Yesterday, Anthropic dropped the 335-page S-1 prospectus for its initial public offering on the NASDAQ. [SEC]
The company plans to go public in mid-November under the ticker symbol “ANT” with an investor estimated valuation of $1.5 trillion. They hope to raise in the range of $100 billion.
As a serious business proposition, you’d be nuts to go for this. Large language models are a commodity. The idea that chatbots will make a leap to artificial general intelligence is absurd.
And yet Anthropic tells us its AI will cure diseases! It’ll take away all the jobs, but also improve the economy! It’ll do magical things that were impossible for mere humans. If it doesn’t destroy us all!
Anthropic’s promise is that AI bubble finances can ever work out, and you can buy into Anthropic and get rich! The singularity is real and Anthropic can sell it to you!
This version of the S-1 is really a draft — all the key numbers are blank! It’s a waste of time to think too hard about this one. But we did it anyway.
Effective altruist fan fiction
Anthropic is not just a company — it’s on a mission. That is, it’s run by effective altruist cultists who dream of the AI god saving humanity — or killing us all. This is apparently not a religion.
Anthropic’s seven founders left OpenAI over concerns of “AI safety,” which in this context means bad AI gods.
As a reminder, the last effective altruist who people handed millions of dollars to was Sam Bankman-Fried of the collapsed FTX crypto exchange, who is now behind bars.
Here’s what Anthropic CEO Dario Amodei says in his letter to investors in the S-1:
We encourage you, as a prospective owner of our stock, not to think of your purchase in purely transactional terms. We hope you will see it instead as an opportunity to be part of something greater. The advent of machine intelligence is one of the seminal moments in human history.
… Our aim is to help humankind chart a safe course through this technological evolution, open new frontiers of discovery, and bring forth an age of miracles.
That’s great, Dario, thanks.
One big idea in the S-1 is that Claude can improve itself by recursive self improvement! It’ll write code to improve itself, then it can improve itself more! This is an idea straight out of effective altruist notions of the singularity. It’s how Eliezer Yudkowsky thinks a chatbot will elevate itself to an AI god — by feeding back on itself. And not get chatbot mad cow disease from model collapse and sit there babbling about goblins.
Numbers that matter
An S-1 exists to disclose all the important numbers investors need to know.
A lot of the numbers in the S-1 are just plain blank! Quite a lot of these are the sort of numbers an S-1 exists to disclose. A disclaimer at the start says:
The information in this preliminary prospectus is not complete and may be changed.
So that’s all right then, apparently.
Of the numbers that are present in the document, a lot are unaudited and were not worked out according to GAAP — which S-1 numbers are supposed to conform to. There’s whole multi-page subsections of these BS numbers that you should not see in a credible S-1.
You should just ignore all these fake numbers. Only the real audited and GAAP numbers are even slightly credible. Pages 22 and 23 have the basic chart of revenue and costs. The rest of the real numbers start on page 161 — with a lot of fake numbers mixed in, and blanks they didn’t fill in.
The company’s revenue has been growing. Audited revenue for the first half of this year is $16.3 billion. Well done, given in 2025, Anthropic made $4.6 billion for the entire year. The revenue is mainly subscriptions to Claude. A quarter of that revenue came from only five customers in the first three quarters of this year.
Operating expenses ($17 billion) were slightly higher than revenue. Compute costs were around $9 billion for the first two quarters. Sales and marketing were $3.2 billion.
The company lists $112 billion in cash and cash equivalents on hand — which is mostly investor money they haven’t burned through yet — and another $19 billion in short-term investments.
The bills are an order of magnitude larger. Anthropic is liable for $807 billion in data centers, chips, and compute commitments over the next 10 years.
The commitments are not all the same. The company will be paying $3.1 billion a month to SpaceX for hosting through 2029 and either party can cancel with 90 days’ notice.
But Anthropic has four deals it can’t cancel, which add up to $430 billion, including a $110 billion deal with AWS through April 2036. That’s a lot of liabilities to service with that revenue. And not even any profit!
Convertible notes and imaginary losses
The accounts show a loss of $72 billion on convertible notes. But this is not a real loss of real money and is not a worry.
A convertible note is a loan that can be paid back as equity in the company. Investors like Amazon and Alphabet put in cash and get paid later in shares, generally at a discount to the IPO price.
What happened was Anthropic’s valuation went up, so the book value of the convertible notes went up. Anthropic is supposed to account this as a loss under GAAP — though it’s a loss of imaginary money on unpaid loans.
Governance
How will Anthropic be governed? Simple — the founders keep complete control. But they’ve set up five different types of shares, just to keep investors confused.
Ordinary shareholders will have no say in how this company is run. The seven founders keep 50.1% of voting power via Class F shares and the Benefit Trust (a single Class T share) appoints most of the board. This is for the good of humanity.
Normal shares that you can buy are Class A, which have one (useless) vote each. There are also Class N shares that have no votes. Anthropic wants to use Class N shares to pay off the convertible notes. Class N shares are functionally just official Anthropic meme coins.
Class E shares go to employees who are non-founders. These are non-transferrable and have limited voting rights.
The IPO lockup will let some early investors and employees sell before the standard 180 days. SpaceX did something similar.
Risks
The best bit of any SEC filing is the risk factors. An entire one-third of the S-1 is risk factors. There are some real risks, but a lot of it just says Anthropic might risk being just too cool and good at making AI, e.g.:
Misaligned AI systems could corrupt institutional decision-making or cause large-scale harm through autonomous actions that are not visible or understandable to their users and operators.
Risk factor: the singularity.
Anthropic does not list Chinese competitors as a risk factor. The only listed China risks are tension between Taiwan and China affecting TSMC making GPU chips and US-China tension leading to possible export restrictions. That’s it.
One major risk is that Anthropic can’t build data centers fast enough. Every aspect of data centers is supply constrained. Anthropic does a reasonable job of listing those risks from pages 32 to 37. Everything Ed Zitron says is a data center risk, Anthropic agrees.
Another real risk is that Anthropic could run out of money, because it’s still a giant cash furnace:
We have incurred significant indebtedness in order to operate and grow our business, including to fund our substantial compute commitments, and our ability to service this indebtedness may be constrained by our cash flows and liquidity.
… We may require additional capital to meet our substantial ongoing obligations and support our business growth, and our ability to generate sufficient revenue and secure additional capital on acceptable terms is critical to our continued operations and competitive position.
… We have a history of net losses and may not generate sufficient revenue to achieve or sustain profitability in the future.
There’s one very important risk that Anthropic did not mention — the risk that the AI sector as a whole goes bad and the market collapses. That is, the bubble pops. That’s an extremely material risk! Why is this not present?
They do list some parts of a bubble pop. But these are presented as being about just one company — not the whole AI sector.
What’s the excuse?
The S-1 for SpaceX had the same sort of issues as the Anthropic S-1 — though at least SpaceX put the frickin’ numbers in. But SpaceX was selling entirely on Elon magic. Nobody cared what the S-1 said, they just wanted to buy shares in Elon Musk.
Anthropic doesn’t have a cult of personality. Instead, Amodei is selling the effective altruist dream of the future AI god super hard. And he really doesn’t want you to look too closely at the numbers he left out.
Anthropic will never be profitable. But the founders, the backers, and the employees will make a bundle. And Anthropic will get the money to keep the plates spinning a bit longer.
This S-1 is trash. We’re not confident the final version will look any better. A lot of the blanks in this document will only be filled after Anthropic gets out there to see if the big institutional investors will buy in.
It is possible that Anthropic’s IPO will fail the way WeWork’s IPO did in 2019 — when the numbers were just too hilariously awful to pass.
But we suspect dreams of AI financial magic will carry the day, and the Anthropic IPO will at least launch. Then it’ll be in the stock indexes under the new NASDAQ rules. And that means your pension. Trust in Dario!
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