Sasha critically analyzes Anthropic’s leaked IPO filing, revealing that despite a $2 trillion valuation and reported revenue growth, the company suffers massive losses, obscured by complex accounting practices like stock-based payments for compute costs and inflated revenue figures. He argues that these tactics mislead investors about Anthropic’s true financial health, likening the IPO to a financial bubble fueled by unrealistic expectations and opaque disclosures.
In this video, Sasha critically examines Anthropic’s leaked IPO filing, which values the company at an astonishing $2 trillion. Despite reporting $4.6 billion in revenue for 2025, Anthropic posted an $8 billion operating loss, spending $2.75 to earn every dollar. A significant portion of their expenses, $7.3 billion, was spent on data centers, exceeding their total revenue, with additional non-cancellable commitments amounting to $518 billion. The company claims profitability only when excluding major costs like stock-based compensation, a tactic Sasha likens to ignoring essential expenses, thus painting a misleading financial picture.
Sasha highlights the complexity and opacity of Anthropic’s financials, noting that much of their revenue is shared with cloud providers like Amazon and Google, who receive about 16% of the revenue. Anthropic reports gross revenue without deducting these substantial costs, inflating their margins. Furthermore, while revenue appears to be growing rapidly, corresponding cost data is often omitted, obscuring the true financial health of the company. The reliance on usage-based revenue means costs scale directly with revenue, making profitability challenging.
A major point of contention is Anthropic’s practice of paying for compute resources with stock-based instruments (IUs) rather than cash. This accounting maneuver resulted in a $34 billion non-cash charge reflecting the increased value of shares given to providers like Amazon and Google. Sasha argues this is not just an accounting trick but a real business cost, as these shares represent payment for essential services. Ignoring these costs misleads investors about the company’s true financial position, as the actual compute expenses are far higher than reported cash outflows suggest.
The video also critiques Anthropic’s risk disclosures, which emphasize existential threats posed by AI, potentially to create a myth of superintelligence that justifies their sky-high valuation. Comparing Anthropic to established tech giants like Google, Sasha points out that for Anthropic’s $2 trillion valuation to be justified, it would need to generate revenues and profits on a scale currently unimaginable, especially given the competitive AI landscape. The company’s heavy fixed commitments and the likelihood of intense competition further challenge the sustainability of such lofty expectations.
In conclusion, Sasha views Anthropic’s IPO as emblematic of the worst excesses in tech financial reporting, with creative accounting and unrealistic valuations reminiscent of past financial bubbles. The company’s massive losses, opaque cost structures, and reliance on stock-based payments raise serious concerns about its viability. Sasha anticipates more developments in this story and promises to keep viewers informed, underscoring the importance of scrutinizing such high-profile tech IPOs critically.