| ▲ | Maxatar 8 hours ago |
| These commitments aren't annual though, most of them amount to 10 billion a year commitments for 10 years. Put another way Anthropic has committed 52 billion dollar a year to these companies and their S-1 indicates they earn 67.2B a year in revenue. I'm not going to predict whether Anthropic succeeds or fails, just that it's very misleading to claim that Anthropic needs to grow to $500b in revenue without making it clear that it's $500B in revenue per decade rather than $500B in revenue per year which is what most people reading such a number would assume. |
|
| ▲ | dyslexit 6 hours ago | parent | next [-] |
| To be more specific: - 161.2B w/ Broadcom: 2026-2031 - 120.5B w/ SpaceX: 2026-2029 - 114.5B w/ Google: 2026-2033 - 110.0B w/ Amazon: 2026-2036 - 44.9B w/ Microsoft: 2026-2033 - 44.6B w/ Nscale: 2026-2033 - 41.3B w/ Lambda: 2026-2034 which is around $63.7 billion / year if spread over 10 years, but with most of it due earlier than that. |
| |
| ▲ | mirekrusin 14 minutes ago | parent | next [-] | | from what you've written it's more like: - 2026: $97.08B - 2027: $97.08B - 2028: $97.08B - 2029: $97.08B - 2030: $66.96B - 2031: $66.96B - 2032: $40.09B - 2033: $40.09B - 2034: $14.59B - 2035: $10.00B - 2036: $10.00B Total: $637.0B Considering everything that is cancellable, ie. hard commitment only, it's: - 2026: $56.79B - 2027: $56.79B - 2028: $56.79B - 2029: $56.79B - 2030: $56.79B - 2031: $56.79B - 2032: $29.93B - 2033: $29.93B - 2034: $10.00B - 2035: $10.00B - 2036: $10.00B Total: $431B If they go bankrupt, there are some more cancellations available, also from the other side – if some providers don't deliver, it can be lower as well. | | |
| ▲ | dyslexit 3 minutes ago | parent [-] | | That's helpful, but 2026 isn't cancelable, nor is at least half of 2027. Also, I think some of these numbers are off. Only SpaceX is cancelable but the above shows declines for years outside of the SpaceX commitment (assuming it does get cancelled, and in full). I also left out AMD at $20B for 2027, so that would need to jump up. Finally, the above is only counting the commitments they've already made. It's not very likely they'll only spend $10B in 2035. |
| |
| ▲ | smallmancontrov 5 hours ago | parent | prev | next [-] | | Isn't the SpaceX contract cancelable with 90 day notice? How many of the others are too? | | |
| ▲ | dyslexit 5 hours ago | parent | next [-] | | You're right, SpaceX will be cancelable within 90 days after March 2027. SpaceX was the only one mentioned as cancelable. These are listed under "Infrastructure Service Arrangements" on page 170. | |
| ▲ | ethagknight 4 hours ago | parent | prev | next [-] | | all Anthropic contracts are cancelable if the intent is to stick public shareholders with a bag | | |
| ▲ | lumost 4 hours ago | parent | next [-] | | I'd imagine all of the vendors have an incentive to keep their main customer a float, while there might be penalties etc. for missed targets - it doesn't make sense for any of these vendors to ride the contract into chapter 11. | | |
| ▲ | runako 4 hours ago | parent [-] | | This is so important in analyzing these commitments. Anthropic's commitments will make them a Top 10 customer at many of their vendors. (Even at Google/Amazon, how many other customers do they have with $100B+ committed?) Those vendors would very much like to retain as much of that business as possible. If the space goes sideways, I would very much expect some kind of renegotiation/work out. |
| |
| ▲ | Mistletoe 4 hours ago | parent | prev | next [-] | | This is always the intent for all recent IPOs I can remember. | |
| ▲ | 4 hours ago | parent | prev [-] | | [deleted] |
| |
| ▲ | solyin 4 hours ago | parent | prev [-] | | The question is, how're those datacenters build outs coming along? two reasons for Anthropic to cancel those contracts. A) They don't need the capacity because they have capacity elsewhere, or b) they don't need the capacity because no one is using Claude. (I guess c) they don't need the capacity because theyre running Claude more efficiently is also technically possible.) For B to happen, they've got the demand in the form of contracts, and models don't really seem like they're shrinking, though there's a lot of non-public info, Astra > insize than sol, and Opus > insize than a Sonnet. So then we're looking at situation A), and the think to look at is SpaceX has the vertical integration to be able to plonk down datacenters and get them powered with literal jet/rocket engines/turbines that they make from scratch because they're a space rocket company when no on else can. So, personally, I don't think it's that big a risk to SpaceX's revenue. Or rather, is cancelable in 90 days, but smart money is going to see those cancelations coming from a lot longer away, if you're tracking datacenter construction. (Disclaimer, I picked up some SPCX; not financial advice, etc) | | |
| ▲ | wbl an hour ago | parent | next [-] | | SpaceX does not make turbines that can run for tens of hours producing megawatts of power. A turbopump is a different beast. | |
| ▲ | chrisweekly an hour ago | parent | prev [-] | | > "SpaceX has the vertical integration to be able to plonk down datacenters and get them powered with literal jet/rocket engines/turbines that they make from scratch" Is that really a viable path? (Honest question) |
|
| |
| ▲ | nostrademons 5 hours ago | parent | prev | next [-] | | On a side note, these are pretty hefty portions of the total revenue of these companies. 161B with Broadcom over 5 years is about 32B/year; that's fully half of their 2025 revenue. 120B with SpaceX over 3y is 40B a year, more than double their 2025 revenue and almost triple 2024. 114B with Google over 7 years is about 3% of their total revenue and about 1/4 of all Cloud revenue. 110B with Amazon is about 9% of their AWS revenue. If Anthropic's revenue story doesn't materialize and the AI bubble bursts, these companies are in a world of hurt. It's probably not fatal for Google or Amazon but would be a major drag on the stock price (perhaps why Google has dropped from 400 to 315 over the last couple months as the AI story soured), and it could be company-ending for Broadcom or SpaceX if they end up building out infrastructure to service these commitments. I remember before I left Google, one of the TGIF questions (which are now AI syntheses of many peoples' individual opinions) was "What happens if AI is a bubble and it bursts?" His response was "If that happens, the whole industry is in trouble." I see now what he meant. | | |
| ▲ | monegator 4 hours ago | parent | next [-] | | one can truly dream | | | |
| ▲ | demibabs 5 hours ago | parent | prev [-] | | wait what, how is Broadcom worth so much with so little revenue? | | |
| ▲ | nostrademons 4 hours ago | parent | next [-] | | Their current stock price is pricing in these contracts, which have already been announced but have not been fulfilled (or booked as revenue) yet. So Broadcom's 2025 revenue was 63B; note that this is already up almost double from its 2023 revenue of 35B, largely on AI contracts. If Anthropic spends another $32B in 2026, that's in addition to their declared revenue; investors expect they'll be making $100B+ in 2026. Broadcom's operating margins are pretty good, so a lot of this flows through to the shareholders as earnings, and so investors are valuing it on the assumption that these contracts result in tangible cash flow. If the AI companies go tits-up, that introduces counterparty risk, the revenue doesn't materialize as cash, and suddenly their earnings take a nose-dive. If they've staffed up significantly to design and sell these AI accelerators and suddenly there's no market, they could be in a lot of hurt. | |
| ▲ | tancop an hour ago | parent | prev | next [-] | | AI focused investments and patent trolling. | |
| ▲ | herodoturtle 4 hours ago | parent | prev | next [-] | | I'm sure there are others here that are experts on this topic, but my 2 cents on this is that Broadcom specialise in custom / specialised AI chips, and their collaboration with Google to manufacture the TPUs is a pretty solid revenue moat over the next several years. | |
| ▲ | AlphaSite 4 hours ago | parent | prev [-] | | Forward P/E. |
|
| |
| ▲ | Espressosaurus 4 hours ago | parent | prev | next [-] | | If we assume none of it is front-loaded (which seems, uhhhh unlikely) we're looking at ~$100 billion a year for the first 4 years of commitment. That's significant. | |
| ▲ | egeozcan 4 hours ago | parent | prev | next [-] | | https://tinylittleoffice.com/write/#/v1/write/yZVWxTsMwEN39F... Got the numbers on a spreadsheet. Of course this is a super simplistic version assuming equal yearly commitments. | |
| ▲ | cavisne 4 hours ago | parent | prev [-] | | It’s been rumored but this is a pretty huge TPU dependency. Assuming Broadcom + Google is TPU spend. | | |
|
|
| ▲ | trjordan 4 hours ago | parent | prev | next [-] |
| You're right that my numbers are imprecise, but I did mean $500b in revenue annually. This is just the compute, which primarily covers training + inference. They still have to run the rest of the business. If you think AI should look like SaaS and spend 10% of their revenue on compute, that's $1T in revenue. If you think it's a hardware business, that's 30% margins and perhaps $200b in revenue. I went with something in the middle at $500b. They won't disappear as a company at $200b in revenue, but I don't think that's their aspiration. These commitments imply to me that they're confident they can do much better. |
| |
| ▲ | conradkay 34 minutes ago | parent [-] | | > If you think AI should look like SaaS and spend 10% of their revenue on compute, that's $1T in revenue. If you think it's a hardware business, that's 30% margins and perhaps $200b in revenue. I went with something in the middle at $500b. I'd think it's more sound to just look at what percent of their current spend is on compute? Seems to be 50-60% |
|
|
| ▲ | teacpde 7 hours ago | parent | prev | next [-] |
| Thanks for clarifying, that’s a huge difference. Obviously they will have other revenue sources, but will likely make a small portion of their revenue. If we approximate their growth rate by these numbers, it is quite a slowdown. |
|
| ▲ | chairmansteve 3 hours ago | parent | prev | next [-] |
| Good point. Although they also need to make a profit. To justify an eventual PE ratio of 25 and a current valuation of $1 trillion they need to make an annual profit $40 billion. And then lets assume $40 billion in other expenses. So they need revenue of $50 + $40 + $40 = $130 billion revenue annually. But if you buy them today at a $1 trillion valuation, and they only make $40 billion in annual profit, your investment will go nowhere. They need to be growing profits at 20% per annum to justify a PE OF 25. And then you have the competition problem. The cheap open weight models are good enough for many (most?) tasks. And then you have the problem that LLMs may not be that useful outside of programming, customer support and law (and doing homework). |
|
| ▲ | stymaar 4 hours ago | parent | prev | next [-] |
| > Put another way Anthropic has committed 52 billion dollar a year Idk where you got this figure from, but the actual figure are very different from that: It's 120B over four years for SpaceX alone and 120B for Broadcom over 6 years. These two players, representing less than half of the total commitment, already give you an annual commitment above 50B. |
|
| ▲ | redanddead 7 hours ago | parent | prev | next [-] |
| 500B in a decade is really a lot |
| |
| ▲ | kmac_ 5 hours ago | parent [-] | | Yeah, it's a crazy number, but they got the AI business right, just like Google got internet marketing right 25 years ago, as long as they keep the momentum (and prices). | | |
| ▲ | kinnth 5 hours ago | parent [-] | | Isn't the issue tho, that google launched at i dunno a 1bn market cap and grew as the internet grew. what you're buying into here is a company that is already large on the idea of growth over the next 10 years. Modern IPO's just reek of investors cashing out | | |
| ▲ | JumpCrisscross 5 hours ago | parent | next [-] | | > google launched at i dunno a 1bn market cap and grew as the internet grew Google closed its first trading day "worth more than $25 billion" [1] with $1.5bn revenues, up 234% from 2002's $440mm [2]. That's a 16x revenue multiple, 0.07 growth adjusted [3]. On a similar revenue multiple, Anthropic's $16.3bn half-year earnings are worth $543 billion. Adjust for Anthropic's 1,400% YoY growth and you're well over $3 trillion. Obviously, it's a lot harder to grow at a thousand percent from a $16bn baseline versus a few billion. But purely on a multiple basis, Anthropic is in a similar ballpark as Google. [1] https://www.nytimes.com/2004/08/19/technology/shares-of-goog... [2] https://www.sec.gov/Archives/edgar/data/1288776/000119312504... [3] https://www.investopedia.com/terms/p/pegratio.asp | | |
| ▲ | extraextra 4 hours ago | parent | next [-] | | If only it was that simple, to switch multiples around between random companies and come up with valuations Google was profitable, free cash flow positive and had no debts basically Anthropic is burning money by the millisecond, no profits, free cash flow negative and has lots of debts & commitments | | |
| ▲ | ygghutttff 22 minutes ago | parent [-] | | Correct does that poster actually know what comparables are? Comparables are not by peer group or sector. It’s cash flows, growth and risk bud. If you want to do peer group - go ahead - just don’t forget to control for differences.. Price to sales multiples are internally inconsistent by definition. |
| |
| ▲ | runako 4 hours ago | parent | prev [-] | | As another check, SpaceX is trading at ~62x sales with a growth rate in the 30% range. Assigning the same sales multiple puts Anthropic at ~$2T market cap. Add in a factor for much faster growth (and non-GAAP profitability) and $3T is a really easy place to end up. | | |
| ▲ | extraextra 3 hours ago | parent [-] | | Sure, you can throw any numbers around, if you wish to get any valuation you want. In reality, a valuation based on revenue (sales) is bonkers to begin with, but even worse when you consider that Anthropic has so much debt that it doesn't have positive equity value, it's in a deficit ("When liabilities attached to an asset exceed its value, the difference is called a deficit and the asset is informally said to be "underwater" or "upside-down""). At least SpaceX has more assets than liabilities. | | |
| ▲ | runako 3 hours ago | parent [-] | | There are a set of mistakes in what you wrote, but > SpaceX has more assets than liabilities. is definitely a choice thing to write on the day SpaceX announced a $40B debt deal to purchase compute to run other companies' models. Based on available information, this will put SpaceX into a place where it has more liabilities than assets. | | |
| ▲ | extraextra 3 hours ago | parent [-] | | Lol You're speculating what SpaceX balance sheet might be, like they haven't just released MRQ earnings report last week Just go read it and you'll see you're wrong even after you subtract that 40 billion SPV
https://www.sec.gov/Archives/edgar/data/1181412/000162828026... | | |
| ▲ | runako 3 hours ago | parent [-] | | Fair, I misread the filing. Larger point stands. SpaceX is commanding a 62x sales multiple, whether or not you personally believe price:sales should be relevant. SpaceX's AI operation is smaller and growing slower than Anthropic's. It's reasonable to expect investors to benchmark Anthropic against SpaceX, it would be silly not to do so. A normal thing one would expect investors to do is assign a higher multiple to a company that grows faster. | | |
| ▲ | qwytw an hour ago | parent | next [-] | | But the question is not so much if they can IPO at those prices but rather if the valuations are sustainable over a couple of years. If they are priced to perfection there isn't much left for public investors besides huge risk that something might not work out 100% as expected. | |
| ▲ | extraextra 2 hours ago | parent | prev | next [-] | | Larger point doesn't stand, price/sales is as useful of a metric like measuring speed as mass/distance. "Yes, my speed is 100kg/10 meters". Some people will benchmark Anthropic vs. SpaceX, that doesn't make it a smart approach. A normal thing is to consider risk, liabilities, cashflow, how diversified revenue streams are etc., and other things which you seem to be missing. I'm not trying to dissuade you from buying it. I'm just saying that the reasons you give are wrong. | | |
| ▲ | runako an hour ago | parent [-] | | > Some people will benchmark Anthropic vs. SpaceX, that doesn't make it a smart approach. Yeah, I would not pay 62x sales for SpaceX. And I don't buy IPOs. I'm not endorsing these values, I am saying benchmarking against peers is what investors commonly do. > A normal thing is to consider risk, liabilities, cashflow, how diversified revenue streams are etc., and other things which you seem to be missing. I'm not missing those things, I am not including them here because being "right" is rarely how markets value companies. (Also because the rest of that stuff is in the S-1.) It's possible to build a "correct" model of a high-growth high-tech company that looks primarily at risk, liabilities, cashflow, and diversity of revenue streams. That model might put Anthropic at (say) a $100B valuation. That "correct" model is going to be less predictive than a model that starts from what similar firms are trading at in public markets. I personally am more interested in predictive power than correctness when evaluating stocks. |
| |
| ▲ | an hour ago | parent | prev [-] | | [deleted] |
|
|
|
|
|
| |
| ▲ | lotsofpulp an hour ago | parent | prev [-] | | >Modern IPO's just reek of investors cashing out 99.9999% of the time someone sells something, the goal is to obtain cash. Throughout all of human history. |
|
|
|
|
| ▲ | gigatexal 5 hours ago | parent | prev [-] |
| > Put another way Anthropic has committed 52 billion dollar a year to these companies and their S-1 indicates they earn 67.2B a year in revenue. A very large part of that revenue is paying for inference. There’s not enough leftover for the committed outlays. So it has to come from smucks I mean investors. |
| |
| ▲ | mmiyer 4 hours ago | parent [-] | | These commitments are in large part the paying for inference.. |
|
