Anthropic's $100 billion financing gamble - Yahoo Finance
By Google News AI ·
In The Loop Host Ejaaz Ahamadeen takes a closer look at Anthropic's (ANTH.PVT) third quarter operating loss, comparing this figure to how other hyperscalers are financing their AI build-outs.
From the bullish side of things, you could argue that yes, Anthropic made an operating loss, but it was because they had so much demand that they had to pay out of pocket for more expensive ingredients if you want to use my restaurant analogy earlier. The bare case is, Anthropic didn't even have a cushion or figure out a way to kind of satiate this demand or anticipate this demand, and that might end up with them blowing up. And like listen, this is a high-stakes game that Anthropic is playing.
They don't have alternative revenue earnings from any other parts of a business. They are an AI focused company and they are betting the entire house on it. If you compare them to Google, meta, Microsoft, they have more flexibility. Google has search revenue, which I know is going down slightly, but they are making billions of dollars from that. And they have so many other product lines. You've got meta with the same scenario as well.
And so they should be able to kind of keep this expense float. Anthropic does not have the same sort of flexibility, neither does Open AI. And the other thing I want to tag on to that is market sentiment is probably at its lowest that it's been since this entire AI hype started, I don't know, a few years ago. So the idea here is, have we reached the breaking point where no matter how much good news a company can sort of surface, it's still going to be bearish from a public investment side of things.
At the end of the day, Anthropic needs to raise $100 billion in a roughly around two weeks. Will they be able to do it in the light of their second biggest…
Originally published by Google News AI