$80B Loss, Nasdaq Slide, and the Casino Wants More

Anthropic disclosed a net loss of $80 billion for the first half of the year in its IPO prospectus on Monday. Eighty billion. Alongside it came hundreds of billions of dollars in compute commitments and more than 90 pages of risk factors. The company is still pushing toward a potentially record-setting initial public offering in the coming weeks, and it didn't immediately respond to a request for comment.

Who Has the Power

The week's timing couldn't have been worse for the people selling the dream. Microsoft, Google and Amazon, partners of Anthropic and, in the base article's words, "among its biggest investors," reported quarterly results that fed existing market jitters around the AI buildout. The Nasdaq Composite posted its first three-week losing streak since March after plunging 2.9% on Friday. Intel issued a weak forecast, and its stock saw its steepest drop since the 1970s.

The circle is tight. Anthropic gets much of its capacity from Amazon, Google and SpaceX. Those same hyperscalers invest in it. Fears are also mounting over neoclouds like CoreWeave and Nebius, which face rising borrowing costs and a dearth of lenders as they pursue aggressive AI buildouts. Anthropic leans on those neoclouds too, "as it races to expand as quickly as possible."

The numbers behind the racing are staggering. Microsoft trimmed its capex forecast to $170 billion from $175 billion. Alphabet held its guidance at up to $205 billion. Amazon reiterated roughly $220 billion. Amazon reported negative free cash flow for the second consecutive quarter, an outflow of $42.4 billion over the trailing 12 months. Google reported negative free cash flow of $9.1 billion, and its stock fell almost 13% on Thursday, its worst day ever. Microsoft's free cash flow of $18.6 billion was down significantly for a second straight quarter, and it announced plans Thursday to raise $25 billion in bonds. Oracle said it will cap additional fundraising at $20 billion in the coming years.

What They're Calling "Order"

The sages of the market are offering their reassurances. Daniel Newman, CEO at Futurum Group, told CNBC: "Everybody's still full steam ahead on AI, but all the things around it took an interesting turn this week." The hyperscalers' results, he said, "raised eyebrows" and created "more doubt on capital structure." Even David Hsu, a professor at the University of Pennsylvania Wharton School, wondered aloud: "It's a great technology, seems to do things that we never would have imagined, but how does that then translate into a viable business?"

Newman also pointed to the pull of the prospectus: 1,300% annual sales growth, 900% net revenue retention and an implied gross margin of 85%. "Anthropic is the IPO market at this point," he said. The market has largely been frozen since SpaceX's record offering in June, about four months ago. Oura, Firmus and Solidigm have all postponed or abandoned IPO plans. Nscale and SB Energy haven't updated their filings in weeks. Newman said the fear of missing out on a potentially "generational" company is real, and that other firms would be "extremely cautious, if not just foolish" to come out now.

Who Gets Crushed

Nothing in the base article says what happens to ordinary people if the bet goes bad, and nothing says who is on the hook for debt that neoclouds can't refinance. What it does show is a handful of firms borrowing against each other, investing in each other, and selling each other's stock to the public. The risk factors run 90 pages. The public gets to read them after the money has been committed.

The frozen IPO market tells its own story. When the same few giants fund, supply, and invest in one another, the exit door is the public. Retail buyers are invited in when the insiders are ready to cash out. Investors are still waiting on third-quarter financials, and the offering is meant to go ahead in the coming weeks anyway.