Anthropic Needs Stock Market to Pay Its Bills?

Anthropic is getting ready to go public - valuation 2 trillion dollars.

Official story: revenue is booming, growth is growing, and the business is finally starting to make a profit.

BUT…

Anthropic has clever accountants with lots of tricks to look healthy, never mind that business still loses vast sums of money.

A possible plan is to list a "profitable business" to use stock price for speculation - cash from public investors to keep paying its massive server and energy bills.

Anthropic’s clever accountants

Anthropic claims it has reached profitability. Really?

Easy, inflate revenue by using gross accounting. When a user spends money to use Anthropic through cloud providers - Amazon Web Services, Google Cloud or Microsoft Azure, they record total bill as their own revenue, then list the large cut (those cloud platforms take) as a separate business expense. There we have an impression that the company is much larger than it actually is, based on the amount of cash it holds.

Highlight adjusted profitability. To get a positive number, just ignore major real costs. They remove stock payments for employees, debt payouts, and long-term research expenses. Under standard financial rules (normal companies use) Anthropic is deeply in the red - losing tens of billions of dollars on data centers, chips, and expert salaries.

Hide major hardware costs. What huge investments in servers and computer chips? Anthropic uses long-term leases and multi-year cloud deals to delay these expenses, keeping heavy costs off its current balance sheet just in time to show clean numbers to public buyers.

Big Investors Are Already Covered

While everyday buyers will see Anthropic for the first time during the initial public offering, major Wall Street firms are already in position. Large asset managers like BlackRock put money into Anthropic years ago during private investment rounds at a tiny fraction of the current asking price.

This creates an unfair setup for ordinary buyers:

• Early institutional investors bought their shares at low private prices. Selling to the public at a huge valuation gives them a massive payout, even if the business never turns a profit.
• Once upon a time, companies went public after proving they could make real money. Here, early investors use the stock market launch to protect their own cash, leaving ordinary buyers holding the bag.

Anthropic IPO

Why go public while losing billions of dollars?

Make ends meet?

• AI models require non-stop spending on server capacity and power.
• Standard software profits cannot cover these bills.
• Borrowing billions from banks would mean paying back massive interest payments that the company cannot afford.

Selling new shares on the public market solves this problem!

If the stock price stays high thanks to marketing, Anthropic can regularly sell small amounts of new shares to raise billions of dollars. Which will go straight to chip makers and data center operators.

Voila!

One Small Issue Though - Anthropic hopes to use the funds it has raised to hold out long enough until computer chips become cheaper and corporate clients begin paying more. What if it won't happen?