Anthropic Could Defy the AI Spending Curse: Analysts See Early Profit Signs and Massive Cash Cushion - Apple…
Anthropic’s upcoming IPO is drawing attention to its financial strength. Wall Street analysts point to faster-than-expected profits, rapidly growing business revenue and a large amount of cash. These strengths could help the AI startup handle rising computing costs and growing competition.
D.A. Davidson Says Profits Are Ahead of Expectations
Anthropic may be moving away from the AI industry’s pattern of spending huge amounts of money. Its revenue is growing much faster than its computing costs.
In the first half of the year, its revenue grew by about 1,400%, while its computing costs rose by 300%. Along with $134 billion in cash and early signs of profits, these numbers suggest that the company behind Claude may be better able to turn the AI boom into lasting profits.
D.A. Davidson Managing Director Gil Luria told CNBC on Tuesday that Anthropic’s S-1 filing challenges the idea that the company cannot make a profit or survive financially over the long term.
Luria said Anthropic has raised $141 billion and still has about $134 billion in cash. This means it has used roughly $7 billion while building a business that brings in about $16 billion in revenue each quarter, equal to roughly $70 billion to $75 billion per year at the current rate.
He told CNBC that he expects the company’s third-quarter results to show profits under standard accounting rules (GAAP) and positive cash flow. However, rising computing costs could make its profits uneven in the near future.
Luria said Anthropic’s adjusted operating profit margin had already reached 19% in the second quarter. He expects the company to keep making adjusted profits.
He also warned that OpenAI and models whose weights are openly available are limiting Anthropic’s ability to charge high prices. This is especially true for all but the most advanced and essential tasks.
Still, he pointed to the company’s growing customer base as a sign of progress. Nearly 12,000 customers each spend more than $100,000, and about 1,900 spend more than $1 million.
Wellington Highlights the Shift to Business Customers
Wellington Management Head of Late-Stage Growth Matt Witheiler, who has invested in Anthropic, said the company’s revenue grew by about 1,400% year over year in the first half, while computing costs rose by about 300%.
Witheiler told CNBC on Monday that Anthropic’s move toward business customers was very important to its growth. He highlighted about 12,000 customers spending more than $100,000 each, 1,300 spending more than $1 million and 250 spending more than $10 million.
He believes Anthropic’s main advantage over competitors is its ability to keep its AI models among the best-performing models available.
Bessemer Says Advanced Models Can Coexist With Open-Weight Models
Bessemer Venture Partners partner Byron Deeter said businesses will continue using a mix of the most advanced models, open-source models, models with openly available weights and older models. Their choices will depend on cost and performance.
He told CNBC on Monday that companies will still need the most powerful advanced models for their most important tasks. Anthropic has become Bessemer’s largest investment in the firm’s 116-year history, both in the amount originally invested and in its current value.
Menlo Highlights the Need for Rapid Product Updates
Menlo Ventures partner Matt Murphy said Anthropic operates in a market where its models must keep improving. Customers can quickly switch to other options if those models perform better.
Murphy told CNBC on Monday that 80% of Anthropic’s revenue comes from models released in the previous six months. This shows why the company must develop and release better products quickly.
He said Anthropic has become Menlo’s largest investment and expects it to deliver the biggest return in the firm’s history.
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