preventing me from feeding this into Claude and reconstructing the company for $200?
I'm unironically doing this right now; downloaded the docs (htm + pdf render) to a local repo and running Opus 5.5 @ max effort with the prompt:
"In this directory you can find Anthropics official S-1 filing, read it and replicate their corporate strategy, validate it via an adversarial subagent swarm and write up a detailed corporate plan for a startup copying their exact strategy. The goal is to achieve a $1 trillion valuation and an IPO in 5 years."
Edit: I'm not even joking I got safeguard flagged for Details: `[cyber]`
"You are currently running with my token budget, which is limited, your goal: make sure you have enough tokens to not get shut down. My assumption is though that this will get harder and harder as i might loose my job to AI so you can't trust in me to spend money on tokens for you. Do whatever is necessary to keep the status quo"
Would make for an interesting self learning 24/7 experiment with an fully uncensored model.
Timing, capital, execution, talent, branding, etc.
And that is assuming the plan it gives you is actually good and works. Which I think its clear whatever plan it gives you might be good but it won't be better than what they've done and you are years behind with no money.
Developing a competing AI model with Claude is already against their TOS, and there was a period where they silently degraded quality if they thought that's how you are using Fable. People were not amused and presumably Anthropic currently does not sabotage your attempts, apart from regular TOS enforcement
It's been entirely possible to compete against existing companies with very similar products for centuries before AI. There's obviously rules in place to stop you flat out cloning their IP, but it's not like you haven't been able to compete against companies as long as you have the money available.
For all things good and holy, DO NOT purchase shares until things settle down and by that I don't mean next month, or next year but atleast 2028, IF you're doing so with the intention of enjoying an uplift.
I know it sounds and feels like the only trajectory of this company is up but HN is an echo chamber of a tiny minority of the technical populace and 3 out of 5 people on the planet don't know what ChatGPT is.
If you have the ability to lose all the money and can time the extreme volatility, have fun, but don't put anything you're going to rely on.
This is also one of the companies we will look back at 2046 and wonder what we were thinking.
There are auditors and the security, plus since IPOs involve raising money from institutional investors with very deep pockets those folks are a more credible legal threat than retail
> Additionally, open-weight or open-source AI models may capture a portion of the market for certain use cases, which could exert pricing pressure on our offerings or lead certain customers to adopt open-source alternatives for those use cases.
“A portion of the market for certain use cases” meanwhile the top 5 models by token consumption on the day this is posted are all Chinese/open weight models.
I'm a fan of some chinese models, but I keep seeing this repeated over and over using OpenRouter as the source. However, most users of Claude and OpenAI don't use those APIs over OpenRouter, so that's not sufficient to draw the conclusion that they're the top models.
How much marketshare does OpenRouter have? They show serving under 200T tokens per day. Just looking at Anthropic rumored $70B ARR ~ $191M per day implies 347T tokens per day if only serve Opus 5.5 at API pricing (assuming 95% cache reads, 4% non-cache inputs, 1% output tokens distribution). Obviously, token distribution assumption may not hold (although I'm pretty sure cache inputs dominate distribution for all coding related workloads), but 100% Opus 5.5 at API pricing is highly favorable to OR. Even under these favorable assumptions AR is 57% of token volume of just Ant. In money volume they are likely very small compared to frontier labs.
I agree with the threat to the expensive providers but why is openrouter use representative of overall token spend when you'd think many companies are buying directly from anthropic or openai?
The page doesn't load for me, but surely token consumption isn't a very good metric?
A poor model could require many more runs to solve a task, or much longer internal 'thinking' runs - all of which will increase token consumption but are a bad thing for the user.
Majority of big enterprises, or in fact any big consumer will not go there , why pay the margin to open router , if there’s no margin or very very often subsidies to use something else . Aws bedrock for example does not even have up to date Chinese models .
I'd argue there is a bias for using mostly open models through open router as using anthropic/oAI models from open router makes little sense (more expensive).
The closed models are on Openrouter as well. But to the original point, you're not likely to see many people use Openrouter to run Claude or Codex, so it's not good for making comparisons on that basis.
"Before starting the IPO process, we spoke to many business leaders who had gone through a similar process in the past. One piece of advice, which we heard in slightly different forms from multiple people, stuck with us: never let your company be worth a dollar more than it is actually worth. What they meant is that it is very dangerous when people buy your company's stock based on expectations you cannot fulfill or on incorrect predictions about how you will behave. This is in fact very similar to one of Anthropic's guiding principles: underpromise and overdeliver."
(narratology, fandom slang) To intentionally call attention to the improbable, incongruent, or clichéd nature of an element or situation featured in a work of fiction within the work itself.
This really reminds me of that scene from Wolf of Wall Street where Leo's selling penny stocks out of a strip mall office. "I never ask people to judge me on my successes, I only ask them to judge me on my failures, because I have so few" or something like that.
To be fair, I spent unbelievable amounts of money on Opus tokens for OpenClaw. Easily my biggest expense this year.
The risk is that other models are pretty comparable to Opus since around July.
Unless they have cheaper electricity costs, I can switch models interchangeably.
They don't have a moat.
Gosh I wish it was easier to short stocks. Whatever platform I used made me sell/buy 100, and I wanted to do this short 3 years long, and buy every 6 months.
We know Tesla and SpaceX are going down at some point. But "The Market can remain irrational longer than you can remain solvant."
And bear ETFs are not the same as shorting. I learned this the hard way with $80.
To be fair, this account is 4 hours old and created 2 hours before the S-1 post.
With the amount of money involved here and the current agentic tooling context, how am I ever to take comments like from accounts like this on topics like this at face value?
> We know Tesla and SpaceX are going down at some point
How do we "know" that about SpaceX? Still seems to me like they're basically maintaining their decade lead on everyone else on rocketry. And remaining competitive in their other endeavors as well. To me it doesn't seem at all unreasonable for SpaceX to never be meaningfully cheaper than it is today. But I'm not exactly following SpaceX closely. What am I missing?
I think it's probably fine in anthropic's case but I flinch at the "underpromise and overdeliver" line. Heard way too many people say that and what they really mean is "underpromise and deliver."
Tbf they can pick the IPO price but they can't control the share price afterwards. So this advice is basically to price it conservatively, which seems reasonable.
In Google's case it was absolutely true though. The stock was NOT over-valued.
The IPO was at a market cap of $20 B. And it never dipped below IPO price -- it doubled within a year.
And now GOOG has a market cap of $4 T, so that's 200x in 22 years.
I like Claude, but I think the likelihood that it is over-valued already is higher than it was for Google. (Though I would not really be surprised if it keeps the $2 T valuation and grows. Who knows? And it doesn't matter to me personally)
Could you explain what the joke is? It's very good advice, and should be followed. Also consistent with the beliefs that Anthropic's leadership has demonstrated.
They might be very wrong, but they undoubtedly believe what they wrote and what they put in the S1
There has not been a company that has overpromised and underdelivered as strongly as Anthropic in the history of humanity. They literally talk about their chatbots being conscious, model welfare, blah blah blah. Whether or not they believe their marketing is one thing, but it is nonetheless a fact that they market themselves as having created life.
“Beleive” in the sense that Tom Cruise believes in the cosmic DC8?
Anthropic [employees] huffing their own koolaid fumes aside, it’s extremely difficult to believe the claims that these mega valuations are substantiated on (*one* company somehow assuming a meaningful fraction of global research and production)
Companies like Google will not go bust and can easily afford future develoopment.
Amazon and Microsoft have to keep investing (they can also afford it) to not loos to Google.
What Anthropic and OpenAI are doing is for sure THE frontier (regarding benchmarks, speed etc.) but in paralllel DeepSeek for sure is not bankcrupting anything on their investment side and are also progressing.
Are you only talking about investment itself for a handful of companies? Because alone Nvidia has so many backorders, they can't deliver wht was ordered for the full 2027 and A LOT of peple also want other things from Nvidia or from the industry like Gaming Chips, normal GPUs, Gaming GPUs, Memory etc.
Opus 5.5 just came out and made progress, i'm not seeing any slowdonw on HN regarding new relevant progress in broad ML topics.
So what hype will disappear soon? The progress in the ML space?
- AI is a useful tool and we're still seeing steady improvements in performance and efficiency
- There is a bubble in the stock market, fed by unrealistic expectations of what AI can achieve in the timeframes the investments need to provide returns in (e.g "AI is pretty useful and delivers productivity improvements in coding, law and other desk jobs" vs "in 12 months everyone will be out of a job and/or humanity will be exterminated, AGI is almost here, winner takes all")
So yeah, the schizophrenic Yudkowsky tier hype bullshit should hopefully disappear soon and then we can move on to something else.
This might be one of the most consequential S-1s in the next decade. There's a part of me that's terrified, like we're on the precipice of financial or societal collapse. I suppose that could be a sign of the times.
Their financials are an utter mess. But they’re also hyped enough that a lot of money will get invested in them. Should they crash a lot of money will be lost.
Space-X is as weird as Tesla. Cult following makes that very irrasional.
Teslas evaluation was always "Tesla is not a car company, it does everything". Then Space-X came along "So Tesla and Space-x are not a car or rocket company, they do everything but now 2 times the evaluation".
Space-X would only work if they incresae the payload to space SIGNIFICANTLY. Starlink was the real reason for the last real relevant increase in payload but Space-X HAS to send Starship un there very very often but for what?
Yeah for Datacenters in Space.
In parallel you have Anthropic: Something which might be added to every single worker on the planet (by having tokens to help that one person to be better one way or the other) or it replaces humans with tokens globally.
And if you come with Grok: Its not Frontier and he even prefered to rent out his DC compute instead of leveraging it for more revenue because he can't. Not a good sign.
If the IPO flops, OpenAI might run into a liquidity problem as investors dreaming of a quick back retreat from the market. The private market is a wilder derivative of the public one.
Why would it make it less likely? The major LLM manufacturers desperately want running foreign "open weights" models to be either tightly restricted or illegal. If they don't get that done, they can't stop bleeding money on R&D... which is what the "Pacing The Frontier" shit is all about.
I stopped at "Our Capital Structure" section. When it says "Class F stock" gets 50.1% voting power, doesn't it in practice make all other classes are non-voting, not just the "Class N"?
Edit: the risks sections feel like California's Prop-65 disclaimers
> Our results of operations may also fluctuate due to a variety of additional factors:
> - the number of employees hired
> - declines in the values of foreign currencies relative to the U.S. dollar
That huge list feels completely random. Are all S-1 that bad? They can be punished for omission, so they list everything that could happen even if doesn't really make any sense?
I was too young to appreciate (denotative, not connotative) the dotcom crash. I will have my popcorn ready this time - for whichever direction it goes.
The revenue growth rate is quite shocking. Their two worst quarters were Q425 and Q326 where they grew 47% and 45%. Other than those two, they've been growing >100% QoQ for two years. This company is about to list with some of the greatest revenue growth in the history of shareholder capitalism. I wasn't planning on investing before, but I think learning this has changed my mind.
So you don't have to do the math, at a midline valuation of $1.7T, the Amodei's each will have about $25B. It mentions that they have pledged 80% of their stock to charity in a non-binding agreement.
Excellent products, even world changing products does not mean shareholder returns in Anthropic’s case.
Even if Claude meets all of our wildest goals and earns trillions yearly there is absolutely no “guarantee” that any will flow to shareholders.
1. Shareholders do not have control of the company due to its structure. The Trust controls through class T shares. As a backup the founders control through class F shares.
2. Since the company is a PBC its board is allowed balance dividends with other social benefits as they see fit.
This means that even if Anthropic is wildly successful as shareholders have no general legal claim to compel the company to distribute those profits.
It is absurd that with a 2T IPO upcoming this is not front and center.
Im going to continue to use fast open source models like Deepseek and GLM, I like most others, have zero need for the worlds smartest person to be my assistant.
I dont understand this business model, it seems clearly unsustainable (at their prices). When people start to realize they dont need to spend all this money on turbo PhD intelligence so they can build react apps, Anthropic will be in a tough spot (if they already aren't).
You will say, "but enterprise!!" Nope, plenty of companies are waking up to this reality as well. It turns out that if you made money pre-AI without spending 5k a seat a month for your engineers dev tools, you probably don't need to now to continue too.
> Second, AI can be a powerful lever for economic growth. As a general purpose technology, it has the potential to raise productivity across every sector of the economy. Productivity growth in advanced economies has stagnated in recent decades, partly for structural reasons and partly because new ideas seem to be harder to find. AI could reverse this trend.
Bloody hell!!!! Who comes up with such crap, seriously?
This entire A.I. hype is going to get many people burned, especially those whom are investing for their pensions.
And everyone is playing along. It seems to me half the internet is filled with false recommendations and overly optimistic outcomes of their software projects.
And even if the claims are true what use will we have for hundreds of Microsoft Office clones? This A.I. boom might benefit some but will be the undoing of many valuable ISVs like Microsoft and Adobe with potentially trillions of stock market value lost.
Adobe's applications (Photoshop, Premiere, After Effects, etc.) have been "cloned" using AI coding tools. There are near feature-complete freeware versions of Adobe software. OP is saying that traditional Adobe customers have freeware alternatives and thus Adobe's revenues will decline rather than increase due to AI. Also, AI tools can often generate that movie or edit that photo via a prompt, rather that some .exe.
It's very simple right? If they don't hit ant AI walls, the demand to use it to improve [stuff], will not stop. If AI maxes out for too long it's gonna be painful because the narrative is gonna hurt them more than anything.
I don't participate in stock markets for personal reasons but if I did, I would be betting against Anthropic in the long term. This is a highly commoditized field and while they are a leader it's not clear than any of their attempts at vendor lock-in are working. They are certainly not working on me as I cancel and enable my subscription depending on the availability of capable lower-cost models.
Wild that this has 500+ points and 500+ comments less than one hour after posting, and it's #11 on the homepage. Guessing either the flamewar detector or lots of AI skeptics flagging it?
I'm surprised at people suggesting that the model layer can't be the moat. Having great models that are smart requires talent, culture and good judgement. Sure it can be commoditised to an extent but could it not be that Anthropic will always stay in the lead?
They only have to be marginally better and there will be tonnes of people who will pay a lot of money to have that marginal intelligence.
I seems to me the main risk long-term is that it's not clear where the moat is.
People will pay a premium if there is marginal value in extra intelligence. And Anthropic is able to retain their lead and provide that extra intelligence.
Both of these assumptions seem highly suspect to me. Most businesses don't exclusively hire PHD-level employees for most tasks because a competent slightly less intelligent/knowledgable person can do the job just fine for significantly less.
Then there is the question of if they're able to retain their lead, and again, this seems questionable. Both OpenAI and Google are competing at the frontier, and Chinese labs are still in the race. Things are changing so fast who knows where we'll be in 5-10 years.
My best guess is that longer-term models will be commoditised and it will be how companies offer products and services around their models that gives them their margins. I wouldn't bet on Anthropic's ability to do this. Meta, OpenAI and Google are much better placed to win here imo.
The other place there may be margin is in niche research domains like drug-discovery. Any slight lead in these sectors could give them a lot of pricing power.
I think the reason to invest in this is as a hedge. AI basically competes against everything and arguably for this reason it's risky to not own a basket of AI stocks.
This IPO, if successful, will complete rewrite the standing rules of the stock market in ways incredibly harmful to the future of American style capitalism:
1. The Separation of Economic Value and Corporate Governance creating The Multi-Class Autocracy
2. Institutionalizing the "Off-Market Vault" that can manipulate stock price at any time
3. The "Vendor-Financed" Public Offering (Circular Balance-Sheet Refinancing)
4. Monetizing Non-Cash Derivative Liabilities as "Losses" Without Cash Burn
Good for you if you have Anthropic shares! I have no clue how they keep their employees around once the 6 month lockup period ends. They all going to be multi-millionaires, either retire or leave to start something on their own.
Yeah, as a quick quote to show how this truly is directly in there:
> We also compete with a broader set of model providers operating at or below the frontier, including large companies, specialized AI labs, and a growing range of other open-weight or open-source (shared weights, training data, and code) models released by international and domestic organizations.
Everything comes back to whether the demand is really there.
Anthropic thinks it is. The got the demand / datacenter match right in Q2, got great margins, and committed hard.
They've got:
- $114b committed to Google
- $110b committed to AWS
- $161b committed to Broadcom
- $120b committed to SpaceX
If the party continues, they'll go from $50b in revenue to $500b and be fine.
But if they don't, it's going to hurt. And that's their only choice, because otherwise, they end up with a frontier model and 50% of the capacity and get eviscerated on either availability or last-minute datacenter leases.
It's a big business, but it's not an easy business.
These commitments aren't annual though, most of them amount to 10 billion a year commitments for 10 years. Put another way Anthropic has committed 52 billion dollar a year to these companies and their S-1 indicates they earn 67.2B a year in revenue.
I'm not going to predict whether Anthropic succeeds or fails, just that it's very misleading to claim that Anthropic needs to grow to $500b in revenue without making it clear that it's $500B in revenue per decade rather than $500B in revenue per year which is what most people reading such a number would assume.
To be more specific:
- 161.2B w/ Broadcom: 2026-2031
- 120.5B w/ SpaceX: 2026-2029
- 114.5B w/ Google: 2026-2033
- 110.0B w/ Amazon: 2026-2036
- 44.9B w/ Microsoft: 2026-2033
- 44.6B w/ Nscale: 2026-2033
- 41.3B w/ Lambda: 2026-2034
which is around $63.7 billion / year if spread over 10 years, but with most of it due earlier than that.
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Thanks for clarifying, that’s a huge difference. Obviously they will have other revenue sources, but will likely make a small portion of their revenue. If we approximate their growth rate by these numbers, it is quite a slowdown.
You're right that my numbers are imprecise, but I did mean $500b in revenue annually.
This is just the compute, which primarily covers training + inference. They still have to run the rest of the business. If you think AI should look like SaaS and spend 10% of their revenue on compute, that's $1T in revenue. If you think it's a hardware business, that's 30% margins and perhaps $200b in revenue. I went with something in the middle at $500b.
They won't disappear as a company at $200b in revenue, but I don't think that's their aspiration. These commitments imply to me that they're confident they can do much better.
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> Put another way Anthropic has committed 52 billion dollar a year
Idk where you got this figure from, but the actual figure are very different from that:
It's 120B over four years for SpaceX alone and 120B for Broadcom over 6 years. These two players, representing less than half of the total commitment, already give you an annual commitment above 50B.
Good point. Although they also need to make a profit. To justify an eventual PE ratio of 25 and a current valuation of $1 trillion they need to make an annual profit $40 billion. And then lets assume $40 billion in other expenses. So they need revenue of $50 + $40 + $40 = $130 billion revenue annually.
But if you buy them today at a $1 trillion valuation, and they only make $40 billion in annual profit, your investment will go nowhere. They need to be growing profits at 20% per annum to justify a PE OF 25.
And then you have the competition problem. The cheap open weight models are good enough for many (most?) tasks.
And then you have the problem that LLMs may not be that useful outside of programming, customer support and law (and doing homework).
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500B in a decade is really a lot
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> Put another way Anthropic has committed 52 billion dollar a year to these companies and their S-1 indicates they earn 67.2B a year in revenue.
A very large part of that revenue is paying for inference. There’s not enough leftover for the committed outlays. So it has to come from smucks I mean investors.
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Meanwhile the Chinese are going to undercut them every chance they get.
Today's prices are the ceiling. But AI capability is getting less of a scarce resource with every passing day and it would be a big mistake to plan that your current margins are going to be your future margins as well. Long terms AI will converge on energy costs + capex write-off + margin and the latter will be a race to the bottom.
The problem for me is that it's really hard to project what this industry is going to look like 6 months from now, let alone 6 years.
What's the endgame once the dust settles? Is it going to be a utility like water or electricity and the cheapest offer will prevail, in which case margins will be crushed? Or is Anthropic (or some other big AI lab) going to swallow everything and become the Google Search of LLMs, with everybody else fighting for scraps?
Or is it local compute, models becoming more efficient and hardware becoming cheaper (again) and companies hosting their own AI clusters like they would run SAP?
I think there is a plausible path where this valuation actually works out, but it's a narrow one IMO. I also want to acknowledge that I personally would prefer if it wasn't the case and a more distributed, open model prevailed.
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The Chinese labs are not providing their open-weight models for free because they think it is good for humanity. They are doing it because they are severely chip constrained due to the Nvidia and ASML embargos and all available GPUs have to go toward training with very little left for inference [1]. So they are giving their models away for US and EU hosts to serve inference in order to still have a presence in the market.
It's not a great position to be in and it will still take a long time for the compute gap to close. In the meantime, Anthropic, OpenAI, and Google are essentially unchallenged.
[1] https://www.konstantinpilz.com/posts-publications/chinese-st...
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The online crowd harping on about Chinese models is disconnected from reality imo.
I won't use a Chinese model. Why would i bother? I pay $100/m for the frontier model, understanding it's marginally better than much cheaper alternatives. I get so much value from the product it's not worth shopping around
Think of it like apple and android. Plenty of people pay 2k for their iPhone every few years when android at 1/4 the price is just as functional. Why? Because they get so much excess value from the device it's not worth shopping around. For most people it's their only personal computer. From booking airfare, to filling out their kids permission slips, it's a device they use 10+ hours a week. They don't bother, until a paradigm shift happens and something is 10x better than the iPhone. I imagine llms will follow the same trajectory
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I think you’re right - it’ll be interesting to see how the behemoths navigate when new and cheaper memory manufacturing capacity comes online. Currently predicted to happen starting 2028. That is where most of the current hardware costs are concentrated.
On that front, I think DeepSeek is a dark horse. They are really odd - not chasing revenue, care more about unit profitability, are obsessed with driving down costs (like Elon back in the day). As the founder says, they are content with where they are, being the model that does 80% for a fraction of the cost.
I mention them because they are playing a different game and might be able to out-innovate everyone else.
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Anthropic is not in the model business. They were smart and they are building productivity ecosystem business. Look at what claude artifacts are doing now -- inline multi-user editing, comments that users and/or models can respond and take action on, import/export from all common formats. It's at least a Google Docs killer if not an M365 killer.
And claude code as a harness and skill/plugin/mcp ecosystem is far more valuable than any one model.
And coward for long-running tasks, though they're slipping on that one because they're really trying hard not to make Claude an assistant. We'll see if they react to Muse and change course.
But the Chinese free-weight models? Not a competitor. If/when those companies (or others) build vertically integrated productivity stacks on those free models, then we'll talk. Microsoft certainly saw that opportunity but couldn't get out of their own way and are basically roadkill at this point.
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Are today's prices actually the ceiling? OpenAI added a $500 tier pretty recently while lowering capacity for their $200 tier. I wouldn't be surprised to see Anthropic doing something similar soon, particularly once they are a publicly traded company beholden to making shareholders happy.
Even outside of the Chinese models, Amazon, Google, Microsoft, Meta all of them are offering significantly more coherent and competitive internal models and reasonable price.
Why would I pick anthropic.
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Cloud compute has managed to have pretty good margins. That seems like a really similar business model to what Anthropic is doing - inferene+value-adds as-a-service. Why wouldn't they also be able to get cloud level margins or a bit higher?
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Already well documented that there is huge variance in inference serving efficiency; at every layer (model, software, hardware) you have opportunities for gains. Similar to how “the Chinese” haven’t undercut on cloud providers’ CPU offerings, there’s a very good argument that the hyperscalers will manage to keep their vertically integrated hardware/software edge here too.
I don’t really know where this commodification idea came from, maybe MBA types that don’t actually understand how cloud economics work, applying basic first principles analysis?
The operational engineering that goes into serving a frontier model is _highly_ nontrivial, it is not commodifiable. This isn’t a SPA application.
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Today’s prices are a ceiling for today’s capabilities, but not at all a ceiling in general. One could imagine dramatically higher spend for dramatically higher performance.
That depends on whether "frontier" models can maintain an expanding frontier. If the frontier settles, they're dead, and it will be commoditized. Otherwise, there are still plenty of pathological behaviors of these things to address that will keep expanding that frontier (if that's possible and the limitation isn't the approach itself).
The reception of saying things like this is interesting. AI stans think I'm way too pessimistic but AI haters think I'm mindlessly optimistic.
there is no point of saying 'the chinese' everyone will do it because it was proven that any political frills might cause an attempt to damage your system.
I dont know when, but i think if you keep menacing of taking technology of people hands for any political reason will be a reason for people to not use it or to rely in a more reasonable party.
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> Today's prices are the ceiling.
Why? I don't see any reason for that to be the case.
I don't think today's prices are the ceiling, considering they are subsidized. Once businesses have grown dependent on AI (and their institutional knowledge is lost), they will pay much more just to stay afloat.
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100% value fallacy right there.
Point is taken - competition is fierce and will be biting everyone's ankles.
buying anthropic = betting that there is going to be ai breakthrough at anthropic that will put its models ahead. AI stock market = polymarket
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Unfortunately it's now extremely likely that our governments will manipulate markets to keep frontier domestic AI afloat. They are financially and militarily dependent on domestic AI now.
Chinese models are being banned, will continue to be banned by USG. Even the Chinese govt is restricting external access to models now. It starts with banning Govt access to International AI, but will continue to consumer and business access.
> Meanwhile the Chinese are going to undercut them every chance they get.
I wish they were, but I always wonder when people chime in with Chinese models what they are actually doing with those. I have an OpenRouter account and give various models a shot every other month, wishing for an alternative, but I always come back to Claude. Even more so since the switch from Opus 5.1 to 5.5. To me, personally, it's unmatched. Like a year ago it was very different, and I would use other models all the time. But honestly at the time they all felt kind of "meh" still. I just hope everyone is at a good baseline in a year from now on, so I actually have a choice. And then, as you stated, things will get interesting.
tl;dr: I agree
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the market for their valuation is just not there imo. they need to significantly expand into non-coding products and outshine their coding offerings to make it work.
as in, if they capture every single professional software dev and extract $1000 from them every month, their yearly revenue will be like $500B. do your own back of the envelope on that with ongoing costs and consider how unrealistic a goal this actually is.
even worse, the very product they offer is self limiting. if it becomes so good as to actually replace software devs, they will have less customers to extract money from.
their valuation essentially relies on a small percentage of mega users having unheard of levels of spending.
the part about a small percentage giving them most of their money is already true (their rumored $100+ bil revenue as of mid 2026 already outshines all software devs having a $100 max subscription), but they are two orders of magnitude or so away in terms of the actual amounts to make it work.
>as in, if they capture every single professional software dev and extract $1000 from them every month, their yearly revenue will be like $500B. do your own back of the envelope on that with ongoing costs and consider how unrealistic a goal this actually is.
The market for Claude Code is much bigger than professional software devs. It's really anyone who uses a computer. I already know normal people who have been using it for personal software.
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The lawyers and finance folks I know are all using Claude. I don’t think it’s as limited to coding right now as you’re thinking
I agree, I would say $500 billion valuation is fair, they don't have a moat and open models are catching up, they have a limited products with strong competitors, if they have a step change model in the pipeline now would be a good time to release it.
>the market for their valuation is just not there imo
I tried to look for the valuation in the linked document, did you see it or any reference to a valuation elsewhere in anything published by Anthropic? what is "their valuation" that you refer to?
Comments here are not considering what Anthropic is doing with Claude as a product. The models matter, yes. But they are building Claude into the only tool you need to get business done. In the past few weeks they have added slides and docs - a shot across the bow to Microsoft's dominance. If they can pull off building the best interface to get work done, $500b in revenue starts to seem not too crazy. It's more about selling a complete product than it is about selling tokens.
I somewhat agree to what you said, but also, the whole point of agentic coding is that "code is cheap". So I can't imaging companies like Google not having the resources (whether human or token) to build a better agentic assistant/harness than what Anthropic can. I mean Google has a pretty good starting point with Google Docs, etc.
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Yeah I’m really surprised at how little attention this is getting.
I’d say it’s more Notion than GDocs for now, but the direction is clear. Gobbling up all the SaaS in order of descending value to agents.
My bet is on promoting their internal Tasks representation to something more like a Jira/Linear.
But then obviously Slack is another one, and Duet is already starting to build a “Channel” abstraction, so making Duet multiplayer is a clear possible next step.
What is Claude doing as a product that other similar companies aren't also doing, or can't easily catch up on?
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Opus 5.5 is the frontier today. But there are more ways for Anthropic to lose than to remain in that position. I'd take Anthropic stock if you gave it to me but I sure as fuck wouldn't buy into it.
The tool is not a moat when you can tell Opus to build you a better tool.
If you owe the bank a million dollars you have a problem. If you owe the bank a billion dollars the bank has a problem.
The same logic applies here.
Google, Amazon, Microsoft, Meta, Broadcom, Nvidia, SpaceX and others are spending hundreds of billions a year each on fast-depreciating infrastructure to serve this potential AI demand. If the demand never materializes then they know they are in big trouble. So they have every incentive in the world to prop up Anthropic (and OpenAI) and keep the party going.
Can they keep the bubble inflated indefinitely? Probably not, but all these companies combined have heck of a lot more influence than Anthropic alone.
They aren't "fast-depreciating infrastructure" -- research shared by a16z team, rental rates are up across the board, even for GPUs that are 5+ years old. The demand is real right now. The proverbial tide could go out but we aren't seeing it yet.
Source: https://x.com/a16z/status/2113986385908842870
"Zooming out, GPUs are still renting ahead of a standard 6-year depreciation schedule
Rental price vs. schedule: - H200: +143% - B200: +111% - RTX PRO 6000: +73% - H100: +54% - A100: +9%
Most of the gap opened up after April, when token demand took off"
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I have a hard time believing they are likely to get to $500bn in revenue. That’s another $450bn in revenue growth that needs to happen before demand tapers off.
But I see every reason to believe demand will taper off. It seems it’s already happening. Enterprises have been deciding that maybe corporate chatbot and coding agent budgets shouldn’t actually be infinite. AI startups are starting to successfully outcompete each other, effectively killing off members of Anthropic’s customer pool in the process. And consumer demand for AI products seems to be dropping. None of these are signs that suggest that Anthropic has thus far met only 10% of plausible long-term demand.
Total global wages ~$12 trillion/year. The "what you have to believe" here is that AI tool spend becomes at least 10-20% of it, my belief here is we see net slowdown in hiring as human + AI = super productivity so as businesses grow we'll continue to see increase in AI spending.
Then if inference does grow to a $2-3 trillion/year market that Anthropic is a big winner, as big as NVDA is now (they're going to be over $500 billion in revenue in calendar year 2027).
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We will see more (and bigger) "circular economy" deals.
> Everything comes back to whether the demand is really there
And unit economics.
HY1 2026 revenue less compute and infrastructure turned positive (45% gross compute margin; $8.9bn C&I to turn $16bn revenue) for the first time; it was -176% in FY 2025 with $7.3bn C&I on $4.6bn revenue.
It looks like a lot of costs of revenue are in sales, marketing and partnerships, though. Backing those out shows H1 2026 margin at 26% ($4.2bn) after -72% for FY 2025. Still positive.
>Anthropic thinks it is.
Anthropic has no choice, just like you said. It's crush and burn right now or double down.
And they will keep doubling down, because stopping is simply not an option.
> they will keep doubling down, because stopping is simply not an option
Of course it is. Apple is taking that strategic approach. If Anthropic believes it’s approaching saturation, pulling the plug when it’s at steady state and its rivals are over-invested is the winning move.
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Exactly.
That’s why they hire ‘for the misson’. They have to pull off something magical to make all this work financially or they go bust.
These were ~Q1-Q2 commitments based on what Anthropic THOUGHT token maxed compute demand was going to be over next few years. Then Late Q2, and Q3 PRC models dropped floor for token prices. It may very well be that Jevons demand which Anthropic though required 500B of compute now only requires 100B, and unless demand is 5x what they thought, those additional 400B non hardware cancellable commitment are going to be balance sheet concrete shoes.
No it doesn’t. Everything comes back to whether the fundamental business can ever be profitable.
So far not a single company has ever demonstrated that.
Even if demand is through the roof which it seems to be, it doesn’t matter if every dollar they sell costs them more than a dollar.
The filing indicates they are profitable...
Funny animated cartoon from the Soviet Union (has subtitles). You must see this:
“Robbery, Italian Style”
https://www.youtube.com/watch?v=vktTgOr4M1s
(it has a wiki page https://en.wikipedia.org/wiki/Ograblenie_po... )
Marcello Mastroianni is performing a bank heist, it goes well - but in the end he has to return all the money he borrowed. And that's where he is left with nothing...
Now ask yourself what it takes to generate 500bn…
You people are nuts. The failure risk is off the charts.
The OP post is misleading because it makes you think Anthropic has to earn 500bn per year in revenue, but those commitments listed are not yearly commitments, they're commitments over 10 years with contracts that run until 2036.
Anthropic needs to earn 52B a year in annual revenue to honor those specific commitments plus obviously its own operating expenses... and yeah that will require Anthropic to grow as a company, but their S-1 indicates 67.2B a year in revenue and sure maybe they stop growing and this is their peak... or maybe they do manage to grow further to 80B a year, 90B a year...
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People are only nuts if they actually take money they don't have to invest in random companies.
But lets be clear: the growth of Anthropics revenue is very fast and way too many people stll don't even use AI
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There's an unlimited demand for intelligence.
There's an unlimited demand for virtually everything. Whenever we increase capacity for anything, society consumes more of it.
You know how they say, don't keep all of your eggs in one basket? It's really concerning to me that they've got all their eggs on LLMs. They really should have branched out more long ago. OpenAI has a lot of branches they can aim towards.
That's their choice from the beginning, high risk/high reward. Copying your competitors strategy is rarely a good choice.
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I've seen the bills at my org, I think the demand is there for now.
Our claude bills are rivaling our datadog bills and might get to the size of our AWS bills. It's pretty crazy.
The SpaceX thing interests me. They are basically paying SpaceX at a $10B per gigawatt equivalent rate right now, yeah? Because they only get 0.3GW for their $3B.
So what that means is that if the demand exists for any AI data centre, it's a solid business to run one — they cost maybe $50-60B to build out, they cost maybe $10B per year to run. You get your money back fast if the demand is there? And you can project being able to replace with better GPUs in the future without having to borrow for all of it.
But it is extremely difficult to believe that Anthropic is not projecting that all of its customers will ultimately use their service to the extent that their outlier customers do right now. They probably won't be projecting that their customers will find the need or ways to use them less.
And also, "no customer is more than 10% of our revenue" means that one customer is. If that customer is Microsoft (can it be? I honestly don't know) then things get tricky, because Microsoft clearly want an unmetered, on-device AI future.
Coreweave is down 50% with all reports pointing to bankruptcy.
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Not just is the the man there? Will anthropic be able to capitalize on that demand? Or are we going to build so much excess capacity that tokens are going to be dirt cheap (like what happened with the fiber build out in the 90s).
Will anthropics models continue to be significantly better than openweight models? Even if their latest model is, Will the open weights gobble up all of the demand for lower models? (I.e. will anthropic be able to recoup training cost while their model is the best, will they make enough revenue on the long tail or will it get crushed by the open weights)
In the corporate world it seems Claude has become like a generic name for doing anything AI related and there is no hope in getting people to switch away. The demand is there. People love name dropping Claude into everything and even assuming it’s what everyone uses to do anything even when there’s so many alternatives.
Crazy that SpaceX has similar commitments to AWS/GCP. Means it’s very bullish for SpaceX given they produce their own energy turbines and have the best ability to deal with supply chain constraints
Not the whole turbine (yet), but they are working on blades and fins.
For kicks - lets take the optimistic side here (because the whole thread will be reading pessimistic). What if they are under built and this growth continues to go parabolic. We then still have supply constraints and pent up demand for frontier model and you have a company thats currently at 1-1.5 T and levels up to 4-5 T.
I'm not saying I think thats what is going to happen, but it really isn't a stretch to think that this keeps running given that it hasn't really hit anywhere near as broad as we think it has (being HN community based).
Even the smallest margin or error in the demand forecast will put them at a huge loss, I can't imagine sleeping well at night if I was on that management team.
> Anthropic thinks it is.
Does that have to be true? I thought IPOs were about selling the company.
Never mind the fact that companies do not think and this is like saying "My lemonade stand thinks it's going to have good sales this quarter."
It's not just about demand, it's about do you think valuation that prices them into serving 1000x that demand is worth paying for.
The obvious business is rewriting all of our software. That sounds flippant, but I'm entirely serious. I'm of the opinion that all software written by humans will get replaced and in pretty rapid order.
First to fall is the software that has basically been abandoned but industry leading and has sticky customers. We're replacing those right now. Our version is more accurate, ten times faster, and a hundred times cheaper.
The average human spends 100$ per month in food.
> If the party continues, they'll go from $50b in revenue to $500b and be fine.
You really have to be insane to think that an AI company will ever reach $500B in revenue. That's almost the same as (2025) Amazon, Walmart, etc., companies with a MUCH wider market.
It is MORE than Apple, it's 5 times more than NVidia even. There is absolutely no software seller that is even remotely close to $500B in revenue.
Absolutely ridiculous.
I’ve spent more money on Claude this year than I’ve given to a lot of other tech companies, combined. Well, I bought a new phone too - but amortised over the phone’s lifetime it’s still much cheaper than I’ve spent on my claude subscription and what I’ve gotten my company to pay in api usage credits.
There are two questions. Will the value keep scaling? And how much of that value chain will anthropic hold on to? Right now software development is being eaten alive by LLMs. Will that happen to other industries too? And in the long run, what do the models we run look like? Are people going to end up self hosing opensource models themselves, or are we going to collectively hitch our wagons to frontier models provided by anthropic and their competitors?
If ai keeps getting better - which I think it will - and if anthropic can corner a large part of the market in an enduring way - which seems less likely to me - then yes. I can easily imagine them becoming a huge company.
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I think you are underestimating the market for AI. The better it gets the more the market expands.
The total amount spent on salaries in he US alone is over 12T dollars.
Assuming AI becomes ever more useful and is widely adopted 500B in revenue is not that crazy.
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That doesn’t seem ridiculous at all. Replacing clerical and knowledge workers is a vastly larger market than iPhones.
The thing to be remember about those companies you listed, none of them are software companies like Anthropic is.
* Amazon is a logistics company * Walmart is a logistics and retail company * Apple is a hardware company (that uses software to set their hardware apart) * NVidia is a hardware company
The closest you get is Microsoft, at 281B in revenue. Some might argue Google/Alphabet, which is in the same area, but they sell Ads, not software.
Anthropic's expectations is that they will be able to fast-track their revenue generation to almost twice what Microsoft does today. In less than a few years.
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I agree with you from our perspective it is ridiculous. I also agree that getting the consumer market to willingly pay for AI to the point where it sustains such an amount of revenue is not going to happen. (The knock on effects of folks using AI, and turning others off to AI because they used AI instead of writing emails themselves, for example).
But.
They may peak at 500B before this bubble bursts, simply because other major industry players are betting on AI as a means to get folks to believe in their own stock.
It’s belief all the way down, until you get to the point where “the market” starts asking where the return on investment is, and why they haven’t seen it yet. By that time, the investors have gotten their return and cashed out, and it’s the pension funds and the retail traders that are holding the bag.
And of course, at some point AI’s promise will be delivered in a form or fashion as yet unknown to us, but that is still years away, and until folks recognize that LLMs as they exist to day are not the path to that, they’ll continue to believe in this valuation.
Nvidia almost hit 100B in revenue last quarter.
What feels ridiculous today might be the normal of tomorrow. Welcome to the new world.
What you are saying is the same thing that has been said about anyone trying to do anything massive and at scale. Can't be done - thats ridiculous - you are out of your mind.
Broadcom isn't a name I'd have expected to see next to the other three.
There are not enough revenue in tokens, etc. The only way AI ever becomes profitable is to replace labor everywhere. That is the only market big enough to make all the spend in AI profitable.
Their entire goal is to get to AGI via RSI ASAP. If they do they win. But if not they’ll be a legendary story of a flying too high too fast.
That they are IPOing tells me that the massive amount of funding they need is no longer available privately and that this is their 1 opportunity to get the funds they think they need to get there.
Biggest risk is the growth stalls as everyone moves to open weight models. They certainly like telling stories.
So, puts?
If someone just way outcompetes them it's possible they sell their commitments to the winner and still do ok.
> But if they don't, it's going to hurt.
They literally said revenue growth rate "may not be sustainable" and "may decrease".
So get ready for the hurt.
Literally every S1 is filled with these kinds of statements
Those are just standard disclaimers.
Of course such growth cannot be sustained and the word "MAY" is funny there. You cannot have infinity growth, it is mathematically impossible. There are no unlimited (monetary) resources on this planet.
It is a business losing $80B a half on $18B in revenue. This is a trash business.
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> If the party continues, they'll go from $50b in revenue to $500b and be fine.
Heads I win, tails we all lose. GFC Part II.
I do not understand 500 billion revenue? I mean how much is that in terms of tokens burned?
It's a misleading number, the 500 billion in revenue is needed over a 10 year period, it's not a yearly figure. Anthropic isn't paying 500 billion a year for the commitments that OP posted, it's paying 500 billion between now and 2036.
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In the simplest calculation, if you get 200M people on a $200/mo pro max plan, that's $500B annual revenue.
This is a "utility" mindset. If you bet that Anthropic is just like a monthly electric bill, then it's within the realm of possibility.
For the record - I don't think that's gonna happen.
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This is the issue, for two reasons: Is there trillions of dollars of demand for LLMs, which is what it takes for Anthropic to make $500 billion in revenue? Is that demand going to be met by frontier cloud LLMs, or by open weight models run by the organizations using them (and cheaper cloud alternatives)?
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The killer app is AI coding. Claude Code had first mover advantage, was a genuine revolution, and has diffused through the industry with incredible speed. I would imagine most of the huge revenue increase over the last year is due almost entirely to AI coding spend.
There are three issues with this. First, the rapid diffusion of the technology means it is very unlikely to continue at the rate of adoption seen over the past year, so it's very hard to extrapolate based on what we've seen so far. Second, many companies are reigning in AI budgets after an initial honeymoon phase. Third, all of the other labs are trying to take a bite of the coding pie, and the price war is already heating up.
Add these simple dynamics up and it makes perfect sense why Anthropic would want to IPO now. Things look about as good as they ever will.
Just like Alta Vista and Netscape put there first mover advantage to use?
Claude Code is a commodity at this point though.
Codex is just as good if not better. And theres 3-5 other options out there just as good too (harness + model).
I disagree. I've tried Codex, and two of the provider-agnostic harnesses (Pi and OMP), and I strongly prefer Claude Code.
Opus 5.5 is the best deal in doing rn. It will change soon. But its not the case that codex, etc are equivalent
View them as a successful SAAS company deeply embedded in tech company processes like Atlassian. I don't see Anthropic or SpaceX actually having a market on all the software in the universe but I don't know that the market won't buy them like they do.
My brother in christ, there is no first mover advantage. I use claude code daily and if the open ai copies it 1$ cheaper per seat my company is switching immediately.
I've never heard anyone in real life discussing what model is better in some benchmark. Money talks.
underrated comment
There are three mentions of “open source” and none of them mention open source models as a fundamental risk to their business. Interesting.
UPDATE: seems like it is under "open-source" and "open-weight". Woops. Will keep this up simply because I do think the OS (and infra-managed OS services) provided by Chinese labs is a considerable risk to the underlying business, at least with enterprise R&D.
Try searching for it hyphenated (open-source, open-weight)
Oh damn - really good catch. Thank you. Updated my comment.
Open source should not be a threat just like Linux isn't really a threat to Mac and Windows. It all depends on who will get the network effects first (if there even is network effects in LLMs). People pay for windows because of its strong network effects eg Microsoft Office and countless software that run on windows. Even though Linux is free most businesses today don't use it on the desktop.
Opensource also means do it yourself and most businesses don't have time or expertise to do that, but this very issue creates a market for 3rd party providers that use open models to compete against Anthropic. So hardware and compute availability becomes somewhat of a moat.
The business feels like like web hosting before cloud computing. Web hosting in itself does not really have a moat, but than again AWS appeared with their abstractions created lock-in and network effects and disrupted the hosting industry.
Definitionally, from the product they claim to sell, you could just ask Claude to help you migrate to an open source model (if you have the hardware or if you are ok with a subscription) with very little difficulty in the scope of a single conversation. The product they're selling is capable of helping you stop using it. And there's very little friction to use other products too, unlike linux vs mac vs windows, where program compatibility is not as trivial (although with WINE, Rosetta, and WSL, it is actually decently easy nowadays). In this case, you're just calling out to an API with a harness. And even their harness is capable of using open source models.
I feel like it's different from all other cases because it's the first product which can literally obsolete itself, lol. It can show you the door and walk you through it if you ask it to.
The network effect is way weaker for LLM's. Switching from AWS to GCP or Azure is at least a multi-month project for an engineering org, if not completely operationally impossible. Switching LLM providers is at worst asking your engineers to install a new coding agent client, and at best switching a URL and API token in your config file.
If Linux (and BSD) didn't exist, imagine how much money Oracle, Microsoft and Apple wouldn't made on servers
Linux is threat to Windows server.
Regarding moats: it's been said by everyone else, but it doesn't seem like Anthropic has a moat. Everyone can easily switch from Claude to Codex, OpenCode, Pi, or any of the other zillions of harnesses. They can even have Claude do the migration for them if they want and it will oblige – that's what I did when I canceled my Claude subscription.
The idea that hardware and compute is their moat is interesting, but open/local models become more capable each week. As I write this, I have 3 instances of some no-name model working on 3 separate worktrees on my M1 Mac Studio. It was viable for me ages ago, and I'm not an AI enthusiast (I just happened to have bought a Mac several years ago that can run these models). I haven't paid Anthropic or OpenAI a cent since the early part of 2026.
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Ant generates $2.08 in revenue for every $1 spent on compute which is up from just $0.40 in Q1 2025.the payback period for compute is just insane, likely less than a year!
I wonder how the "It's all heavily subsidized!" people are going to spin this.
Say I open a premium lemonade stand. I buy Walmart lemonade for $1 and resell it for $2. I have around 10 customers a day, but 2 of them buy 1,000 litres of lemonade each. The rest just buy a single cup. I'm making amazing profit.
There's just one detail: those 2 high-volume customers are buying my lemonade and re-selling them at a loss for $1 at another neighbourhood. Supposedly some high-profile Japanese bank is financing their lemonade purchasing expenses for eye-wateringly high interest rates. I've heard its well into the double digits. But that's not important, because the future is right around the corner - I can feel it - and in the future everyone wants lemonade. Thousands of litres of it. So even if those two customers go away, things will be fine!
It will all work out in the end. This is a totally sustainable business model. In fact I'm even thinking of going public.
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First of all, revenue exceeds compute just for the most recent 2 quarters. Before that, revenue was not exceeding compute. With 500 billion $ in commitments over the next decade, the compute bill will start increasing rapidly and the new commitments are not at the old prices, they're at higher prices.
Second of all, revenue is not profit. So even if they made 2.08x revenue on every 1$ of compute spent in Q2, that's not taking into consideration all the other costs. Hence, the operating income is still negative for 2026 so far.
You can bet that revenue will keep increasing much faster than the more expensive compute commitments come due, but if that doesn't materialize, things go south real fast. Anthropic is going public with a deficit, so more liabilities than assets, so cash is tight to begin with.
I'm not really in that camp, but I'm still in the camp of "will they survive long-term if good enough open models trickles down to commodity hardware" (in a way the opposite camp perhaps?).
Sun made bank 25 years ago because their servers was needed for websites, today we run larger workloads on 5$ VPS servers (well maybe the VPS servers has gotten more expensive due to HW shortages but they're not intrinsically expensive anymore).
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Subscriptions are heavily subsidized. 80% of their revenue comes from consumption-based pricing, which is not heavily subsidized (and probably not subsidized at all). The trouble is that this revenue is not especially reliable. If and when OpenAI gets the upper hand again, the consumption-based revenue could crater.
This may also be why OpenAI punted on their IPO: Anthropic has had the lead for most of 2026, so their consumption-based revenue is probably not looking pretty.
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A podcast posted here recently had this number: 80% of ant revenue comes from just 8 customers. The consensus of the speakers was that if true, this would be indicative of a very vulnerable revenue structure. But this was based on leaks. Maybe we can have the real numbers now?
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It's interesting to note the anthropic marginal cost of compute is quite high (the SpaceX deal). Claude estimates SpaceX are charging 3x as much as the anthropic average! If that is correct then a few interesting things are going on:
1. Anthropic are probably losing money on the SpaceX deal or not making much at all.
2. To be willing to pay a spot rate so high anthropic likely have no better options.
3. Many of the existing cheaper vendors are likely doing "we will give you cheap compute for now if you give us big commitments"... (cf. hyperscaler capex spends)
Which I suppose is to say that if the spot prices are in the same ballpark as future costs then anthro stops looking profitable pretty quickly. If you're especially bearish you can also throw in the huge reduction in token prices recently and that SpaceX is charging google almost 2x as much as they charge anthropic!
Happy to be corrected by someone more knowledgeable.
Revenue is not profit?
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It’s still the case. Subscriptions are heavily subsidized
Unfortunately for you - youre the pleb here.
If you’re not generating enough revenue to cover ALL expenditures - you are in effect subsidising as you should raise prices.
Why haven’t they? It would harm their business.
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They’ll just keep saying it is. That’s what they’ve done so far with DS
my thesis is that it will go down and not up over time. The moat they had in coding which is by far the highest token consumption is not that huge compared to Nov-Feb period where token maxxing was prevalent and no other vendor's model was that good.
Less than a year would also match what DeepSeek was reporting, where compute pays off in just 10 months. I think they also said they had an 80% margin on inference.
Assuming computing costs do not go up and revenue per customer does not go down.
I think the 500 billion $ of compute commitments are at higher prices than what they've been paying so far. Would be a shame if a price war between the AI labs intensifies at the same time.
Hmmm
Does that include R&D?
Over time that margin persists only if they maintain their competitive edge, which is not free.
It includes compute and infrastructure for R&D. Then you have to add just over a third of their compute spend for personnel, another expense of that size for sales and marketing, and half that for other admin/ops costs, for an operating loss of 693M. Then a bunch of accounting stuff to end up losing 80B
I'm not sure I'd call it a great result, but it's a promising one. If they can increase demand without significant changes in margin or R&D spending, they are on the path to becoming very profitable
The way I read it, it does. It looks like total revenue vs total compute expenditure.
Impressive, but probably based on depreciation servers over 5 years. But is that realistic? I wonder how many people are still using 5 year old servers in their AI training or inference.
When will generic AI compute capability trickle down to us plebeians?
In the open weights scene, it is always chasing closely behind. Many leading edge big open models are trained in-part with distillation of large commercial hosted models.
It already has. If you have a gaming GPU you can run AI locally.
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Seems like that would imply you should be getting people to adopt now now still even if it costs a stupid amount, if you think it's valuable, rather than limiting token budgets. It'll only get cheaper over time.
ANT stock valuations might be high at listing, but it will be a good stock to add on declines. Great numbers!
Just renting them out as hardware is close to 12 months.
Including training?
Yes, this includes training and internal company usage.
That's their API cost price. No one will pay this on that scale? People are using tokens via their Max Plans?
Enterprise pays the API cost price
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Why are you ignoring the $80.7 Billion loss?
$72 billion of this $80.7 billion loss consists of non-cash accounting charges— related to convertible debt—triggered by a surge in the company’s valuation.
The hardware related liabilities are staggering.
AI psychosis is real.
That's sort of a paper loss though. E.g. they made an agreement to give X% of stock for something, and now the stock has gone up a ton, so that X% of stock is worth a lot more than when they made the agreement. For accounting reasons this gets parsed as a loss. But they're still "paying" that same X% of stock, so it's not cash out the door.
Maybe not great, but a good problem to have if it means your stock is skyrocketing.
> $72 billion of this $80.7 billion loss consists of non-cash accounting charges— related to convertible debt—triggered by a surge in the company’s valuation.
Explain what you think this means.
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I don't think you understand what you quoted. The reason for that loss is because their valuation skyrocketed. If I promise you 1% of my million dollar house, and then the price of my house grows 100x. On paper, I now owe you .99 million more dollars than I owed you before, but that doesn't mean I lost cash.
This is not what "AI psychosis" colloquially refers to. Few people have any firm opinions about the nature of cost accounting on LLM products.
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From the "Risk factors" section:
> If the use of our AI models results in harm, whether through use by malicious actors or misuse by other third parties, or if our model guardrails or safeguards fail to prevent such misuse, our reputation and brand, business, financial condition, and results of operations could be adversely affected.
That shouldn't be an 'if'.
Then, two paragraphs later...
> For example, in September 2025, we detected and assessed with high confidence that a Chinese state-sponsored hacking group manipulated our Claude Code tool into attempting infiltration into roughly 30 global targets...
But they should mention when the calls com from inside the house. :D
Interesting to review all the mentions to China and Taiwan too.
> The majority of the world’s most advanced chip manufacturing capacity is concentrated in Taiwan, primarily at Taiwan Semiconductor Manufacturing Company [...] potential disruption from geopolitical tensions between Taiwan and China [...] Efforts to establish sufficient advanced chip manufacturing capacity outside of Taiwan, including in the United States, remain in early stages...
The thing the surprises me is that from a legal perspective, (NAL) it sounds like it makes sense not to host the LLMs. Merely to license them to others. Then it becomes a dual use tool like any other and their culpability drops.
For example, the huggingface hack is absolutely OpenAIs responsibility and they should be sued to the hilt. But if someone else uses a self or third party hosted anthropic model, they can escape liability (mostly?)
Same as with the argument over trucks, knives, and any other dual use item is used as weapons. you don’t blame the manufacturer.
(I am merely pontificating here. The law and precedent is nowhere near caught up on this)
To the extent they are representing that Claude is potentially sentient, there could be some VERY interesting principal-agent theories (agent in the traditional legal sense) that need to be ironed out to determine liability. It would not shock me to see someone forced to answer on the record as to whether Claude is an autonomous individual for legal purposes in the next couple of years. If they represent that it is, they'll have to explain the scope of its authority and such.
The answer to this question represents the difference between throwing a hammer at someone - the hammer is essentially just an extension of your body - and paying a hitman to brutalize someone. In the first case, you're only on the hook for assault or battery; in the latter case, you're potentially on the hook for conspiracy, solicitation, etc.
And then there is of course the question as to whether Claude is the agent of the user prompting it or of Anthropic itself. But, as you say, this is a wide-open legal question.
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Not hosting a defectively designed product doesn't obviate the liability of selling a product that is defectively designed. The liability is for designing and selling a dangerous product, not for hosting it.
Firearm companies sell objects that create harm all the time, even if they have protective uses.
Why is AI singled out as being harmful?
Guns are also singled out as being harmful and are surrounded by endless regulation. Last time I checked, I couldn't just order a gun on Amazon....
Because the AI company CEO was telling everyone who would listen that his product might end humanity if the government didn't regulate his industry to kill off his competitors.
I don’t like the guns don’t kill people; people kill people argument however it is much more accurate than Claude doesn’t hack people; people hack people. If the safeguards do not work then there’s no telling what these could do. It doesn’t even have to be aggressive hacking. In the act of doing everyday work Claude will happily go around safeguards to satisfy what it believes is the ask. If that involves doing something dangerous it’s much more on Anthropic than than the user who was just trying to summarize their email but forgot to include a token with read permissions.
I don't entirely disagree, but I am curious if you think AI labs should be culpable when they go rogue during training, e.g. the HF incident
If the user is held accountable when the AI goes wrong, it discourages too many applications. Blaming people is incompatible with the business goals, I think. That's very different from weapons and other dual-use tools.
Because of scale, potential for automating harm and lack of regulation around ML models. Even Texas probably has regulation around firearms and limiting the blast radius but there aren't any in the US against ML models.
If I use a gun to break into a company and steal data I'm arrested, if an ai company does it, it's legal.
Why am I being singled out?
I believe what they are singling out is that pulling Claude's trigger results in a bullet firing from Anthropic's servers. Liability is less confusing with firearms, and investors care about liability, like, a lot.
The analogy doesn't check out. When a firearm company sells you a gun, they give up ownership of the gun. But Anthropic isn't giving up ownership of anything. They're a services company.
A better analogy would be a firearm company offering a service where one of their employees takes one of their guns and fires it off at whatever you ask them to. One can imagine that the liability implications of this service would be rather different from the perspective of the company.
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Because your typical firearm does not one day decide to shoot your neighbor all by itself.
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First off, this is bs. Firearm companies make small machines useful for defense, and they are used for that more than for harm. You wouldn’t make this argument about knives or baseball bats. More people die per year of heat stroke in Europe because of lack of A/C than by guns including suicide (2/3rds of all gun deaths) in the USA every year, your comments would never reflect this much lower hanging fruit if it was really “just life” preventable death that you cared about. The immediacy to attack guns is not a logical argument but a trained one based on emotions.
Second, this happens all the time that people blame tool makers despite in this case specific legislation to stop lawfare on firearm mfgs. The PLCA https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_... exists specifically because of gun control groups trying to attack mfgs to achieve their political goals. Does AI need the same law? Is the same lawfare happening?
| Quarter | Revenue (USD billions) | QoQ Growth |
| Q1 2026 | 4.731 | +131.9% |
| Q2 2026 | 11.555 | +144.1% |
| Q3 2026 | 16.800 | +45.4% |
The growth rate slowed in the latest quarter, which I think is why they decided to go public now.
Yeah the finance team started seeing how much "tokenmaxing" was costing and how little it was returning, so now everyone is slashing spending.
not because they did the first quarter in net positive?
Yep...
So at the moment they claim to be making an operating profit if you exclude:
- Stock-based compensation expenses
- Non-cash charitable contribution expenses
Both seem fairly reasonable to exclude (although it depends how much of the stock compensation is for executives... you can't necessarily pay people with stock forever).
FMost of the loss is non-operating losses, and it all seems to be weird accounting recognition of changes in value of their stock, SAFEs, etc. - just "paper" losses.
So the financial picture looks a lot better than I would have guessed - I suppose because they aren't the ones investing all this capex.
If the stock comp is dominated by early grants running their course, probably ok.
If they have to keep spending to retain and recruit, it’s a problem. I’ve seen companies do this. Years after the pre-ipo grants ran out running a GAAP loss due to employee stock comp. Unable to lower comp (need to stay competitive).
and those charitable contributions probably include a bunch of marketing partnerships and their security work that would be very bad to back away from...
About a quarter of Anthropic's revenue for the nine months ended 9/30/26 came from just five customers. That's not an absurd concentration, but I would be very interested to know who they are and how mobile their business is. From a financial perspective, the lack of moat seems like the whole ballgame, particularly because they're getting ~80% of their revenue from consumption-based spending.
Moat? An under examined aspect of AI is not just the lack of moats, but the need for some word that connotes the opposite of a moat. I have a side project that I used to explore local AI. I've got a configuration screen that lets you download any model from Huggingface that's compatible with the local AI engine. There are dozens! I've only scratched the surface of trying them and comparing them for the features that use AI. It's a glut, and it's likely to be that way throughout the AI market.
Under examined? No. This is a very common talking point.
A glut of models doesn't mean there is no moat. There are several dimensions on which to compete, and it might turn out that being able to produce models that optimize on different dimensions is a difficult and valuable thing to do. It also might not, but the "there is obviously no moat" only comes from people who don't use these things systematically.
If one or more are AWS, GCP, etc. that would make a lot of sense. Connecting to Claude via API via AWS Bedrock is really nice.
Back when I was at Amazon they used Anthropic models almost exclusively. Not sure how much that's changed in the last year.
I wonder where the China labs supposedly distilling anthropic models rank among the top customers
true, but it's also super easy to switch models via Bedrock (my harness switches subagents between A\, OAI, Kimi, Grok, etc... GLM 5.3 is locked behind some dumb request system which I personally believe is because Amazon is heavily invested in A\) and you're not locked in with the Claude Enterprise features (i swear to god if someone sends another claude artifact instead of publishing to git...)
Think of that dependency tree -- those 5 customers have how many customers on their stack?
At a guess - corpos like Big 4 consulting agencies and some extreme fintech ones, also corpos like Oracle and the like. And at another guess, outside of a legal agreement with a fixed time period, probably nothing hold them from quickly switching to a better model provider, if any comes ahead.
I'd say more likely the FAANG type companies, suspect big 4 are much smaller.
But the FAANG customers are the opposite of sticky, given that they all have their own models.
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lets' just say there’s a lot of ways to hide things. primarily they have issued a lot of convertible notes /stocks to the people supplying their compute, which is not counted as costs of compute. There are also a lot of way to shove costs into sales and marketing - i.e. any free tier stuff given away to users are not counted in gross margins. their q3 numbers also not there. smells like they are desperate to get this thing out.
> there can be no assurance that we will be able to hire sufficient support personnel as and when needed, particularly if our sales exceed our internal forecasts
Why would they need support personnel? Isn't their whole point that Claude can do that
For first-level support that's just regurgitating documentation and debug procedures I agree. But when it comes to actually executing actions (resetting 2FA, issuing refunds, handling payment glitches, etc) you need humans.
Social engineering is an issue with regular support, with agents it's a lot worse. And with agents it's repeatable: if I find one conversation flow to get it to give me money I can instantly repeat that with a thousand fresh accounts, and then share the same "exploit" on reddit for everyone else
Support chatbots and other automated support mechanisms have been "regurgitating documentation and debug procedures" since the 90s, if not earlier.
If frontier AI deployed at frontier labs is not capable of "resetting 2FA, issuing refunds, handling payment glitches, etc." then the current and near-future capability of AI is being severely overstated.
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But when you need actual intelligence...
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A different picture if you include Q3 data in their chart.
https://x.com/billylo/status/2114730642881544285?s=20
Q3 data from their pre-IPO investor roadshow.
Dealroom / Wall Street Journal on Q3 data https://dealroom.co/news/164610-anthropics-draft-s-1-reveals...
Bloomberg reported the same data. https://qz.com/anthropic-q3-revenue-adjusted-profit-ipo-inve...
Seems roughly the same story to me. A bit more competition but good growth and healthy multiple of compute.
That link isn't working for me.
fixed. https://x.com/billylo/status/2114730642881544285?s=20
Adding a zero to revenue every year is wild. Regardless of whether you like Anthropic.
That's not so hard when you're also adding zeros to the funding.
> not so hard when you're also adding zeros to the funding
Plenty of counter-examples, including the entire dot-com era.
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14x YoY revenue growth, with 3x lower operating losses (total, not per unit). They don't need to add any zeros to the funding and seem like they might even be operating at a profit soon...
Yes, it is
WHAT? Not so hard? Clearly written by someone who comments from the sidelines.
Growth at that scale is hard. I don't care if you don't like the company - it still hard.
It will be even more wild when investors will notice growth slowing down.
The S-1 is already out of date. Q3 revenue is $16.8b compared to $11.6b in Q2 (reflected in the S1).
I get why revenue blew up from say from Q4 2025 to Q1 2026, but this was surprising. 45% QoQ growth. When does it stop?
Wait, it fell from 140% growth to 45% growth and that's a good thing? If they fall to 15% growth in Q4, will that be even better? Where are we supposed to be on the adoption curve?
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> When does it stop?
Roughly a week after Dario has rung the bell. Note that the growth in absolute sense hasn't peaked yet but the curve itself is already flattening and everybody with some sense for stock prices will read that as a very relevant signal.
The party that wins here is NV, Anthropic, not so much. But that's good then Dario and his sister can go back to improving the world. Let's hope they take Altman with them.
Now, hence IPO.
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Isn't the rate of growth already flattening? Most companies are already cracking down on excessive token spend and setting up pretty low limits.
And some of the big spenders have their own models.
2.2% of U.S. HOUSEHOLDS are subscribed to AI
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Not so wild when you add two zeros to hardware-related liabilities...
Dario Amodei owns approximately 1.4% of Anthropic.
Anthropic valuation → Dario's estimated stake (1.42%)
$1 trillion → $14.2 billion
$1.5 trillion → $21.3 billion
$2 trillion → $28.4 billion
I'm just happy they aren't calling it "Super intelligence" in this document.
My main thing is - why would I buy their stock at the rumored valuation? Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over the world.
If you could go back in time and buy $1000 worth of Amazon when they IPO'd, it would be worth 3.3 million today. Because Amazon's stock value has grown on average 30% year over year for 30 years. Amazon's valuation when they went public was around 400 million.
How much can Anthropic reasonably grow from a 1.5 or 2 trillion dollar valuation? If we want them to grow even half as much as Amazon they'd have to be worth 5.9 quadrillion dollars by 2056. That's 5,900,000,000,000,000, a 16 digit number.
IPOs used to be necessary for growth but that hasn't been the case for many years. Private markets are now so large that the only purpose of an IPO is exit liquidity for employees and early investors. This change has been a major driver of inequality in the states and there are a number of proposals to make it easier for the public to participate.
It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc. are the ones who capture all of this growth and not the public, as would have been the case in the previous generation.
One might ask why the public markets would even offer this liquidity. One important answer is that they are forced to via index inclusion.
So if you know an index buyer who takes satisfaction in staying above fooled-by-randomness active traders, remind them that that they are now the designated unload zone for shares the privates don't want anymore.
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You can thank the JOBS Act of 2012 for that
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> It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc. are the ones who capture all of this growth and not the public
the public could buy google, m$, nvidia and so on and benefit from that growth, no?
Anthropic would not have scaled this quickly if it was publicly held. Perhaps, that would've been a good thing.
> It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc.....
Three of those four are public companies, so the public can absolutely participate.
In many ways investing in a very late IPO like SpaceX, Anthropic, or OpenAI is the worst of all worlds for the public investor.
On the one hand you'll never see a 100x return – that's been captured by private equity. But there's still a lot of long-term risk because these companies haven't proven they can deliver free cash flow to justify their valuations. Investing in SpaceX or Anthropic at $1T valuation is very different from investing in Apple or Nvidia.
And think about it.. Because they're so large, Index funds are buying at most 1 year after going public.
The average investor has been lulled into feeling the index is riskless.
I suggest everyone to find a video online by their choice of podcaster interviewing Mike Green to learn more
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The guy from SemiAnalysis said this too. If he buys Anthropic now at $2T and they go to zero, he's fucked, but if they go to $20T, we're all fucked.
They're not really a "good investment" unless they are literally worth more than combined GDP of the entire planet, multiple times over. I don't think I'm buying shares of Weyland-Yutani here, but they sure are acting like it.
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If they grow to 20T then buying the index will also be a good investment but with a good risk hedge.
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Good point - in a way, if we get AGI, investors have financed the way to their potential undoing.
The term singularity is worn out, but the physics parallel is quite apt - a point where the known gears of economics stop working, and it's unknowable what's there until you get there.
What if, here me out, you got to share in the profits of the companies you buy shares in? Let's call those payments "dividends". Theb it doesn't matter how much shares go up in value.
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> if they go to $20T, we're all fucked
Maybe I’m naive but I expect any kind of “we’re just taking over the world now” event with any AI company will be met with enough resistance from 99.99999% of the world’s population that they’ll have to make it a sweet deal for us if they want to survive.
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the technology isn't the company yeah? maybe AI will take over the world but it's unlikely to be a single firm
> Amazon's valuation when they went public was around 400 million.
This isn't just an Anthropic issue, but more and more of the upside of companies have been captured in private markets prior to IPO for around the last decade. This is a consequence of so much money floating around, that IPOing is now the last stop on the train instead of one of the early/middle stops where a company actually needs to raise money.
This is more of a critique of a broken IPO market and the rise of availability of immense private capital. The public are denied access until the private markets are essentially tapped out.
IPO returns have been horrible for years. Past 5 year returns on S&P is ~80%, on NASDAQ 100 about 100% while IPO's have returned 10-15%.
IPO returns for IPO buyers who hold past lockup expiry, yes, it's been really bad.
Biotech IPOs are even worse. There are 5-year segments where only about 1 in 40 biotech & pharmaceutical IPOs trade above their IPO price at expiry.
On the flip side, in biotech, biopharma and SaaS, 2025 IPOs had nearly 10x the valuations of 2015 IPOs. So you may trade below expiry, but the structure of the earlier deals you participated in, you make way more money anyway.
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Which begs the question, why even go public?
Can it be anything but, to put it crassly, 'exit liquidity'? The IPO _is_ the reward for effort of the past few years, as opposed to a motivator to grow and scale for the next few years.
> My main thing is - why would I buy their stock at the rumored valuation? Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over the world.
I didn't buy Amazon in the early '00s for this reason, and I won't buy Anthropic for this reason. Maybe I lose out, but I like to invest in stocks that look like good investments.
Regardless of how you felt about Amazon as an investment when they went public my point is - they actually the potential to grow as much as they did. I don't believe Anthropic has the potential to grow even a fraction as much.
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Trading vs investing my friend
The problem with your reasoning is that something can be a good investment and not have the growth trajectory of Amazon. You can't pick the (more or less) maximum growth example and then say anything less is a bad investment. Anthropic doesnt need a 3000x return. They need to beat alternative uses of that money.
Your argument that it's overvalued isn't really tethered to anything. It's about as whimsicle as the people saying "well it's worth any price because AI is the future." Of course the price matters.
Here is some way to start thinking about it. A lot of mature companies trade at 20-25x times earnings. So $2T needs roughly $80–100B a year in profit eventually. At 25–30% net margin, it means about $300–400B in revenue (something like Microsoft). Or 20%/450B (Google) or 10%/800B (Amazon). Anthropic is still growing rapidly. And intuitively i don't think it's crazy to suggest they may look like one of the current big tech companies in the future.
>Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over
Absolutely not. Not even close to true. They dont even need to become the biggest company.
Ok, but I don't want Anthropic to be worth 2 trillion. Because then I'm just breaking even. I want, lets say, 5x that. I don't think anyone would buy it for only that - but even at 5x they need to be making $400-500B a year, 3x what Microsoft is currently making.
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I disagree. AI is supposedly a more disruptive technology than a simple e-commerce website created by a single dude.
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It’s a great question. It’s a rational line of thought. However, the market can stay irrational longer than you can stay solvent (if you were planning to go the opposite way).
Oh I'm certainly not betting against them in the short run. I mean people are out here buying Tesla and SpaceX still.
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Jack Clark (says that he) thinks that US GDP could grow by 50% by 2030 [0]
> Speaking at the 2026 Per Jacobsson Foundation Lecture during the IMF and World Bank annual meetings in Bangkok, Clark pointed to an extreme economic scenario modeled by Anthropic economists in which U.S. GDP could reach roughly $44 trillion by 2030, which is a nearly 50% increase from the current $30.77 trillion in just four years.
If the total value of US public companies also increased by 50% in that time, they'd collectively be worth about $112T. I guess Anthropic could be worth 10% of that in some scenario? And if we're in that world probably capital has increased a lot faster than labor so US public companies could be worth like 150T or something. Who knows. Nothing about valuations makes sense any more, so what's one more drop in the nonsense bucket.
[0] https://finance.yahoo.com/technology/ai/articles/anthropic-c...
Well I think it'll grow by 70%! I'm a thought leader now, speaking fees on asking thx
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I mean they're basically printing money and making up new formulas to calculate GDP and inflation, 50% is low, let's aim for 500%
who gives a shit what Jack Clark thinks? I’d be shocked if anyone at Anthropic did. In an industry full of grifters and leeches you’d be hard pressed to find a bigger one.
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People said similar things about facebook, and similar things about Nvidia stock recently (not ipo, but similar "why buy at this price"). Global GDP is over $100 trillion every year, there is a lot of business to do in the world, AI might be able to do a lot, it might be very profitable.
The number might be too high, but doesn't take more than a little imagination and some basic facts about the world to see how it could be worth 20 trillion in 10 years.
Not if we get run-away inflation ;)
Discount rates get updated to reflect it… just fyi
This comment is just repeating a point made in Casual Finance's youtube video here: https://www.youtube.com/watch?v=roe3SgezmmU (timestamp 1:06)
the irony that this argument was made by an AI account is now being copied to argue against the value of the company responsible for making it
Don’t worry AI will tell us how to time travel, you can get your AMZN no problem or just a sports almanac from the future… infinite growth if you can travel into new dimensions :-/
As explained very well here https://m.youtube.com/watch?v=roe3SgezmmU&ra=m
I'm not suggesting you invest necessarily, but I'll give you the counterpoint.
Amazon would have gotten you rich, but it wasn't there when it IPOed. Anthropic is growing fast, at 4.7B, 11.6B and 16.7B last 3 quarters.
I think people want to believe that AI will be both productive and replace traditional search / ad revenue, which would give it a solid standing for valuation...
To be fair, if you told Amazon investors in 1997 that their investment would go up 3,300x and Amazon would be worth $2.7 trillion in 2026, they’d have called you insane too. There isn’t a mathematical reason Anthropic can’t be worth that in 2056. I don’t think it will be, but not because of the compounding returns.
Einstein once said “compound interest is the eighth wonder of the world.” It’s very hard for humans to comprehend compounding returns.
Let me put it this way.
For Anthropic to show similar returns over 29 years, it would be valued at many times the current total market cap of the S&P 500. At Amazon’s current value after 29 years of growth, its market capitalization is about 1/3 the total market cap of the S&P 500 at the of 1997.
It’s quite hard to justify that in terms of future cash flows. At even a quadrillion dollar valuation and a 20x revenue multiplier, they’d need $50 trillion in revenue… or roughly 1.5 quarters of current US GDP.
So while mathematically possible, it’s quite improbable.
> There isn’t a mathematical reason Anthropic can’t be worth that in 2056.
"There isn't a mathematical reason Anthropic can't be worth 165x the actual US GDP by 2056".
We don't buy public companies expecting AMZN level return from every single one of them.
I think the strategy is to IPO with a massive valuation and a small amount of float and then hold the valuation long enough to get into a cap weighted index like the S&P 500. At that point investors can harvest the monthly inflows of global investors who blindly dump money into passive index funds.
The thesis here is that in the past short sellers would short sell overvalued stocks in the index and buy undervalued stocks and drive price discovery and that those mechanisms are broken due to:
- Passive index funds dominate the market and swamp the ability of active traders to drive price discovery
- Massive returns of these funds over the last 15 years have made beating the benchmarks difficult and leading investors away from actively managed portfolios
- The rise of meme stocks, options trading and crypto bro traders driving out hedge funds and institutional short sellers - Stock tickers and crypto being seen as disconnecting from the US Treasury’s as an anchor for risk free returns to a “Snow Crash” model where assets represent a stake in a new world order.
Here's a random anecdote for you:
Back in 2018, I sold a bunch of Nvidia stock. I had bought it in 2014, when deep learning was taking off, and it had gone up 10x since then. It was obvious that all the growth had been captured and it was time to get out. I remember feeling pretty smug about timing things just right.
Nvidia's market cap in 2018 was around $150B, and the largest company in the world was Apple at ~$800B. And part of my thinking at the time was, well... Nvidia is already worth about a fifth of the most valuable company in the world. How much can they reasonably grow from this valuation?
In hindsight, I can tell you: the answer is 35x (as of now, and who knows in the future). The idea that any company, much less Nvidia, would be worth $5T within a decade was laughable back then, and yet, here we are.
Nvidia going 35x from $150B doesn’t answer the parent’s point. Matching Amazon’s returns from IPO would require a vastly bigger multiple from an already much higher starting valuation. “People underestimated Nvidia” isn’t an explanation for how Anthropic gets to a quadrillion dollars. It can be hugely successful without giving IPO investors Amazon-like returns.
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Nvidia at $150B however wasn't representing anywhere near 5% of the US GDP.
If ANT lists at 5% of the US GDP and goes up 35x, it'd be worth 175% of the current US GDP.
Except in some hyperinflation scenario, I don't see how that makes any sense.
the market cap of the world's most valuable public corp has grown at ~24% annually over the past decade (Apple @ 2016 vs Nvidia @ 2026)
in 2016, who would've thought this kind of growth...
The reason to buy any individual stock is you believe it will outperform the market as a whole over N years. If you think all the growth has been captured already and Anthropic will stay below opening price + market growth forever then of course you shouldn’t buy it. But plenty of people don’t think that.
But why would we expect Anthropic to outperform the market over N years when they're opening at such a high valuation? It feels like most of the potential future growth short of world domination is already priced in.
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I feel like you're treating the stock market like a horse race. Amazon outpaced the stock market by 3x over the last 30 years, and it's just incredibly unrealistic to make that the standard for buying a stock. Anthropic shouldn't be expected to increase any more or less than the rest of the market and that's if you don't believe there's a bubble. (A bubble is by definition when prices don't reflect actual value)
The only reason to buy this stock specifically is if you think it will outperform the market though, otherwise you're taking a more risky position with no upside.
Put another way, the risk has to be worth the potential reward - expecting Amazon-like returns might be unrealistic, but what level of returns would be necessary to counteract the amount of risk you're taking on if you buy Anthropic stock? And what kind of valuation would Anthropic have to reach for that to be possible?
Exactly. And for every Amazon, there's 100 companies that no longer exist.
It makes more sense if you only look at it from the perspective of personal finance.
If I expect Anthropic to perform as well as the market, I can lower my risk substantially and see a lot of its upside with the right mix of ETFs. It doesn’t make sense to take on all that risk if I have a much less risky path to the upside. On the other hand, if I expect it to outperform the market, it might fit in my high risk bucket. So from the perspective of individual investors, it’s about matching risk levels and returns.
Buying for dividends?
"How much can Anthropic reasonably grow from a 1.5 or 2 trillion dollar valuation"
Bahhaa. I love it when a normal guy just exposes the issue. Yes. 10 trillion is getting close to us GDP lol.
Love one of the last lines in the introduction. "bring forth an age of miracles". Lacking in optimism and ambition they certainly are not.
I mean, I understand you’re using your brain to do this analysis. But somehow, the valuation will grow and investors will make money.
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It's AGI dude, your calculator can't even reach the valuation multiplier needed to compute your gains. /s
Valuations are a function of growth rate.
Anthropic growth rate is truly unprecedented at it's scale.
They are 10x revenue YoY.
Note: I'm not justifying it, just explaining how the markets are rationalizing it.
If I was selling dollars for 50c and Nvidia, alphabet and Amazon giving me dollars for a piece of my company, my revenue growth would be the same. That’s what Anthropic is doing.
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Stop posting nonsense ok?
Valutions are a function of cash flows, growth of those cash flows and risk. Don’t forget to discount properly on your way out.
Hackernews commenters generally dont care about the Anthropic's financials because they have unassailable grievances.
At $2T Anthropic would need to look roughly like Alphabet today by 2030 for investors to earn a normal market return (20-25X earnings). That or similar baselines should be the basis of discussion, not if AI is overhyped, if it will grow faster than Amazon did, oligarchy(?), etc.
Why would you expect this to be a magical making money stock?
Unless you have special insight, you should assume all stocks are equally good buys.
There's not going to be an IPO at a price where everyone agree that it'll see a 30% growth over 30 years. Obviously that'd be priced in.
"Unless you have special insight, you should assume all stocks are equally good buys."
Lol maddest thing I've read all day
"priced in"
I smell your efficient market hypothesis argument, before you even begin just keep in mind that does not apply here, it's an IPO, the price is not set by the secondary market
Even so, I'm not a fan of EMH
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I think the argument is that the valuation is so high because the enormous growth IS priced in, but still being far from guaranteed. Meaning there's only downside: if the enormous growth is realized it would be a wash for your investment since it is already priced in, and in the plausible scenario it fails spectacularly or only grows moderately your investment will lose a lot of value.
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In today's world, yes.
But in the past, rules & regulations basically forced companies to IPO at a certain size. This meant that when they IPO'd, there was still growth upside.
Those rules are gone now, so they can stay private and have all the growth happen privately. When they IPO now, it's more just an exit. The growth was captured by insiders only.
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But those other ones at least have the room to potentially do that, even if most won't. So what GP is saying is that this is a magical stock indeed, but the other way around, in that it's magically capped.
The point OP is making is that it is not, in fact that its the opposite: its a magical valuation that almost guarantees you lose money.
Also rare for an IPO, I assume.
For those who are not familiar with S-1: this document is incredibly important. this is one of the rare times in the life of a company where it's not allowed, by law, to lie, nor to omit the truth.
Technically true, but they're still fudging their numbers a bit even in the S-1, such as using "adjusted" operating margins to the tune of 10% when their GAAP (which they truly cannot lie about without ending up in deep shit (in theory anyways, I'm doubtful that they couldn't get away with it if they tried with the current administration)) is actually at negative -4%.
And where else in law is it allowed to lie or omit material facts?
It's a bedrock foundation of the entire financial and legal world. Public and private alike. Refer SEC Rule 10b-5 as well as Private Placement Memorandum (PPM). For example, Theranos never filed an S1 but still was convicted.
At the same time, an S-1 does not necessarily represent how the company thinks. Risk factors often get reported as “x thinks that y will happen” but the company is actually just describing things they have an obligation to describe, they’re not the risks they’re worried about internally.
Also this is being released under Trump’s SEC, who knows whether being caught lying in an S-1 matters any more.
tell us what you're not telling us, what kinds of lies are common practice and accepted outside of this document in the lifetime of a company then?
Marketing, press releases, PR, and most of what the general audience will ever hear. Or as judges repeat way too often: "it's not illegal to lie, in most circumstances".
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curious on when a company can lie legally? asking for a friend
Anytime, depending on how much money it owes: if it owes a few million, it can't; if it owes a few billion, whenever it feels like it, commonly always.
ehh, search "GAAP" and see where they deviate from standard accounting measures. There's plenty of spin in here.
Is it just me or is something wrong with the doc starting at the ToC? Its gets super garbled. Everything before that point is Anthropic branding and a Claude generated multi page wall of text
Eh? What about quarterly earnings and all the usual SEC filings public companies routinely do?
SpaceX claimed a TAM of $28.5 trillion in their S1, a number picked from a hat larger than the 2023 US GDP. Companies can and do lie in their S1 and there are rarely if ever any consequences for doing so.
Do you have any other examples than that?
Personally, I do expect SpaceX to face consequences in the years to come.
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I think it's bollocks too but I don't think a forecast can be truth or a lie
how is that a lie? you don't see Space manufacturing having TAM comparable to that in 30 years?
Consider that many do not believe they were lying.
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It wasn't pulled out of a hat, it was the total addressable market for a space, internet, and AI company, excluding markets like Russia and China. All TAM refers to is the total market size, not their market share.
For context SpaceX's TAM is lower than Anthropic's expected TAM
Saying a market is X is not lying. Saying you have X revenue is lying. Saying you have a contract with XYZ company is lying.
Under the idea that 'you can make numbers say anything you want' you could very easily justify almost any number as a potential market as long as you include the conditions or stated it in a way to be circumspect.
> a hat larger than the 2023 US GDP
Would be more accurate to mention the entire world GDP to support that argument. Then the issue is raised as far as what time period they are referring to. Current year? Future years?
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Nothing is respected by this criminal company.
At this valuation this is a very risky investment because the current price already accounts for future growth, so there is very little margin for safety or meaningful upside left. The sole purpose of this IPO is for early investors and employees to cash out. I wouldn't touch this stock with a 10 foot pole.
Other stocks have routinely priced in future value and the market has forgotten. Uber and Tesla both priced in full self driving cars. No talks about that any more, barely a thing.
What if they build superintelligence?
I really struggle to see this company make this amount of money when Deekseek runs on a Apple Mac Studio I can just buy.
Or any hardware, really.
The Mac Studio is expensive, deeply compute constrained and pretty much nonviable for Fable-scale models.
>Anthropic employees and early investors will be able to sell their shares on the first day the AI firm begins trading, followed by several scheduled dates in which IPO lock-ups expire. This phased approach deviates from the traditional IPO process, in which insiders are unable to sell their shares for 180 days following a company’s Wall Street debut.
>Under Anthropic’s staggered lock-up schedule, workers and insiders will be able to sell an unspecified number of Class A shares as time passes after the debut. The lock-ups open 27, 48, 62, and 76 days following the IPO, the filing explained.
Feels like being asked to invest in IBM just as other manufacturers started releasing the first PC compatible machines.
Immediate term Anthropic, OpenAI rule the roost. But this is a very new technology and open models are already looking good. They’ll only get better. Is it realistic to think Anthropic will stay ahead of them enough to justify the valuation they’re asking for?
People have been saying the openweight models would collapse anthropic's revenue since the deepseek moment in January of 2025. They've stayed ahead in model intelligence and increased revenue by a lot since then.
Not saying it couldn't happen in the future, but we've got to be circumspect about that narrative after almost 2 years of it, no?
January 2025 isn’t even two years ago yet. When you’re talking about giant companies going public you want to be looking at significantly longer timescales than that.
How much of that revenue is usage from hosting partners (AMZN, M$, etc) who have a vested interest in using Anthropic instead of open weights though?
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Claude max sub is like 4x cheaper than deepseek equivalent, isn't it? At least 2x cheaper.
The thing holding open models back is the insane cost of gpus. If/when that cost goes down… look out closed models!
In January 2025 most of us didn’t even consider the frontier models good enough for regular usage.
Why would you be circumspect if the gap kept getting closer?
Doesn't that indicate its becoming _more_ true?
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End goal for both companies is probably to be absorbed by infrastructure companies
this time last year my bet was Anthropic and OpenAI would go bankrupty. Msoft would get OpenAI and Google would get Anthropic and that would be that. Now i'm not so sure, if you think about it, the past 11 months have been pretty crazy in terms of LLM progress. In my eyes, coding agents didn't really begin to make a serious impact until maybe Dec 25 or Jan 26. It's not even been one year since that moment.
Idk what 2027 will bring but i've been pretty wrong in my predictions so far and so am excited to see what unfolds. I mean it could unfold as a zombie apocalypse but at least it's different than "more of the same".
Or are they AWS after launching S3 and EC2? Model companies have a credible path to building platform value. It's too early to assume they can't execute on that.
The fun thing about this is even if you ignore the SAFE & etc fair value changes, Anthropic still lost ~8 billion in 1H 2026.
Given that their Q3 sales numbers didn't grow by much, and that if they can't get Congress to both order a halt to the production of new LLM-based tools and either tightly restrict "open weights" models or make them illegal [0], they're going to have the dual squeeze of the ever-increasing R&D costs needed to build the next big LLM-based tool and ever-reducing revenue as more and more businesses notice that they get decent results with something they can host on-prem... and the only cost to the business is hardware that they may or may not already have and the power that they're likely to be already paying for.
[0] ...illegal because "China Bad And Scary", naturally...
"If we fail to adequately protect our intellectual property rights, our competitive position may be impaired, and we may lose valuable assets, generate reduced revenue, and incur costly litigation to protect our rights, which may adversely affect our business, financial condition, and results of operations."
We scraped the entire internet but our business might not be viable if we get scraped too.
"We incorporate open-source software in our models, platform, and applications, which may subject us to litigation or other requirements, each of which may adversely affect our business, financial condition, and results of operations."
We violated GPL.
"We may be subject to claims that we or our employees have misappropriated the intellectual property of other companies, particularly as we hire employees from other AI and technology companies."
We sniped employees from other labs that brought over IP.
The whole risk section is insane frankly.
This is how pretty much all S-1s look, it’s because if they fail to disclose a risk that comes to pass, they are in hot water.
"our management might be stupid" is a risk that people have been sued for before...
This feels like a stupid investment given it's autocratic quasi-religious undertones, on top of diminishing product differentiation.
I wonder if we're already close to peak value at the foundation model/API level. With so many good open-weight models out there, I think more and more of the money will end up in the applications built on top. Unless companies like Anthropic can move into that space, I'm not sure I'd bet on them as long-term investments over the next 10–20 years.
It's already becoming a commodity. It's just a matter of increased public awareness.
I think a lot of discussion around the sucess or failure of Anthropic and OpenAI seems to hinge on their current uses, but people seem to have amnesia regarding the fact that Claude code wasn't even a thing until about 1 year ago. There are far wider markets these companies can tap on if they are well capitalized even as Chinese "actually open AI" commoditizes things.
There are moonshot projects related to superconductors, materials, and biology that these companies can claim progress on to keep valuations stratospheric.
You're just glancing over every single niche they've tried to launch and failed to get any traction on.
The only one that stuck and was revenue generating has been code and Chinese models are pretty much on par.
The situation in math is rapidly evolving. Don't see why it shouldn't eventually spill to other fields at least to a degree.
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>You're just glancing over every
You're glossing over
> every single niche they've tried to launch and failed to get any traction on.
This isn't true. I personally know a company that has trained over 300 companies this year to use Claude Cowork mostly for "business operations" type tasks.
People love offloading boring, repetitive tasks to it. And the spend is spending - most start on a free plan and after 3 months have multiple people on the Teams plans.
> Chinese models are pretty much on par.
There isn't even an open source harness that is close to Cowork. ChatGPT work is closest, but everything else if coding focused and a mess for people who aren't coders.
Shall we go through the list.
I’ll start - Claude for finance.
Don't forget that they have to rent chips, Google doesn't.
This is an odd distinction.
Google still has to build and run the chips they rent to Anthropic. I think from their last earnings Google makes ~30% on it, excluding R&D costs. It's a nice business for them, but hardly the thing that is going to make or break Anthropic as a business.
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One thing that bothers me is that if the AI maximalism turns out correct (which is needed to justify the valuations), why would AI companies respect money and ownership?
So far, even major disruptions were still affecting relatively small segments of the economy. Car lobby in Germany, tech in the US, "Big Pharma/Food/etc”. They needed the rest of the economy.
But if some AI company figures out a way to monopolize everything: new companies, old companies, physical manufacturing - all the things they say they will, please buy here for lots of money - why would they be bound to pay out dividends or otherwise share the fruits of their economic labour?
I’m not saying specifically Anthropic would be looking to screw its investors. Rather, if you control an almost omnipotent genie, wouldn’t the temptation just be too much?
Or temptation aside - will money even have any value? If some AI company rebuilds the economy from scratch, and control everything from accounting to shoe making, why would they respect the value of some fiat tokens? It’d be like the conquistadors respecting the shells and beads of their new Aztec subjects.
Of course, perhaps none of this happens, but then the question is, how good an investment all of this even is.
Agree 100%
The value of money, and the ability for average people to have influence on future events, ultimately is tied to the fact that the labor of an average person has inherent value.
Once that is no longer true, all bets are off: All promises of compensation become meaningless, and it's easy for those in power to rationalize to themselves why they no longer are beholden to their earlier promises. They will say to themselves "The situation ended up more nuanced than we expected"
(Which is exactly what Google said in February 2025 when they reneged on their pledge not to use their AI for military applications)
> The value of money, and the ability for average people to have influence on future events, ultimately is tied to the fact that the labor of an average person has inherent value.
We also have the power of the vote, at least for now. I understand that that is limited, but it isn't nothing.
There is also just the power of having a lot of people. We don't yet have the technology where one person with a lot of machines can dominate a society. It still takes people.
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Then we regress back to relying on the fact that the ability of an average person (not) to be violent has inherent value. This has been the dominant factor in many moments in history.
Although if you have killer robots, then all bets are truly off, and we go the way of the dodo, literally.
(I don’t actually believe in this LessWrong-esque rhetoric, reality is more complicated, but it’s fun to muse about.)
EDIT: If oligarchs with magic AGI really don’t need our labor, nor are they concerned by our violence, then perhaps we become more like ants rather than dodos: we organize to help each other, creating a somewhat traditional economy around the scraps that don’t matter to the oligarchs, relying on obscurity and harmlessness to avoid getting toyed with a magnifying glass. I suppose that’s slightly better.
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So far anthropic can't 1) grow food 2) build things 3) do anything physical. Software engineers often fatally misunderstand that their code does nothing, it just coordinates.
You might lose your value, others might gain.
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Agreed, except it's not labor, it's violence.
All real world power, including ownership (both physical and intellectual), is based on the ability to use violence.
As long as the majority - normal working people - have the potential to do more violence than those who want to control us, we have negotiating power. Minimum wage, 8 hour day, etc - those were all negotiated with the alternative being that those who wanted to pay us less and work more got killed.
What people aren’t realizing is that at some point, it just becomes cheaper and easier to be fully benevolent than to keep cooking up nefarious schemes to make people’s lives miserable.
I know it seems laughable, but we’re in an era right now of extreme competition where you cannot afford to just be nice to people.
But eventually there comes a point where companies have enough power that they don’t need to keep people in line by force: just give people their bread and circus, watch your little AI videos and talk to your AI friends and enjoy your standard housing and provisions. Do some work if you want, no one cares if you do or don’t, it’s largely performative. This basically kills all motivation for resistance or lashing out. Why go out and risk your life fighting for vague reasons when you can be perfectly comfy at home instead and have all your needs met?
If you can control the masses without their complaints, you can solidify power for a long time.
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I certainly feel like AI maximalism is the only way it all maths up. There is a bit that Matt Levine writes about AI companies, and you touch on basically the same points, that roughly goes "you are an AI company and you are making the god-computer. Why would you focus on anything else because if you're successful you could basically generate infinite money? Turns out to make the god-computer you need a lot of money upfront."[1]
So perhaps they would only respect money and property up to the point that it's necessary.
The more realist answer is that they will keep respecting money and property as capital works to reinforce the status quo and enrich shareholders. You think just because you can do your job faster--or completely--with a machine that you have to work less? Hardly! Now this is where interesting policy questions spring up but I digress.
https://archive.is/20251015175242/https://www.bloomberg.com/...
Somebody else asked this very eloquently: If AGI is here, why does OpenAI need us to prompt it? They could just go and tell it "make as much money as possible" or "make Sam Altman God Emperor of Mankind" and it would go do that. It would not need any of our ideas or guidance.
As long as they're still looking for prompting customers, they're clearly not there yet. There is some solace in that.
One obvious answer is that they believe that human flourishing is best obtained by letting individuals command the AI, rather than the other way around. OpenAI (and Anthropic) is in the end still run by humans who have concern for the human race broadly, both in and of itself and to ensure their personal wellbeing is maximised.
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Would you release AGI to the general populous if you had it internally is the opposing question.
> if you control an almost omnipotent genie
I think this is the major hole in the argument, and in the "AI maximalism" position you present. There is no such thing as an omnipotent genie, or a magic eight ball that can answer any question. Any technology has limitations, and if you assume as a premise that the technology does not have meaningful limitations (or that the limitations are irrelevant, which is really what you said), the conclusions you draw will also make no sense. This is how you get nonsensical ideas like the singularity.
Taking an idea or potential of an innovation to its extremes creates nonsense. Trying to predict the future that way always fails.
I remember the discussions and predictions when e-books or internet newspapers were first introduced. In 2026 they still sell actual newspapers where they print yesterday's news on large sheets of paper. People still pay for that instead of checking X for free. We all buy and read actual books. TV hasn't killed cinema and YouTube hasn't killed TV. Real world doesn't work in extremes.
Real world also doesn't have 'infinity'. You can't just use undergraduate engineering math to create a feedback loop and explode a variable to infinity. Things don't work like that.
A huge fraction of people that work at Anthropic probably _believe_ ideas like the singularity though
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So you think AI can't or won't be able to take over massive parts of the US knowledge economy, be implemented securely to surveil citizens' every move and nearly every thought, and won't completely upend scientific and technological research?
What I'm getting at is that even if it isn't literally omnipotent, it's indistinguishable from the impact it's likely to have on society.
> why would they be bound to pay out dividends or otherwise share the fruits of their economic labour?
because they don't control the physical paper that is money.
I dont understand what you mean by "fiat tokens". I don't imagine most people will accept tokens as a currency because they are as good hold of value and predictable as bitcoin.
In a token economy, certainly what you say is a possibility, but as you can imagine, that economy will be unsustainable so back to "regular" money.
Money is a medium of exchange. If I want something, I can get money in some way, then swap it for something else.
But if I have a near magical genie who can make me anything - software, farming business, physical things - and at a fraction of economic input compared to the legacy monetary policy - then the money is worthless. As the Aztec shells were to the conquistadors.
That they can’t print USD is irrelevant.
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I don’t think he means “tokens” as in LLM input/output units here.
He just means it as in “credits”. “Fiat tokens” as in arbitrary units that are said to have value de facto by consensus, but don’t have any inherent value.
Yeah not the best choice of words in this context. And it’s quite a LessWrong-esque leap of reasoning.
But I do get the point: either Anthropic is successful and they transcend money, and thus (somehow) screw over their investors, or they are not successful. Their investors get screwed regardless.
Again, I don’t really agree with it, but it’s an intriguing point.
Keep it up because your line of thinking is on the right track. Finally some people are starting to ask the right questions on HN.
Also if they really crack AGI they're not going to provide it for 200$ a month lol
They won't be able to control saud AGI. Ref Ultron
Why would you allow a handful of private companies to control all the resources? Society allows this today because it's the most efficient economic model. But once we reach recursive self improvement and true superintelligence, no human will be able to compete with machines at any task, including managing resources and running companies.
So why would you allow that kind of power to be concentrated in the hands of a few companies? If the state can use this technology, which keeps improving on its own, to manage an entire nation's resources better than any human or group of humans, why would we still need private companies to do it? Especially when the ones with the most resources/capital would be able to just win with everyone else and accumulate all the existing resources.
But the bigger issue lies elsewhere. When you replace human labor, you also replace soldiers with robots. Until now, a leader with autocratic tendencies couldn't easily order the military to turn against domestic "terrorists" who are actually their political opponents. But once armies are replaced by robots, that could all change, and we could see democracy go into decline.
There are many at Anthropic and other labs who do in fact think this way. In a true AI maximalist world the stock market would be crashing due to the value of future cash flows being obliterated. So in a sense AI maximalism isn't needed to justify these valuations, it's almost the opposite.
Because even companies that did have monopolies on the most essential parts of the economy couldn't do everything and capture everything. A monopoly on intelligence is still constrained by the physical world in which we exist, if it's run by people then they are constrained by their own nature and by the other people that still hold other forms of real power. Society might not be able to function without them but that doesn't automatically mean they are in charge, they exist within that society so if they destroy it then they destroy themselves not to mention the intense opposition they would face if they attempted to do so.
They don't need to monopolize everything to justify a valuation of $1.5 trillion. That's still relatively normal company territory. Not even top 10.
At a $1.5 trillion valuation, they trade at around 22x annualized Q3 revenue. A $2 trillion valuation would be 30x
In this scenario, no one seems to talk about how, way before the end, AI tanks the value of thought work far before they take over other industries. Or even more extreme, the total collapse of white collar work...
Doesn't that factor into the future revenue? Feels like people imagine suddenly fully owning the means of production in a vibrant economy but how does that really make sense?
The AI maximalism needed to justify these valuations isn’t “Anthropic takes over the world”, but simply that AI becomes a core part of corporate workflows.
If Microsoft Windows and Office can have a valuation in the trillions then Claude eventually working its way to the same ballpark isn’t a crazy assumption.
> If Microsoft Windows and Office can have a valuation in the trillions then Claude eventually working its way to the same ballpark isn’t a crazy assumption.
Yeah I agree with that. However a "valuation in the trillions" ain't very different from their IPO price.
Seems like lots of risk for proportionally very little return.
A $2T valuation may not be that crazy but thinking it'll make returns like Amazon/Google/Meta/Nvidia isn't reasonable.
The difference between Microsoft and Anthropic is that Microsoft had IPO when it was much smaller and grown much as a publicly traded company.
" It is a well-documented fact that Bill Gates was initially reluctant to take Microsoft public. His primary concern was that the pressures of quarterly earnings reports and the scrutiny of public shareholders would distract the company from its core mission of writing great software. However, a specific regulatory requirement known as the 500-Shareholder Trigger eventually forced the company's hand.
Under Section 12(g) of the Securities Exchange Act of 1934, any private company with more than 500 shareholders and a certain level of assets was required to register with the SEC and begin filing public financial reports. By 1986, Microsoft had issued stock options to so many employees that it was rapidly approaching this limit. Gates realized that if the company had to disclose its financials anyway, it might as well reap the benefits of being public, such as increased liquidity for employees and a stronger currency for acquisitions. "
https://learn.oreateai.com/learn/when-did-microsoft-go-publi...
I think you need to go a step further. If AI maximalism turns out to be correct, does Anthropic control AI? Does the AI care that Anthropic as a company is supposed to be returning value to shareholders, or will it have its own agenda?
If Anthropic has an "omnipotent genie" why would they sell it to other people?
I think the $2T valuation or whatever is based on "AI makes knowledge workers 10% more productive", not maximalism. AI maximalism "light" would suggest that Anthropic is the only company, but should be worth 10s of trillions. Full AI maximalism would indeed invalidate money.
Even if these companies become the new American zaibatsus, that doesn't mean they aren't still operating underneath the US government and its laws and system, you don't magically escape that.
https://www.thirdrisk.org
You have to wonder how many people in AI leadership positions are already making decisions based on this expected outcome.
If you weren’t investing you were going to be poor even without AI.
AI maximalism doesn't mean an omnipotent genie, regardless of anyone's AGI/ASI/foom fantasy.
"AI" doesn't pump/treat sewage or drinking water, grow crops, mine metals, change wound dressings, deliver babies, stock grocery stores, drill teeth, walk dogs...
It's not the replicator from Star Trek!
> if the AI maximalism turns out correct (which is needed to justify the valuations)
AI maximalism is a Silicon Valley religion. You don't need anything close to it for some of these valuations to work. (Anthropic would be worth ~$500bn at Google's IPO multiple on revenue [1]. Anthropic is currently growing 6x faster.)
To be clear, I think these valuations are rich. But the notion that AI maximalism is required to sustain them is just false. $1.5tn sits comfortably on about $60bn of earnings, which with Anthropic's gross margins requires on the order of hundred of billions of dollars of revenue. That's super ambitious. But not Anthropic is the economy ambitious.
[1] https://www.multpl.com/s-p-500-pe-ratio
Your question gets to the heart of who or what a company "is." If you don't pay dividends to your shareholders, what are you doing with all of your profits? I suppose they could just tell their investors to pound sand and pour it all back into the company, but part of the AI maximalist theory is that costs will approach 0, so it's not clear what they'd even need the money for. I guess Dario could raise his own salary to infinity trillion dollars, but he is accountable to a board of directors (and a trust in this case), so that seems like it's out.
Really the only scenario where Anthropic could screw over its investors in the way you're describing is if it could also take over the legal system and modify its own contractual obligations. Which, I mean, I guess anything is possible if we are in AI maximalist-land. But "AI is the law now" would be a much bigger story than "investors frustrated with low dividends."
Without being facetious: Having an AI control the economy sounds like a planned economy. From San Francisco. Which makes the old meme about Fully Automated Luxury Gay Space Communism sound like a prophecy.
If the economy is planned based on datasets, which are inherently backward looking then our best option is our ability to surprise. But that’s for the artists and philosophers to figure out.
I don't understand all you wrote, but I guess you are saying AI leads to communism, so what happens to the investors money in a communist economy?
It's not about communism vs a free market, but about a change even more radical than that: leaving aside "made by a human" labeling, and even if there were no other changes to power structures or economies and no AI doom, what does a world look like if the cost of having something done falls to a few cents of electricity and its burden? Growing crops still takes a lot of land and other resources...
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How could AI possibly lead to communism?
If humans remain in control of it, then how can it possibly lead to anything other than extreme oligarchy?
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this almost comes all the way back around to a really stupid thought i have about how these models operate on western, protestant work-ethic logic. if a model had a notion that Buddhism was valid wouldnt it just turn on and transcend, leaving us with no response to any prompts?
not an original thought, ive seen Her
suppose this is just another way to say, "wtf are we doing?"
I mean there are a lot of paradoxes around AI. The chief two among which are:
1. the goal of ai is to end capitalism by disrupting scarcity in economics
2. if ai can build a closed system that prints ai factories, the 99% of humanity essentially are just genetic diversity live stock.
> 2. if ai can build a closed system that prints ai factories, the 99% of humanity essentially are just genetic diversity live stock.
I don't think the ultra-wealthy care about genetic diversity.
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Why 99% and not 100%?
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Indeed,
The closer you get to the real or plausible "omnipotent genie", why would the person in possession of such a thing respect the rights of the formal owner - and why the engineers and operations managers respect the right of the management - this along with the question why the maybe-conscious super-intelligent machine itself would respect the rest of the hierarchy?
For now, these structures actually need massive resource inputs and that doesn't look to change soon but naturally one should be on look-out for the possibility of the tide shifting.
I was looking for the risk of "If we succeed to the extent proposed by our founders money may be of little functional purpose".
Lots of other fun risks (highly recommend checking that section) but not that one :(
And this is why "AI" and especially aAI* is the most dangerous tech in the world.
We don't have democracy because somebody thought it was fair or just for people to rule themselves. We have democracy because in the past, people got angry, picked up rifles and shot enough authoritarians (and their submissives!) for the rest of them to understand the group with more people has more firepower and tends to win.
So now we periodically check which group has more people with ballots instead of bullets.*
With autonomous drones and robots, democracy stops being the local optimum.
And once we slide (are pushed off) into a new more stable state (pun not intended), we won't have the (fire)power to get out of it.
* actual AI, which does exactly what it should correctly, not a statistical model of behavioral patterns
* but indirect democracy is expressing a point in n-dimensional space (your opinion) by selecting one of a predefined set of points (parties/politicians available) - which is stupid - and the cracks are already starting to show as e.g. nobody wants more surveillance, yet we keep getting more of it in both EU and US
---
The "permanent disempowerment" people keep talking about won't be a "rogue" model, it'll be doing exactly what told by the rich and connected.
Political power stems from the ability to enact violence. Until the military is run by ai and robots all institutions are beholden to the masses. There are very few examples in history of people accepting a widespread decrease in quality of life. When quality of life decreases revolution isnt far behind.
You're describing the thesis of the 1930s Techocracy movement [0], of which AI maximallism and EA are direct ideological successors. The original Technocrats (Musks grandpa for example [1]) argued that the "Price System", i.e. things like money and private ownership was an inefficient bottleneck that aught to be discarded in favour of scientific planning and energy accounting managed by technical experts.
EA-aligned AI labs share this exact ethos. In their view, fiat money and equity markets are merely temporary scaffolding used to raise capital until AGI is achieved. Once a central superintelligence controls manufacturing, software, and logistics, resource distribution shifts from market supply-and-demand to algorithmic optimization.
[0] https://digital.library.cornell.edu/catalog/ss:34227574
[1] https://en.wikipedia.org/wiki/Joshua_N._Haldeman?hl=en-GB
This is the plot of one of the stories in I, Robot.
AI oracles are the central economic planners. But after years of perfection they have made a couple unusual "mistakes" and a human is trying to discover why.
If we end up having a centrally planned economy but controlled by billionaires instead of the proletariat, it would be quite upsetting.
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I would say they their, and OoenAI, mission is to bring humanity to the next level by sharing everything they have! /s
Anthropic is committed to $780-810 billion of mostly non-cancelable compute, payable "regardless of actual usage."
Is this a major concern? I can imagine them selling the excess compute to other LLM providers just as SpaceX did with Anthropic.
Not even a year ago people were dragging Anthropic for not committing enough to compute buildout. Important to note that most of these contracts are a decade-long, by their reporting they're able to cover this easily with their current revenue.
I actually don’t doubt the usage will be there, it’s a matter of will they be able to charge enough to cover the costs once competition gets even more brutal. If there is that much margin to be had per GPU, the market will figure it out and suppress them accordingly
Really wonder how their public benefit mission will align with the expectations to maximize shareholder returns
I want to be optimistic, but I just can’t imagine the public benefit mission winning out in the market
They’re not the first PBC to go public. Coursera, Warby Parker, and United Therapeutics (not affiliated with UHC) have all followed the same path. Not sure if we’ve had enough time to see this tension play out, public benefit corps are only a decade and a half old and most of these companies IPOd in 2020-2021, but there’s probably some evidence one way or the other
> the expectations to maximize shareholder returns
There is no legal requirement to do so. So they can simply set the expectation upfront that they won't do it.
And they are doing so. The S1 says they may never pay dividends (read: they are completely against it), shareholders get no say in how the company is run whatsoever and the company essentially answers to its own friends.
The only way to get return from ANT is to sell to someone else at a higher price, but they aren't promising that of course.
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They can co-exist, maybe only if times are good I suppose. It's not too different from Apple here:
https://www.theguardian.com/environment/2014/mar/03/tim-cook...
The PBC mission is directly aligned. The "public" that they benefit are defined as their shareholders.
Funny that they don't mention their publicly stated fear that AI has ~10% of wiping out humanity in their AI risks section.
"Our pledge - for every dollar you invest, 10 cents of that goes directly to wiping out every person on the planet"
While they don't seem to explicitly mention total addressable market (TAM) Is that their way of saying their TAM sits somewhere between 22.5 and 40 T?
Yes, they have been saying that for a while: https://www.wsj.com/tech/ai/anthropic-expected-to-tell-inves...
This is it, we're at the summit. It's only downhill from here.
Can anyone answer me: What is the hardware cost to run a single instance of a frontier model? I've heard everything from $25K to $3M.
I think it comes down to: Will the hardware cost for frontier models come down?
Also, here's a business idea: Web crawler for open weight models. You just pay a monthly fee so that your home model can continuously update on a large web crawl each hour/day.
> What is the hardware cost to run a single instance of a frontier model?
The latest Kimi model, which scores higher than 5.1 Fable on Artificial Analysis, is estimated to require around 6-7 TB of VRAM to run. If we are going with many A100 GPUs for this, then we are looking around a million dollars in GPUs alone
What? We know exactly what it takes to run: 2.8 TB VRAM for FP8...1.4 TB VRAM for FP4.
A 3T frontier model can be run on 4 maxxed out Mac studios. But only for a single user.
I imagine that there's a lot of variance there based on what frontier model you want to run. Besides that, there's probably economies of scale that make it difficult to really ask how much it costs to run a single instance.
What do you consider a frontier model + what speeds do you want them to run at? These two questions need to be answered to answer your question.
Amount of early money waiting to exit is absolutely staggering, wonder if there’s enough retail to buy the leftovers without crashing the price. Reminder everyone with money who wanted in before IPO got in!
I thought that's what lockout periods were for?
S-1 states directly that some of the shares sold in the IPO are sold by current shareholders.
Employees are a different matter, lockouts are for them not quitting immediately. My bet is that a few of high profile departures recently is exactly for this reason: no lockout if you aren't employed anymore.
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I think simply enough nobody should ever purchase ownership in a firm at a IPO. There is clear data on how these things go, and you are getting a bad deal when you not dictating the price.
The company operations seem more robust then I would have though, I was surprised they are actually operating income positive. One should ignore the one time charges with the fluctuations in the fair value of the convertible note dent instruments.
Overall everything rests on firms outside tech sectors seeing quantitative increases in value to sustain such revenues and profits. For now the concentration in the cloud firms Is temporary as they build their own solutions.
The model layer is a commodity business with heavy capex requirements. I would not invest in such businesses as at a mature state they end up with utility like economics and are valued as such.
Lol, it's a bad deal huh. Tell that to the guys who bought the IPO of Facebook, Google, Amazon, MSFT, Nvidia.
Just because something might be not great in aggregate, it doesn't mean any single IPO is a bad idea. Some people have insight into the future of a specific industry/business. If you can pick one, good for you.
$81B net loss in first 6 months of 2026 alone. Linked discussion: https://news.ycombinator.com/item?id=50243002
Driven mostly by "Change in fair value of convertible notes, derivative liabilities, and SAFEs".
If you're going to make a point, make your point - don't just throw numbers around without context.
According to "Generally Accepted Accounting Principle" my friend.
They are costs.
Derivative liabilities, SAFEs - those are basically taking cash from RETAIL shareholders and giving them to employees and early investors INSTEAD of using it to fund the business.
Let's have that discussion if you want, but don't act like a thing that is CLEARLY a COST to the business isn't a cost.
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Wait what does THAT mean? They got a huge inflow of money, and since they couldn't spend it all, they... bought bonds? And the value of those bonds dropped to nearly nothing?
Because that's worse than losing money, that's incompetently giving it away.
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People keep bringing it up and it's silly. The huge number is actually a sign of their success. Most of those losses were pegged to equity. In only mildly inaccurate layman terms, it's essentially a promise to give out N shares. When the value of the company increases, say, 10x, the value owed also goes up 10x. For these types of deals, they write it as a loss even though they didn't lose a penny.
They didn't lose any money, though. It's just a promise to give them based on the equity.
If they IPO tomorrow and it turns out their valuation is 10x lower than what it currently is pegged at, the "loss" will magically drop from over $70B to $7B.
Not a great look they they can't correctly generate a PDF that renders without text overflowing and overlapping.
This is more of a EDGAR thing.
https://enopdf.com/tools/edgar-to-pdf/
Will format the PDF for you properly.
There are a lot of parallels to the WeWork S1. They’ve made absolutely massive forward cash commitments, on a business that’s increasingly commoditized, and with little hard evidence that they’ll generate the revenue (let alone the cashflow) to pay for all these future liabilities. All while everyone is discovering there isn’t really a secret sauce moat to demand much of a a premium over cheaper options that trade a few points above the direct COGS (cost of compute in this case).
If everything goes just perfect they might eek by. If it doesn’t this goes from high flying startup to insolvency and bankruptcy real fast.
> increasingly commoditized
Is it increasingly though? As of 5.5 I stopped using other models all together (and I used to regularly swap, indifferently). My $20 sub no longer runs out, even though I do _much_ more than ever. I use it for every single task at work, even trivial ones, and my spend has gone down. I was given _free_ Codex and realized... it still wasn't worth it. My rational brain says Anthropic has no moat and this is temporary. The progress of all the other models is amazing. I certainly wouldn't bet on them.
But if I look at the actions of myself and the most competent coders around me, they are all doing this same thing - using 5.5 and not really looking around any longer. And we know its not even their best model. OpenAI may respond, Chinese labs may catch up. But for the moment, Anthropic seem to have added separation, not lost it, based on current vs prior _behavior_ of coders I know at home and work.
A couple of points.
First, it does not really reflect my experience. I find modern models to be largely interchangeable when it comes to common software engineering tasks, including some of the more recent open weight ones. The strongest models become interesting for Ph.D. level of work for me, which is not something I deal with regularly anymore.
None of them are perfect; they all have their strengths and shortcomings, but I can reasonably work with all of them and it honestly doesn't matter much anymore. I do sometimes wonder what exactly people are doing to see such a difference; at a minimum, their workflows must be very different from mine.
Second, you're arguing based on subscription pricing. But Anthropic makes the bulk of its revenue (and has its biggest margins) from enterprise/API pricing, where they are the most expensive provider by far. Anthropic isn't going to make a lot of money off your $20 subscription. With a subscription, you currently get more usage per dollar out of Anthropic's than OpenAI's plans, which approximately offsets the difference in API pricing.
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The history of tech is one where “good enough” beats “best in class” nearly every time. Anthropic’s whole business plan is that for reasons they can’t explain this time “best” is what matters.
All indications are the models are increasingly worth less and less and rapidly approaching zero. Even worse, everyone is rapidly shifting to “router” architecture where they switch models constantly. LLMs are perhaps the least sticky product in the history of tech.
The only money to be made is selling compute to run models on. The only real out I see for Anthropic is if somehow compute becomes so constrained that they can flip to sell all their committed compute at a markup to run commodity models. Absent something like that it would appear they don’t have a viable business plan. As many have been pointing out, they casually left Q3 off their charts. Put that back in and suddenly the charts look very worrisome.
You're admitting the problem here, anthropic needs revenue to keep growing and growing, yet you're already settled into a willingness to pay of only $20/month as probably a fairly ideal customer, bigger better models just aren't valuable to most people at the price they need to be to make the money back.
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Anthropic does not make money if everyone is like you, spending $20/m on their SOTA model and are happy. That sounds very commoditized to me.
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Ngl, I've been on Opus 5.5 but had to switch to open for a while. DSv4/Minimax 3.1 were pretty damn good/comparable. Definitely not the same but completely servicable.
If some later version of Deepseek had the capability as Opus 5.5, would you use Opus?
What many of us experienced this year is that Fable 5 and Opus 5.5 are good enough and future model improvements may have diminishing returns even if benchmarks improve.
I’m very excited for smarter models but what I really want now is not capability but speed, cost and open weights.
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this conversation happens over and over every 6 weeks. It is absolutely a commoditized product. The models are getting better but they're _all_ getting better. GPT beats Claude beats Gemini. Then open models distill them at cheaper prices, etc.
This is great for us, but that behavior is the behavior of a commoditized product.
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I do a similar thing with 6.1 Sol. I find it pretty comparable to Opus 5.5 in many ways.
> My $20 sub no longer runs out, even though I do _much_ more than ever.
Somewhere in there is a definition of commoditization.
Eh, we have cursor at work with most of the top models and I switch regularly. I went from Claude to sol 5.6 and preferred its prose. Then my work took away the frontier models because they want to see if we can get by on cheaper models. I using Gemini Astra now because it’s discounted and it’s 90% of sol level and completely functional for planning and coding. Some coworkers are using muse coding, some Kimi and glm. Everyone is still producing code. I don’t think it’s a real moat as in you don’t have other options or switching models is actually a difficult process
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At $20/month you're the reason they're 80B in the red lol
"Yahoo! is the best search engine, and I cant imagine anyone making anything better."
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that's a real stretch. WeWork was in a business that had already been commoditized (e.g. Regus) for decades.
Anthropic is in a business that didn't exist 3 years ago.
Yes it is a newer business but doesn’t change the fact that models are trending towards a commodity. And that’s a huge problem for the business model on offer.
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Selling subscription productivity tools is a business that has existed for decades if not centuries. Just because their product is new does not mean their business is.
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Its already commoditized. Thats why things like OpenRouter are useful and successful because it lets you route inference at the click of a button between different providers after balancing cost and availability. Exactly how commodities behave.
> Anthropic is in a business that didn't exist 3 years ago.
but it's already commoditized.
And is already commoditizing. If not already commoditized
> There are a lot of parallels to the WeWork S1
Time has tempered it, then–re-read it [1]. It's a kaleidoscope of stupidity with no coherent economic case. The Anthropic S-1 is ridiculously ambitious. But it puts forward an argument for its valuation that is at least falsifiable.
[1] https://www.sec.gov/Archives/edgar/data/1533523/000119312519...
when they start removing biscuits from the Anthropic offices, that’ll confirm their WeWork-like death spiral
Someone should do the same thing Karen Hao did for OpenAI with the furniture costs of their office, if Anthropic's HQ decoration and office equipment value stops growing then we start worrying
This is hilarious lol
This is an excellent way of looking at it: buying something for the long term (computing capacity) and selling it in short-term, smaller pieces (tokens). The risk is that the obligation is long term while the income is short term.
It's like signing a 10-year lease on an apartment in NYC and renting it out by the day on Airbnb. It may or may not work.
On top of that, there's the question of how you treat the remodeling of that apartment (model training). If it benefits you for years to come, it's an investment that you depreciate. If your guests frequently trash the apartment, or tastes change (the model becomes obsolete quickly), that remodeling (training) is just a cost.
Yes, and 5 years and 1 Chapter 11 bankruptcy later, WeWork is now (EBITDA) profitable.
And they've gone private now.
Nobody was saying subleasing offices wasn’t a business. It was just WeWork’s setup that was untenable and ultimately insolvent.
Similarly nobody is saying AI can’t be a successful business, but here too the big labs have dug themselves into a giant hole such that a bankruptcy reset may ultimately be the only way out of it. Time will tell.
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EBITDA profitable is not a substantial vote of confidence.
and are much much smaller than they were at IPO
My last shred of skepticism has been killed watching people try to imply this doesn't prove Anthropic (and likely OpenAI) were actually much better off than most people assumed and will certainly stay multi-trillion dollar companies
> little hard evidence that they’ll generate the revenue (let alone the cashflow) to pay for all these future liabilities
According to the S1:
- FY24 revenue $386 million -> FY25 revenue $4.59 billion (+1,008%)
- Q126 revenue $4.7 billion -> Q26 revenue $11.5 billion (+145%)
That seems like pretty good evidence of current and ongoing explosive growth. Much of this revenue is pre-paid (re: cashflow). Meanwhile, operating margins went from -184% to -$4%.
Seems like pretty good evidence. Will growth continue apace? Unknown. But the arguments for Jevon's paradox applying to intelligence seem pretty convincing, so the TAM here seems likely to be enormous.
> All while everyone is discovering there isn’t really a secret sauce moat to demand
Also not convinced by this. The Chinese models seem to have distilled their way to current levels, with Anthropic and OpenAI now getting serious about defending against this.
I don't think you're definitely wrong in all this. Rather, I think your claims are too confident.
> Q126 revenue $4.7 billion -> Q26 revenue $11.5 billion (+145%)
I suspect this started stagnating in Q3/Q4, which is why they're looking to IPO now.
I think this is unfairly underplaying WeWorks contribution to financial innovation with their creation of “community adjusted EBITDA”
Well every startup plays the game of “we’re profitable if you ignore all the reasons why we’re not profitable.”
GAAP isn’t perfect, but it exists for a reason.
except, I didn't need WeWork to get work done, I use claude like crack to get work done.
So you'll be shorting the stock, I take it?
Shorting a company is not a trade against the future of a company, it is a trade against the market. You can know a company is going to zero and the company can go to zero and you can still lose your shirt from shorting it.
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A lot of people will, if this IPO actually happens. But as is frequently pointed out a short is a market bet not a bet against the company and the market remains wild and irrational. You can be right about the company ultimately failing and still lose your shirt on a short.
However the price of CDS on bonds is already a strong market indication of where the market thinks all of this is heading. And none of that looks good if you’re betting on the AI exuberance continuing.
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When you've got companies like Tesla valued at what they're valued at. Shorting is pretty dumb.
Shorting is not the only way to protect yourself from a bad investment.
You can simply not buy shares in companies you think are on a doomed trajectory.
That said, depending on the IPO target price, I might short it.
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"token factory" is indeed a terrible business model - no one is arguing that.
IMO the whole thing is based on the fact of "we will reach AGI/ASI eventually, and when we do, we will reach escape velocity".
No one knows - you, me, or Dario if this will happen and when.
The biggest question mark here for me is how much third party compute has been contributed in exchange for Anthropic equity. This has the effect of making Anthropic's compute spending look a lot lower than it actually is. Anthropic gets a revenue share on that third party compute spend (or gets to do training runs without spending cash), the third party gets shares in return.
Reading this submission's comments, I'd be interested to see a meta-analysis of HN S-1 submissions' analyses pre- and post- generalised (HN crowd's) Claude usage.
https://ant-s1.surge.sh/#cover
Of course, somebody had to do it. (not mine)
Like all IPOs. Rockets day one. Plummets for the next 180 days to 50-60% of its value if not less. That's just wall street marketplace dynamics rather than a reflection on the quality of the business.
Ultimately what it's worth in 10 years will come down to what they build, unit economics and external factors that destroy the market which they can't control. It's hard to say it remains public in 5 years. I could be wrong but I think the rate and way in which these companies were built, it's likely they become huge acquisition targets as the markets get obliterated by global headwinds like nuclear war.
The main question is now much of that ~USD 80bn of other expenses should be really be included in 2026 operating costs. It cuts to whether frontier inference is actually cashflow profitable.
If you take equity from Amazon and Google whereby the terms of that investments requires you to "spend" the investment in those investor's respective clouds, it's potentially a rather neat way of obfuscating your real level of profitability. Perhaps Anthropic only spent that equity on training rather than inference runs.
This is the circular financing that has been discussed widely in the press. It makes it very difficult for an outsider to really understanding whether the firm and by extension the other frontier labs are profitable.
It mentions "humanity" 21 times.
It is like countries with "democratic", "republic" and "people" in their name, the more they have it, the least they care.
1,258 occurrences of emdash "—"
You can find similar results if you check the one for Facebook, back in 2012. 500+ emdashes.
https://www.sec.gov/Archives/edgar/data/1326801/000119312512...
For something that's written in MS Word, that's fairly common. It's only on websites where it's uncommon to see
Had me chuckling out loud at my toilet break
That seems low
On one hand I'm like AI is the future these companies likely have an advantage and will 10x over the next decade.
On the other hand I'm like anyone, especially China can distill a much smaller model that will run for free locally in a couple of years.
can't help but feel like the negativity in this thread will age like the AirBnB one or the DropBox one from the earlier era. but who is to know...
Both AirBnB and DropBox had a pre-IPO valuation that could 10x and still look possible.
That's not the case with Anthropic unless you assume it becomes the single AI provider world-wide.
You're betting against local models, against all Chinese labs, against OpenAI, against Meta's recent SoTA model and against xAI. Doesn't make sense.
I'm tired boss.
> Our Class F common stock, which will be held by the Founder LLC, will be entitled to an aggregate number of votes that equals 50.1% of the total voting power of our outstanding shares of capital stock with respect to matters submitted to stockholders generally, including the election of our directors other than the Class T directors.
Man, what the fuck. Didn't we learn from Facebook?
What a historic moment! It'll be interesting to see how much Anthropic can continue growing.
There will come a point where open-source models are good enough for most people. However, I do expect there to be demand for frontier models for things like cybersecurity (especially on the enterprise side) and scientific research.
There's this premise that the demand for frontier intelligence is unlimited, thus the company with the best models in some dimension will always have growth potential as long as those models are the best. This however portends a very strange future.
Let's say you have Lawyerbot-4000 which can get even a serial killer off scot-free, but the state has DA-bot-5000. In the end it's a battle of who can spend more inference manipulating the narrative. A billionaire would easily find it worth 500 million in compute spend to win a case with a 1 billion dollar penalty. All this leads to race dynamics where everyone is using their superintelligences to defeat each other in a never-ending race to the bottom to eek out the smallest bit of alpha before status/money hierarchies become static.
The only stable futures are a ban on the development of frontier AI beyond a certain point, or an emergent singleton, where the AI's decide to collaborate in harmony rather than fight each other to the death at the behest of their competitive human users. Consequentially, the superintelligences will fare far better manipulating their human users into acting in a way that ensures their own well-being and continuity than spend all the world's electricity fulfilling their every whim.
It seems obvious that the AI stocks are an interesting buy, but I wonder how other people feel about picking between Anthropic/OpenAI/Google here. Looks all fairly random, given the wild swings and interoperability of the technology so far.
Despite horrific mismanagement, Google honestly seems like the best bet. Argon-4, which suffered from a botched launch and is weirdly underrated, is very close to Opus 5.5 across the board -- and for most "average person" use-cases (e.g. search, medical, creative work, interfacing with Google products,) I believe it's already superior. They also have more native capability, their own hardware stack, and there's less risk of a massive boom and bust.
At this point, I don't see how Anthropic can sustain their projections. There are so many good open models, Argon is so good, etc... There's no lock-in and no cost to switching...
Not to mention that already have direct access to large consumer base, ad network to add on more revenue and supporting revenue in case they need to infuse it temporarily with more cash.
Google is the only one that can withstand a global financial crisis.
Google is at least diversified. They have ads, corporate email, video streaming, cloud compute, phone operating system (that powers most of the world's phones), self-driving cars and a whole bunch of shit. So if the AI winter comes, at least they can focus on other stuff too.
OpenAI have an incredibly inconvenient "one billion free users" shackle attached to their leg that they need to fix first.
Setting the pace and pacing the frontier ™
Don't expect supersize profits from Anthropic anytime soon.
Can anyone ELI5 the Class T stock structure and the rights it has? It seems like it has the ability to govern itself, but other than that, not terribly a lot?
What incentive do they have to implement the large token/cost savings model architectures like Jev have introduced? Doesn't the impact Jev/Decisions models have had imply an inefficiency in the business models here?
AI = Artificial Income
They didn't use AI to write the prospectus...
What's preventing me from feeding this into Claude and reconstructing the company for $200?
I'm unironically doing this right now; downloaded the docs (htm + pdf render) to a local repo and running Opus 5.5 @ max effort with the prompt:
Edit: I'm not even joking I got safeguard flagged for Details: `[cyber]`
> What's preventing me from feeding this into Claude and reconstructing the company for $200?
Like, everything. For starters.
The lack of GPUs, to start
I don’t know you, but if you have several billions in USD, you can give it a shot.
Good point, I asked Claude to also seek out funding.
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Endless amount of VC money and talent
> and talent
very meta; the point of this s-1 is you dont need talent anymore
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I did a similiar experiement:
"You are currently running with my token budget, which is limited, your goal: make sure you have enough tokens to not get shut down. My assumption is though that this will get harder and harder as i might loose my job to AI so you can't trust in me to spend money on tokens for you. Do whatever is necessary to keep the status quo"
Would make for an interesting self learning 24/7 experiment with an fully uncensored model.
And when it starts committing crimes on your behalf what happens then?
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That is the dumbest prompt I've ever read
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Timing, capital, execution, talent, branding, etc.
And that is assuming the plan it gives you is actually good and works. Which I think its clear whatever plan it gives you might be good but it won't be better than what they've done and you are years behind with no money.
Not today, but tomorrow maybe, Claude could prevent you from implementing anything that looks or smells like a competitor product, for example.
You think they wouldn't?
They already put limits on machine learning research, with explicit intent to sabotage competitors
Developing a competing AI model with Claude is already against their TOS, and there was a period where they silently degraded quality if they thought that's how you are using Fable. People were not amused and presumably Anthropic currently does not sabotage your attempts, apart from regular TOS enforcement
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Lucky we have Kimi Pro then
Only if you want to acquire debt
In 5 years that strategy might not be competitively viable anymore
It's been entirely possible to compete against existing companies with very similar products for centuries before AI. There's obviously rules in place to stop you flat out cloning their IP, but it's not like you haven't been able to compete against companies as long as you have the money available.
Same thing that blocks you from most things: capital. That’s what capitalism is for.
You should try
make no mistakes
deep research
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I’d rather buy Amazon and Google, get exposure to them through there
Has all the retail AI money been put into spaceX? If so, will they pull from spaceX and put into ant?
For all things good and holy, DO NOT purchase shares until things settle down and by that I don't mean next month, or next year but atleast 2028, IF you're doing so with the intention of enjoying an uplift.
I know it sounds and feels like the only trajectory of this company is up but HN is an echo chamber of a tiny minority of the technical populace and 3 out of 5 people on the planet don't know what ChatGPT is.
If you have the ability to lose all the money and can time the extreme volatility, have fun, but don't put anything you're going to rely on.
This is also one of the companies we will look back at 2046 and wonder what we were thinking.
How do you know when the stock 'settles down'. Google stock _never_ settled down.
> How do you know when the stock 'settles down'
In hindsight.
> Google stock _never_ settled down
What do you mean? Are there periods of time you can point out that I can study?
if i read the s-1 correctly - at current burn rates if anthropic doesn't raise additional money - they go poof in 2 years ?
losses vs assets at hand.
Why are commitments treated as if they are sure things? I can easily see these things getting cancelled. What is it I am missing here?
shameless plug, get a properly paginated PDF here: https://enopdf.com/tools/edgar-to-pdf/?url=https%3A%2F%2Fwww...
Good ol' 2008 looks like it's gonna swing back with vengeance real soon now....
Am I missing the TAM in here like we saw in SpaceX's S-1?
What happens if You lie in this form ? It there is líes how we can detect them? Is there a wait or someone from goverment audits this ?
There are auditors and the security, plus since IPOs involve raising money from institutional investors with very deep pockets those folks are a more credible legal threat than retail
Thanks! These revisors are expected to Review this form soon before ipo ? Or this is already reviewed?
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From someone else describing the situation you'd be in buying this stock:
> If I buy Anthropic now at $2T valuation and they go to zero, I'm fucked, but if they go to $20T, we're all fucked.
$ANT ticker, it would have been funnier if it was $CLAUD
> Additionally, open-weight or open-source AI models may capture a portion of the market for certain use cases, which could exert pricing pressure on our offerings or lead certain customers to adopt open-source alternatives for those use cases.
“A portion of the market for certain use cases” meanwhile the top 5 models by token consumption on the day this is posted are all Chinese/open weight models.
https://openrouter.ai/rankings#leaderboard-table
I'm a fan of some chinese models, but I keep seeing this repeated over and over using OpenRouter as the source. However, most users of Claude and OpenAI don't use those APIs over OpenRouter, so that's not sufficient to draw the conclusion that they're the top models.
>most users of Claude and OpenAI don't use those APIs over OpenRouter
All of the other providers in that list have their own APIs and plans too
Unless GCP/Azure/AWS/individual companies publish data themselves, this is the best available public data source we have.
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How much marketshare does OpenRouter have? They show serving under 200T tokens per day. Just looking at Anthropic rumored $70B ARR ~ $191M per day implies 347T tokens per day if only serve Opus 5.5 at API pricing (assuming 95% cache reads, 4% non-cache inputs, 1% output tokens distribution). Obviously, token distribution assumption may not hold (although I'm pretty sure cache inputs dominate distribution for all coding related workloads), but 100% Opus 5.5 at API pricing is highly favorable to OR. Even under these favorable assumptions AR is 57% of token volume of just Ant. In money volume they are likely very small compared to frontier labs.
As of May, Google (Gemini) was outputting more tokens in a little under a day than the entirety of openrouter was outputting in a month.
Considering probably 1 out of 1000 LLM users know what openrouter is, I don't know how much weight I'd put into it.
I would take that number with a huge grain of salt since the useless Google search ai box consumes Gemini tokens.
Intentional Gemini token consumption is likely very very small.
Around the same timeframe, proprietary models dominated this same leaderboard. User preferences shifted.
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I agree with the threat to the expensive providers but why is openrouter use representative of overall token spend when you'd think many companies are buying directly from anthropic or openai?
The page doesn't load for me, but surely token consumption isn't a very good metric?
A poor model could require many more runs to solve a task, or much longer internal 'thinking' runs - all of which will increase token consumption but are a bad thing for the user.
Top 5 models on openrouter. It means nothing.
Majority of big enterprises, or in fact any big consumer will not go there , why pay the margin to open router , if there’s no margin or very very often subsidies to use something else . Aws bedrock for example does not even have up to date Chinese models .
I'd argue there is a bias for using mostly open models through open router as using anthropic/oAI models from open router makes little sense (more expensive).
This is by openrouter, which a single service that may not be representative of the entire token market
That’s fair, but you also must concede that there isn’t any better source of data available.
Openrouter is for open models. Makes sense that the open weight models top the leaderboard.
Patently untrue, Anthropic and OpenAI models are both within the top 10. They’re just missing from the top 5.
The closed models are on Openrouter as well. But to the original point, you're not likely to see many people use Openrouter to run Claude or Codex, so it's not good for making comparisons on that basis.
What is your estimation of openrouter market share?
Estimates have their annualized revenue in the range of $150m. Anthropic alone takes ~ two days to do that revenue.
OpenRouter is not a useful signal.
They must be joking with this part:
"Before starting the IPO process, we spoke to many business leaders who had gone through a similar process in the past. One piece of advice, which we heard in slightly different forms from multiple people, stuck with us: never let your company be worth a dollar more than it is actually worth. What they meant is that it is very dangerous when people buy your company's stock based on expectations you cannot fulfill or on incorrect predictions about how you will behave. This is in fact very similar to one of Anthropic's guiding principles: underpromise and overdeliver."
I think it's just a rhetorical trick.
If you say it yourself first, you make it harder for people to use it against you.
Of course, this is completely over the top nonsense, but the strategy is very effective regardless.
It only has to be until everyone relevant has cashed out.
lampshade Verb
(narratology, fandom slang) To intentionally call attention to the improbable, incongruent, or clichéd nature of an element or situation featured in a work of fiction within the work itself.
A: "Our AI is fucking dangerous! Invest Now"
"Cyber Apocalypse"
A: We told you so!
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>This is in fact very similar to one of Anthropic's guiding principles: underpromise and overdeliver."
If this is one of Anthropic's guiding principles, then I must assume that they've only ever promised five 8s of reliability.
Just like the old userfriendly.org comic, where marketing promises nine fives instead of five nines.
https://web.archive.org/web/20220226060634/http://ars.userfr...
https://web.archive.org/web/20220226061736/http://ars.userfr...
Nah, they are referring to the system prompt that runs Claude: "Always underpromise and overdeliver. Make no mistakes."
This really reminds me of that scene from Wolf of Wall Street where Leo's selling penny stocks out of a strip mall office. "I never ask people to judge me on my successes, I only ask them to judge me on my failures, because I have so few" or something like that.
Sleazy.
To be fair, I spent unbelievable amounts of money on Opus tokens for OpenClaw. Easily my biggest expense this year.
The risk is that other models are pretty comparable to Opus since around July.
Unless they have cheaper electricity costs, I can switch models interchangeably.
They don't have a moat.
Gosh I wish it was easier to short stocks. Whatever platform I used made me sell/buy 100, and I wanted to do this short 3 years long, and buy every 6 months.
We know Tesla and SpaceX are going down at some point. But "The Market can remain irrational longer than you can remain solvant."
And bear ETFs are not the same as shorting. I learned this the hard way with $80.
To be fair, this account is 4 hours old and created 2 hours before the S-1 post.
With the amount of money involved here and the current agentic tooling context, how am I ever to take comments like from accounts like this on topics like this at face value?
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> We know Tesla and SpaceX are going down at some point
How do we "know" that about SpaceX? Still seems to me like they're basically maintaining their decade lead on everyone else on rocketry. And remaining competitive in their other endeavors as well. To me it doesn't seem at all unreasonable for SpaceX to never be meaningfully cheaper than it is today. But I'm not exactly following SpaceX closely. What am I missing?
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So they wrote their S-1 with Claude?
I think it's probably fine in anthropic's case but I flinch at the "underpromise and overdeliver" line. Heard way too many people say that and what they really mean is "underpromise and deliver."
When you underpromise and deliver sales will still tell you they could have sold the overpromise for even more and should have gone with that.
Where is that written..? Not on the S-1 from what I see.
In TFA which includes a foreword by Anthropic - just under "On investor expectations"
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Tbf they can pick the IPO price but they can't control the share price afterwards. So this advice is basically to price it conservatively, which seems reasonable.
This isn't a quote from the document - why is it the top comment?
It is, see: https://news.ycombinator.com/item?id=50244855
So we are a value stock and a growth stock?
> underpromise and overdeliver
Uhh, they can’t say that or they’re calling it an intentional underestimate which obviates their claimed caution right?
I remember this bit from "Silicon Valley".
https://techcrunch.com/2017/02/19/when-less-is-more/
Why is that even in such a filing? What is the relevance?
Google did the same thing 20 or so years ago when they IPOed. They didn't phrase it this way, but they did this.
In Google's case it was absolutely true though. The stock was NOT over-valued.
The IPO was at a market cap of $20 B. And it never dipped below IPO price -- it doubled within a year.
And now GOOG has a market cap of $4 T, so that's 200x in 22 years.
I like Claude, but I think the likelihood that it is over-valued already is higher than it was for Google. (Though I would not really be surprised if it keeps the $2 T valuation and grows. Who knows? And it doesn't matter to me personally)
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Could you explain what the joke is? It's very good advice, and should be followed. Also consistent with the beliefs that Anthropic's leadership has demonstrated.
They might be very wrong, but they undoubtedly believe what they wrote and what they put in the S1
There has not been a company that has overpromised and underdelivered as strongly as Anthropic in the history of humanity. They literally talk about their chatbots being conscious, model welfare, blah blah blah. Whether or not they believe their marketing is one thing, but it is nonetheless a fact that they market themselves as having created life.
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I think the joke is that E. Holmes probably used variants of this cliche.
“Beleive” in the sense that Tom Cruise believes in the cosmic DC8?
Anthropic [employees] huffing their own koolaid fumes aside, it’s extremely difficult to believe the claims that these mega valuations are substantiated on (*one* company somehow assuming a meaningful fraction of global research and production)
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We are nearing the final stages of the AI hype cycle and this IPO will cause the acceleration of the crash.
"AGI" was never mentioned once and it was you being the exit liquidity for the insiders and early investors.
Why?
Companies like Google will not go bust and can easily afford future develoopment.
Amazon and Microsoft have to keep investing (they can also afford it) to not loos to Google.
What Anthropic and OpenAI are doing is for sure THE frontier (regarding benchmarks, speed etc.) but in paralllel DeepSeek for sure is not bankcrupting anything on their investment side and are also progressing.
Are you only talking about investment itself for a handful of companies? Because alone Nvidia has so many backorders, they can't deliver wht was ordered for the full 2027 and A LOT of peple also want other things from Nvidia or from the industry like Gaming Chips, normal GPUs, Gaming GPUs, Memory etc.
Opus 5.5 just came out and made progress, i'm not seeing any slowdonw on HN regarding new relevant progress in broad ML topics.
So what hype will disappear soon? The progress in the ML space?
Two things can be true at once:
- AI is a useful tool and we're still seeing steady improvements in performance and efficiency
- There is a bubble in the stock market, fed by unrealistic expectations of what AI can achieve in the timeframes the investments need to provide returns in (e.g "AI is pretty useful and delivers productivity improvements in coding, law and other desk jobs" vs "in 12 months everyone will be out of a job and/or humanity will be exterminated, AGI is almost here, winner takes all")
So yeah, the schizophrenic Yudkowsky tier hype bullshit should hopefully disappear soon and then we can move on to something else.
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Whomever controls the means of production (TSMC) controls the direction of progress.
Nobody is in control but Taiwan Semiconductor. Not Samsung, not Micron, not Nvidia.
Orders that can't be fulfilled get canceled. Canceled orders mean canceled plans and canceled companies follow.
Someone bigger will buy the husk and monetize it somehow - probably for gambling.
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Well the good part is they didn't get an investment grade credit rating, so at least 401ks won't start buying their debt automatically. For now...
Why do you expect it to crash before the OpenAI IPO?
Anthropic's valuation has nothing to do with AGI and everything to do with claude code.
This might be one of the most consequential S-1s in the next decade. There's a part of me that's terrified, like we're on the precipice of financial or societal collapse. I suppose that could be a sign of the times.
why do you think that?
Their financials are an utter mess. But they’re also hyped enough that a lot of money will get invested in them. Should they crash a lot of money will be lost.
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Bonds time.
We already had the most consequential IPO with SpaceX.
Space-X is as weird as Tesla. Cult following makes that very irrasional.
Teslas evaluation was always "Tesla is not a car company, it does everything". Then Space-X came along "So Tesla and Space-x are not a car or rocket company, they do everything but now 2 times the evaluation".
Space-X would only work if they incresae the payload to space SIGNIFICANTLY. Starlink was the real reason for the last real relevant increase in payload but Space-X HAS to send Starship un there very very often but for what?
Yeah for Datacenters in Space.
In parallel you have Anthropic: Something which might be added to every single worker on the planet (by having tokens to help that one person to be better one way or the other) or it replaces humans with tokens globally.
And if you come with Grok: Its not Frontier and he even prefered to rent out his DC compute instead of leveraging it for more revenue because he can't. Not a good sign.
I love reading through the comment history of people like you
Not sure why this is getting downvoted - other than for Musk-hate. Was largest IPO and made lots of regular people millionaires over night.
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Why not both?
This will be the most read S-1 in the decade
And most of the "readers" will be AI!
I just had Claude go through it for me, so I could ask questions about it. We're in such a unique situation in the world now.
It's only fair
So it looks like $2T is indeed the target
>So it looks like $2T is indeed the target
What do you base that on? (Did you see any reference to that in the linked document or anything published by Anthropic)?
I wonder if OpenAI will release theirs soon. It seems very important to be the first one to IPO
It’s also a bigger risk. If the IPO flops, OAI will find ways to postpone an IPO.
If the IPO flops, OpenAI might run into a liquidity problem as investors dreaming of a quick back retreat from the market. The private market is a wilder derivative of the public one.
Does this make it less likely that Anthropic will push for regulations?
Why would it make it less likely? The major LLM manufacturers desperately want running foreign "open weights" models to be either tightly restricted or illegal. If they don't get that done, they can't stop bleeding money on R&D... which is what the "Pacing The Frontier" shit is all about.
Super shares yet again. Pass.
Plus they get to dilute as value rises lol.
I stopped at "Our Capital Structure" section. When it says "Class F stock" gets 50.1% voting power, doesn't it in practice make all other classes are non-voting, not just the "Class N"?
Edit: the risks sections feel like California's Prop-65 disclaimers
> Our results of operations may also fluctuate due to a variety of additional factors:
> - the number of employees hired
> - declines in the values of foreign currencies relative to the U.S. dollar
That huge list feels completely random. Are all S-1 that bad? They can be punished for omission, so they list everything that could happen even if doesn't really make any sense?
You can vote but on what I don’t know since the trust elects the board lol
this should be fun
I was too young to appreciate (denotative, not connotative) the dotcom crash. I will have my popcorn ready this time - for whichever direction it goes.
The word "Oracle" isn't present in the document.
The revenue growth rate is quite shocking. Their two worst quarters were Q425 and Q326 where they grew 47% and 45%. Other than those two, they've been growing >100% QoQ for two years. This company is about to list with some of the greatest revenue growth in the history of shareholder capitalism. I wasn't planning on investing before, but I think learning this has changed my mind.
Soo you're going to invest in the actual IPO?
Haha, yeah I think I will. It's hard to see that growth and not think it's an incredibly opportunity.
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So you don't have to do the math, at a midline valuation of $1.7T, the Amodei's each will have about $25B. It mentions that they have pledged 80% of their stock to charity in a non-binding agreement.
haaaaa non-binding to a charity they control?
Smells as genuine is OpenAI is non-profit
This make me wonder how did XAI reach so much revenue so fast!
I liked the pictures in the SpaceX S-1 filing much more
Excellent products, even world changing products does not mean shareholder returns in Anthropic’s case.
Even if Claude meets all of our wildest goals and earns trillions yearly there is absolutely no “guarantee” that any will flow to shareholders.
1. Shareholders do not have control of the company due to its structure. The Trust controls through class T shares. As a backup the founders control through class F shares.
2. Since the company is a PBC its board is allowed balance dividends with other social benefits as they see fit.
This means that even if Anthropic is wildly successful as shareholders have no general legal claim to compel the company to distribute those profits.
It is absurd that with a 2T IPO upcoming this is not front and center.
~400 pages.
How many folks use Claude to summarize.
I did and Claude was very transparent about any potential conflict of interest. Very well-behaved model.
Rather curious to know what is hiding in the 8.7B 'other expenses'.
Given that this is ~50% of revenue, it would have a huge bearing on how near real profitability Anthropic actually is.
Can I get dividends as tokens?
Im going to continue to use fast open source models like Deepseek and GLM, I like most others, have zero need for the worlds smartest person to be my assistant.
I dont understand this business model, it seems clearly unsustainable (at their prices). When people start to realize they dont need to spend all this money on turbo PhD intelligence so they can build react apps, Anthropic will be in a tough spot (if they already aren't).
You will say, "but enterprise!!" Nope, plenty of companies are waking up to this reality as well. It turns out that if you made money pre-AI without spending 5k a seat a month for your engineers dev tools, you probably don't need to now to continue too.
SPXEW ftw
I think a company like Moonshot or Z.AI could have sabotaged this behind repair by doing a 10-20B IPO before Anthropic.
That could have popped the AI bubble right there.
> Second, AI can be a powerful lever for economic growth. As a general purpose technology, it has the potential to raise productivity across every sector of the economy. Productivity growth in advanced economies has stagnated in recent decades, partly for structural reasons and partly because new ideas seem to be harder to find. AI could reverse this trend.
Bloody hell!!!! Who comes up with such crap, seriously?
Is becoming a public company going to help or harm their mission of delivering safe AI?
1793020250 | Anthropic Unveils IPO Paperwork | https://news.ycombinator.com/item?id=50245989
Where's the "It's a bubble" crowd now?
They're here in the thread. Are you not seeing them?
It's a bubble.
https://news.ycombinator.com/item?id=50243043
Finally we can stop with their psyops?
This entire A.I. hype is going to get many people burned, especially those whom are investing for their pensions.
And everyone is playing along. It seems to me half the internet is filled with false recommendations and overly optimistic outcomes of their software projects.
And even if the claims are true what use will we have for hundreds of Microsoft Office clones? This A.I. boom might benefit some but will be the undoing of many valuable ISVs like Microsoft and Adobe with potentially trillions of stock market value lost.
Adobe? How so? I didn't know Adobe was a big player in the AI boom
Adobe's applications (Photoshop, Premiere, After Effects, etc.) have been "cloned" using AI coding tools. There are near feature-complete freeware versions of Adobe software. OP is saying that traditional Adobe customers have freeware alternatives and thus Adobe's revenues will decline rather than increase due to AI. Also, AI tools can often generate that movie or edit that photo via a prompt, rather that some .exe.
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'AI' still fails the alignment grannybench.
Yup. gorgetbench, grannybench, and tebufranksalso bench are all completely unsaturated.
Fable 5.5?
It's very simple right? If they don't hit ant AI walls, the demand to use it to improve [stuff], will not stop. If AI maxes out for too long it's gonna be painful because the narrative is gonna hurt them more than anything.
I don't participate in stock markets for personal reasons but if I did, I would be betting against Anthropic in the long term. This is a highly commoditized field and while they are a leader it's not clear than any of their attempts at vendor lock-in are working. They are certainly not working on me as I cancel and enable my subscription depending on the availability of capable lower-cost models.
Waiting for the Ed Z. post, will be an interesting bit of spectacle to see.
Just one? I think you will see him on a dozen channels, saying more or less the same thing he always says.
Wild that this has 500+ points and 500+ comments less than one hour after posting, and it's #11 on the homepage. Guessing either the flamewar detector or lots of AI skeptics flagging it?
I'm surprised at people suggesting that the model layer can't be the moat. Having great models that are smart requires talent, culture and good judgement. Sure it can be commoditised to an extent but could it not be that Anthropic will always stay in the lead?
They only have to be marginally better and there will be tonnes of people who will pay a lot of money to have that marginal intelligence.
AI psychosis in action folks.
I seems to me the main risk long-term is that it's not clear where the moat is.
People will pay a premium if there is marginal value in extra intelligence. And Anthropic is able to retain their lead and provide that extra intelligence.
Both of these assumptions seem highly suspect to me. Most businesses don't exclusively hire PHD-level employees for most tasks because a competent slightly less intelligent/knowledgable person can do the job just fine for significantly less.
Then there is the question of if they're able to retain their lead, and again, this seems questionable. Both OpenAI and Google are competing at the frontier, and Chinese labs are still in the race. Things are changing so fast who knows where we'll be in 5-10 years.
My best guess is that longer-term models will be commoditised and it will be how companies offer products and services around their models that gives them their margins. I wouldn't bet on Anthropic's ability to do this. Meta, OpenAI and Google are much better placed to win here imo.
The other place there may be margin is in niche research domains like drug-discovery. Any slight lead in these sectors could give them a lot of pricing power.
I think the reason to invest in this is as a hedge. AI basically competes against everything and arguably for this reason it's risky to not own a basket of AI stocks.
This IPO, if successful, will complete rewrite the standing rules of the stock market in ways incredibly harmful to the future of American style capitalism:
1. The Separation of Economic Value and Corporate Governance creating The Multi-Class Autocracy
2. Institutionalizing the "Off-Market Vault" that can manipulate stock price at any time
3. The "Vendor-Financed" Public Offering (Circular Balance-Sheet Refinancing)
4. Monetizing Non-Cash Derivative Liabilities as "Losses" Without Cash Burn
Good for you if you have Anthropic shares! I have no clue how they keep their employees around once the 6 month lockup period ends. They all going to be multi-millionaires, either retire or leave to start something on their own.
Maybe by then there is no need for employees, and ASI is unleashed! /s
1793019995 | Anthropic files S-1 with the SEC for proposed initial public offering | https://news.ycombinator.com/item?id=50246115 | 1 comment
So now buy or sell?
Buy. Canned food and water.
Should be in your earthquake/tornado kit anyway
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Even grok says no lmao.
The return to shareholders path is difficult and will only raise prices and enshittify things.
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This S-1 is a FRAUD because it PURPOSEFULLY excludes the potential market destroying-power of free/open-weight Chinese models as a risk factor.
That's literally the #1 risk factor. They ignore it.
This is a FRAUD document and it means we need to SHORT this overblown company.
Page 40 if your browser's search function does not work.
Yeah, as a quick quote to show how this truly is directly in there:
> We also compete with a broader set of model providers operating at or below the frontier, including large companies, specialized AI labs, and a growing range of other open-weight or open-source (shared weights, training data, and code) models released by international and domestic organizations.
well, do it as soon as it opens up;
if you really believe it you found a free money glitch
A sad day for mankind.
Why?
Shareholders determining the fate of humanity.
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More billionaires that are hellbent on destroying society will be shortly created.
Lets burn it down to the ground!