Anthropic’s second-quarter revenue rose from $787 million a year earlier to $11.56 billion. It also reported more than $80 billion in losses in the first half of the year.
The growth is striking. So is the cost behind it.
Anthropic’s Growth Comes With Huge Losses
Anthropic reported $974 million in operating income for the second quarter, after five quarters of operating losses. At the end of June, it held almost $132 billion in cash, equivalents, and short-term investments.
That profitable operating quarter matters, but it does not erase the first-half losses.
Anthropic is moving toward an IPO that could be the largest initial stock offering in history. Investors are weighing a potential value in the trillions. One report warned that a weak debut could delay OpenAI’s offering and prompt investors to rethink OpenAI’s valuation.
Close to half of Anthropic’s revenue comes from Claude sales through the cloud divisions of Microsoft, Amazon, and Alphabet. All three have invested in the company. Anthropic also named OpenAI, Google, and open-weight and open-source models as competitors.
Lower-cost models are part of that pressure. Snowflake’s CEO said his company is testing open-weight models at lower cost, while crediting Anthropic and OpenAI with pushing AI forward.
AI Companies Are Finding Ways to Fund the Spending
Microsoft said it is offering voluntary buyouts to about 60,000 employees, more than a quarter of its global workforce. Its stated aim is to contain costs and help fund AI investment.
The reported commitments around Anthropic are also large. One commentator said Anthropic agreed to spend up to $120.5 billion on SpaceX AI compute. A separate account citing Bloomberg described a $63 billion arrangement to finance Broadcom chips for Anthropic.
Under that reported arrangement, an investor-funded vehicle would buy the chips and lease them to Anthropic. Broadcom would guarantee some of their future value.
Meta has its own funding plans. One commentator put its launched equity offerings at about $35 billion, its planned share-sale program at roughly $60 billion, and expected spending on long-term assets this year at $135 billion to $145 billion.
Another commentator warned that the share sales could significantly dilute owners if debt markets remain shut. He expects more issuance and claims Meta would need $600 billion more after this round to reach its goal. That is his warning, not an established funding requirement.
Demand Is Still the Question
Memory chipmakers are expected to address fears this week that AI spending is getting ahead of future demand. That concern runs through these funding plans: companies are finding ways to pay for more AI, while future demand remains uncertain.
One commentator remains bullish on the AI trade. He points to limited memory supply, productivity gains from AI, and heavy shorting of technology stocks. He also argues that tighter funding could bring more discipline to AI spending.
His funds had a weaker week than the benchmarks he cited. Granny Shots fell 4.27%, versus a 2% decline in the S&P 500. Granny J fell 10%, versus a 2% decline in the Russell 2500.
A separate commentator argues that Broadcom’s revenue growth has outpaced its stock price, making its valuation less demanding. The comparison came without the underlying revenue or share-price figures, so it remains that commentator’s claim.
Meta’s new personal AI agent, Muse, offers another look at how AI might bring in revenue. Meta says it can book appointments, fill out forms, and monitor home security feeds. Its paid plans cost $20 or $100 a month, depending on usage.
Meta says Muse runs in an isolated environment, cannot see passwords or payment details, and asks before sensitive actions. Users must opt out if they do not want their interactions used to train Meta’s models. Meta says it will remove critical identifying information from interactions it uses.
Meta is also exploring a share of shopping transactions made through agents, but has no settled plan. For now, the monthly plans are Muse’s clear price.
Rates, Brazil, and Other Investor Risks
The Fed, European Central Bank, and Bank of Japan are due to make decisions this week. A market roundup put the odds of a Fed hold at about 90%, with the current rate at 3.75% to 4.00%. It reported September inflation at 3.7% from a year earlier and Brent oil near $115 to $116. Thursday’s PCE inflation report and third-quarter GDP figures are also due.
In Brazil, the Financial Times said stocks and the currency were set to tumble after Luiz Inácio Lula da Silva’s election win as investors worried about the country’s finances. A market roundup later reported a roughly 14% stock plunge and a weaker real.
A separate commentator sees the win as important for Brazil’s ties with BRICS and China. He says a proposed BRICS reserve currency is not moving forward in the short term because India opposes it, while member countries have been trading in local currencies. He also points to Brazil’s oil and rare earth resources as part of the stakes in its foreign relationships.
Elsewhere, Hermès shares are down more than 50% from their peak a year and a half ago, while sales are growing 6%. One commentator still calls the stock expensive at a P/E of 30, citing slower sales growth and a mixed outlook alongside its brand strength and pricing power.
One commentator said the bottom 20 stocks make up 0.2% of a market-cap-weighted S&P 500 index, compared with 4% of an equal-weighted one. He thinks equal weighting would offer only limited protection if the AI portion of the market is in a bubble.
Fidelity said the average 401(k) balance rose 10.5% from March through June. Participants in their 30s averaged $75,200; those in their 40s averaged $156,800.
A commentator’s borrowing example shows another risk. $10,000 in cash plus a $10,000 broker loan buys $20,000 of investments. After a 50% fall, those investments are worth only the amount owed to the broker. A falling investment can become a forced sale.