Anthropic now earns $2.08 per compute dollar

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 31:48

   So, let's jump into the next story, which is dissecting the Anthropic IPO. So, we reported that they were about to file their IPO, and on Monday, they did. The ticker is ANT on the NASDAQ. Wall Street Journal says the IPO is likely to occur on the week of November 16th. Anthropic is planning to raise $100 billion at a valuation somewhere between $1.5 and $2 trillion. And this would be the biggest IPO in history.

2. 32:17

   So let me take a moment and dissect the IPO. I'd love your guys' added thoughts on this. So first, let me cover what's strong. They have $4.6 billion in all of 2025 as revenue. That's jumped to $16.3 billion in just the first half of 2026. And in Q2 of this year, Anthropic made its first operating profit of nearly a billion dollars. The other side, we talked about this, its capital efficiency. The Anthropic now earns $2.08 in revenue for every dollar of compute, up from $0.40 just 18 months ago.

3. 32:51

   Put in a dollar compute and double it in revenue. The revenue growth 29 times, while compute cost only grew six times. Pretty incredible. They have 11,900 companies as their customers at over $100,000 a year. Pretty amazing. You know, sort of they've spread their customer concentration. And let me hit three weaknesses. The first is compute commitment. Anthropic now has more than $500 billion in commitments, much of it non-cancelable, including $120.5 billion with SpaceX.

4. 33:28

   And then revenue concentration to customers are about 20% of their first half revenue. And nearly half of its revenues flow through Amazon, Google, and Microsoft Clouds, which are also its competitor. And the final weakness, I think you can call it a weakness or a strength, depending on your point of view, is that the seven co-founders keep 50.1% of the voting through one special share. So ultimately, the public investors wouldn't control the company.

5. 33:58

   Dave, what's your take on this? Well, it's a very, very financially stable company. When you poke holes in it because of compute commitments and otherwise, it is, compared to the Internet 1999 era, this company is just a cash machine. And also the compute spend, yeah, non-cancelable, but with all kinds of knobs and bells in there. So I think it's just an incredibly stable company. Now, that's not to promote the IPO.

6. 34:24

   A $2 trillion valuation bakes in a lot of goodness. So that doesn't make it cheap. It just makes it the most extraordinary company in history by a wide margin. You know, the biggest IPO in history was Meta, back when Meta went out many years ago. And then Cerebris broke that record. Our good friend Andrew Feldman. And then SpaceX. But, you know, remember, Cerebris went out, I think it was maybe a $40 billion valuation, a couple billion dollar raise.

7. 34:49

   Now we're talking about a $2 trillion valuation and a $100 billion raise. So raising more money on IPO day than the entire valuation of Cerebris when it went out, which was just, what, a year, year and a half ago, if that. So this is the most extraordinary time by huge, huge, huge orders of magnitude bigger than anything we've seen before. So, you know, if the stock goes up, great. If the stock goes sideways, great.

8. 35:13

   if the stock goes down by half, it's still the biggest thing ever. So just, I want to set that context because nothing is going to slow down the AI juggernaut. The rate of change of the world. So when you read a headline that's inflammatory, don't slow down your life plan in reaction to that. You need to move as fast as you possibly can while the singularity is evolving in whatever direction you're going. But yeah, I think Anthropic is, it's correctly priced. It's growing faster than anything we've ever seen. It's shattering every record. Um, I think the super voting structure is not that uncommon these days. It's a little bit weird and we can talk, we can talk about that. Will you buy, will you buy into the IPO Dave? Well, I, I, if I didn't have access to seed stage deals, which is now just the biggest thing I've ever seen, uh, you know,

9. 36:01

   so if I were just out there on the street, would I buy in? Yeah, I would, I would definitely buy in. Um, you know, I would, I would buy in not investment advice, but you know, look, if you want to be yeah alex is always promoting being indexed and being being hedged across the universe ai is a big big part of where you want to be exposed uh if you want to just be neutral you know and it's hard to get into ai so it gives you an opportunity to at least get some exposure so i wouldn't you know mortgage the house or anything like that but i would definitely want exposure to the category now you have the opportunity to be exposed to the category you know and you can do that via spacex too but you're buying into a lot of other things when you