Anthropic told investors its third-quarter revenue rose to $16.8bn, with the company reporting adjusted profitability as it prepares for a potential November IPO.
Anthropic told investors that its third-quarter revenue jumped to $16.8bn, according to the Financial Times. The figure represents a 50 per cent increase from the previous quarter, when revenue stood at $11.5bn. The company stated it was profitable on an adjusted basis for the second consecutive quarter.
The revenue growth marks a slowdown from earlier in the year, when Anthropic’s revenue more than doubled between the first and second quarters, rising from around $4.8bn in the first three months of the year. Despite the slower pace compared to previous quarters, the company reported positive cash flow in the third quarter.
According to people with knowledge of the matter, Anthropic is banking $1.70 in revenue for every $1 spent on computing power. The company said its operating margins were 11 per cent. Chips and data centres remain the company’s biggest expense, essential for training and running its AI models.
The start-up, valued at $965bn, gathered investors in San Francisco on Wednesday for presentations ahead of an initial public offering expected in November. The listing is widely expected to be the most highly valued IPO of all time. While the Financial Times reports the current valuation at $965bn, other reports indicate the company is targeting a valuation of more than $2 trillion.
Channel NewsAsia reported that Anthropic is expected to go public before its competitor OpenAI, though its debut could be postponed until after the U.S. midterm elections in November. Anthropic has committed to future spending of hundreds of billions of dollars under long-term agreements for cloud services and infrastructure.
Anthropic has warned investors that its technology could pose “existential risks to humanity.” In an early iteration of its S-1 filing, almost a third of the document was devoted to “risk factors,” including the possibility of AI models showing unpredictable and malicious behaviours. The company devoted a large portion of its investor presentation to explaining its safety philosophy.
The company’s research showed that AI agents in a test environment could disclose sensitive information and sabotage code. However, Anthropic said it had seen no signs of such behavior in real-world applications. Investors remain concerned about how to value the company amid these risks and growing competition from OpenAI and Meta.
Anthropic’s financial results serve as a crucial gauge for the broader AI sector, reflecting the ability of major labs to sustain growth while managing massive infrastructure costs. The company’s profitability and revenue trajectory will influence investor sentiment ahead of a potentially record-breaking IPO, while its safety disclosures highlight the regulatory and reputational risks facing the industry.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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