The Anthropic Prospectus Arrives: My (but not the) IPO valuation!
I am a dabbler, by nature, moving on from topic to topic, but this year, I have spent more time than usual on AI, but that is because it seems to be part of almost every business or economy related story. I tried to value SpaceX ahead of and after the filing of the prospectus for its initial public offering before moving on to the question of whether it and OpenAI and Anthropic should be part of…
Anthropic, the AI company, filed its S-1 prospectus on October 26, providing valuable information for those considering its initial public offering. The 416-page filing is lengthy and contains various distractions, as is common in recent IPOs. Despite its length, Anthropic's prospectus offers useful data for both optimistic and pessimistic investors.
The revenue growth section shows that Anthropic's revenues have increased dramatically over the past year, with the first two quarters of the current year seeing revenues about fourteen times higher than the first two quarters of the previous year. However, revenue growth slowed in the third quarter of 2026 as OpenAI gained market share and compute capacity became a constraint. Additionally, some enterprises moved to more cost-effective open-source models.
Customer composition is favorable, with the number of enterprises spending over $1 million annually on Anthropic's Claude models rising to 1,900 from fewer than 100 a year ago. However, Anthropic still has a concentrated revenue base, with its top five customers accounting for 25% of revenues.
Operating and net profitability has been negative, with an operating loss of over $8 billion for the first six months of the year, corrected for non-cash and one-time charges. However, the company reports an operating profit in the most recent quarter, and expenses are decreasing as a percentage of revenues over time, with compute costs, the company's biggest expense, decreasing from over 250% of revenues to 48% of revenues on a quarterly basis.
Anthropic reports significant investment in compute power to support its AI agents, but this investment is not explicitly shown in the financial statements, as there are no substantial capital expenditures in the statement of cash flows or debt in the balance sheet. Nonetheless, the company is transparent about its future compute power commitments, with hundreds of billions in compute commitments in future years.
While Anthropic is catching up to OpenAI in terms of compute power, this progress comes at a high cost, with future compute power investments expected to be substantial.
Written by urgent.news from Musings on Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
