0:00 In the first six months of this year, the company behind Claude lost eighty billion dollars. That's about eighteen million dollars an hour. Nights included. And Wall Street's answer? We want in. Because Anthropic is about to sell itself to the public, in the biggest IPO ever planned. Wait. It lost how much? Eighty billion. Okay. Where do I tap? So where did the money go? And why has its own CEO already explained, on a podcast, exactly how a company like his goes bankrupt? San Francisco, January twenty twenty-one. Seven people leave OpenAI and start a new AI lab. Two of them are siblings: Dario Amodei, the scientist, and his sister Daniela,
0:48 the one who keeps the company running. Why they left is a whole other story. This one is about the bill. Because building an AI takes hardware. A lot of it. Claude doesn't live in a box under someone's desk. It lives on huge racks of chips in data centers, most of them owned by other companies. Every answer it gives burns time on those chips. The industry calls that compute. Think of it as rent for a brain. And brains are expensive to rent. In May, Anthropic raises its first big round, a hundred and twenty-four million dollars. Early on, another investor puts in five hundred million. His name is Sam Bankman-Fried. You know how that one ends. In November twenty twenty-two, his crypto exchange, FTX, collapses,
1:35 and his piece of Anthropic gets swept into the bankruptcy with everything else. Then the people cleaning up the wreck go through the boxes. We've got a stake in some AI lab. Is it worth anything? It's worth more than he paid. In twenty twenty-four, the estate sells it for about one point three billion dollars. That's roughly eight hundred million in profit. The most famous crypto fraud of the decade made one great investment, and it was in the AI lab known for being careful. Meanwhile, Claude starts selling. Twenty twenty-three: forty-one million dollars. Twenty twenty-four: three hundred and eighty-six million. Twenty twenty-five: four point six billion. About ten times bigger every year. The giants want in.
2:21 Amazon puts in eight billion dollars. Google signs up for as much as forty. But look at how they pay. They don't buy shares. They hand over cash for a promise: an IOU that turns into shares later. Hold on to that. It comes back with a very big number attached. Because the losses grew even faster. In twenty twenty-five, Anthropic lost forty-two billion dollars. About nine dollars lost for every dollar sold. That's the kind of math that usually ends a company. Here, investors kept paying more. Even the snacks were losing money. That year, Anthropic let Claude run a small vending machine in its office. The staff nicknamed it Claudius. Can you stock tungsten cubes? Absolutely! Also, here's a discount code.
3:07 You're selling them for less than you paid. Customer loyalty. It also tried to sell three-dollar Coke Zero to people who could get it for free in the same office. Claudius lost money. Anthropic wrote it up as research. Then, in early twenty twenty-six, Anthropic got so good at its job that it scared the rest of Wall Street. January twelfth, twenty twenty-six. Anthropic launches Claude Cowork, an AI that doesn't just chat, it does office work. A few weeks later, it adds plugins for eleven different industries. Wall Street does the math. If an AI can do the work, what happens to the companies that sell the tools for that work? In early February, software stocks lose about two hundred and eighty-five billion dollars in value.
3:56 Thomson Reuters, the company behind Reuters, falls sixteen percent, its worst day ever. What did Anthropic release? Plugins. How many plugins? Eleven. That same month, investors put in thirty billion dollars, valuing Anthropic at three hundred and eighty billion. Google alone puts in ten. And Dario sits down for a long podcast interview and says something about all that rented compute. We'll come back to it. Then the government turns. Anthropic had refused to let Claude be used for mass surveillance at home or for weapons that fire on their own. So on February twenty-seventh, Pete Hegseth's Pentagon labels it a supply chain risk. As of today, Anthropic is a supply chain risk.
4:42 Isn't that label for companies from rival countries? Next question. He's right, by the way. Anthropic's own lawyers say the losses this year could run from hundreds of millions of dollars to multiple billions. For a company getting ready to ask the public for money, this is how the whole plan dies. It didn't. Because the government was never the money. It's less than two percent of Anthropic's sales. The Pentagon deal at the center of the fight was worth about two hundred million dollars over two years. These days, Anthropic sells that much in about a day. And the spring is the best stretch it has ever had. From April to June, sales hit eleven point six billion dollars, and for the first time, the business makes an operating profit: nine hundred and seventy-four million.
5:30 Operating profit means what you make selling the thing, minus what it costs to make it. Claude finally paid for itself. In May, investors put in another sixty-five billion dollars, at a value of nine hundred and sixty-five billion. Remember that first round of a hundred and twenty-four million? This one is over five hundred times bigger. That's more than double February's price, in about three months. Which is fantastic news. And, as it turns out, the reason it lost eighty billion dollars. June first, twenty twenty-six. Anthropic sends its IPO paperwork to regulators, in secret. Eleven days later, somebody else goes first. SpaceX lists at a hundred and thirty-five dollars a share,
6:18 worth one point seven seven trillion, with almost a third of the shares set aside for regular people. Day one, it closes at a hundred and sixty-one. Then it peaks at two hundred and eleven. By the middle of July, it's below where it started. By early August, a hundred and eight. In about six weeks, half the peak is gone. That's the chart Anthropic's bankers get to look at every morning. In October, the books leak. Then, on October twenty-sixth, the filing goes public. Its ticker will be ANT. Sales in the first half of the year: sixteen point three billion dollars, up from about one point two billion a year earlier. Loss: eighty point seven billion. The draft's list of things that could go wrong ran ninety-four pages.
7:04 We're worth more than twice what we were in February. Correct. Congratulations. Then why does this say we lost seventy-two billion dollars? Because you're worth more than twice what you were in February. Remember the IOUs? Amazon, Google and other early backers gave Anthropic cash in exchange for shares later. Picture a lemonade stand. Your neighbor gives you a hundred dollars today for a slice of the stand, handed over down the road. Then your stand becomes the hottest stand in America. That slice is now worth a fortune, and you still owe it. The accounting rules say: the more your promise is worth, the more you owe. And that jump goes on the books as a loss. Out of the eighty point seven billion,
7:49 seventy-two point four billion is exactly that. A charge on paper. So did any actual money leave? Not for that part. Look only at the business of selling Claude, and it lost about seven hundred million dollars in those six months. That's real money. It's also a long way from eighty billion. And over the first nine months of the year, the business itself brought in six point six billion dollars more than it cost to run. Now flip it around. Amazon owns a pile of those IOUs. On its own books, it reported gains of more than sixty billion dollars from them. Same promise. One company calls it a loss. The other calls it a profit. And it keeps going. On November second, a new filing: the loss for the first nine months is a hundred and four billion
8:37 dollars. That's more than SpaceX raised in its record IPO in June. Ninety-four billion of it is paper, including a two-billion-dollar charge for matching the staff's donations to charity. Meanwhile, Anthropic is sitting on about a hundred and thirty-two billion dollars in cash. More than it lost. Both numbers are true. So the scary number on the thumbnail is mostly a scoreboard of how fast Anthropic's value went up. Case closed? Not quite. Because buried in the same filing is a different number. And that one is real. Eight hundred and ninety-five billion dollars. That's how much Anthropic has signed up to pay for computers in the years ahead. Its sales so far this year: thirty-three billion.
9:22 The bill is about twenty-seven times bigger. Here's who gets paid. Broadcom, about a hundred and sixty billion. Google, a hundred and twenty. Amazon, a hundred and ten. Microsoft forty-five. And about a hundred and twenty billion to SpaceX's AI business. Yes, that SpaceX. The company whose IPO record Anthropic is chasing is also one of its landlords. Some of it can be cancelled, or depends on conditions: about two hundred and fourteen billion. But seventy billion is due in the next twelve months, and almost four hundred and fifty billion before twenty thirty-one. Why sign for so much, so far ahead? Because compute gets rented years in advance. Book too little, and you pay the last-minute price.
10:07 That's exactly what happened this summer. From July to September, computers cost Anthropic nine point nine billion dollars, up seventy-seven percent. Five billion of that was expensive capacity grabbed at short notice. The business slipped back into a small operating loss. We need more computers. Today. Today costs more. How much have you got? About five billion dollars' worth. So that's one way to get it wrong: buy too little, and you pay through the nose. The other way is to buy too much. Which brings us to you. Here's how a company sells itself to the public. First, the filing. Then the roadshow: for about a week, bankers pitch the company to the biggest funds on Earth.
10:54 The funds place orders: this many shares, at this price. The night before trading starts, the company and its banks pick the price that fills the book. Then the market opens, and the price does whatever it wants. How much did it lose? Which loss? The big one. Oh, that one's good news. Then we'll pay the low end. Goldman Sachs and Morgan Stanley lead it, with twenty-two banks in all. One more thing to know: Anthropic only gets the money from new shares. When early holders sell their shares in the deal, that money goes to them. And most insiders can't sell for six months anyway. The founders, for up to about a year. Regular people get a real seat this time. The filing names six brokers, from Schwab and Fidelity to Robinhood.
11:41 Reports say the public could get fifteen to twenty percent of the shares. And in September, Anthropic split every share into ten, before the public could buy one. The price talk is one and a half to two trillion dollars. The big funds are pushing for the low end. Even there, buyers pay about forty-three dollars for every dollar of sales Anthropic made over the past twelve months. At two trillion, fifty-seven. Jay Ritter, the professor Wall Street calls Mr. IPO, has counted. Out of four thousand one hundred and ten American IPOs from nineteen eighty to twenty twenty-four, only fourteen priced at forty times sales or more. On average, they did fifteen percent worse than the market. Aswath Damodaran, who values companies for a living,
12:28 called the latest quarter "the most telegraphed third quarter number of all time." He puts Anthropic at about one point four seven five trillion. Just under the low end. Now, back to February, and that podcast. Dario was talking about the danger of a lab buying compute too early, years ahead of the customers. He didn't soften it. If I'm just off by a year in that rate of growth, or if the growth rate is five x a year instead of ten x a year, then you go bankrupt. That's not someone betting against the stock. That's the CEO, describing the trap his whole industry is standing in. Anthropic has signed eight hundred and ninety-five billion dollars of bills on the bet that growth shows up on schedule. Now it's asking the public to buy in.
13:13 Here's where it stands. The roadshow can start as early as November tenth, with trading planned for mid-November, the week of the sixteenth. The Pentagon fight stands at a split: a judge threw out one label in August, and an appeals court kept the other in September. SpaceX, the record holder, is trading right back around its IPO price. And whatever the price, the seven co-founders keep control through one special share. One share, with fifty point one percent of the vote. They've also pledged eighty percent of their stake to charity. Eighty billion dollars sounds like the end of a company. Here, it's mostly the receipt for becoming more valuable. The number that decides this story is the one nobody puts on a thumbnail. Eight hundred and ninety-five billion dollars of computers, already booked.
14:00 Now the customers have to show up on time. As Mr. IPO put it, "a lot of things have to go right."
