Humanity can't afford not to spend $800B on AI, Anthropic insists

Anthropic's IPO filing dropped on Monday morning, and the prospectus reads like a real estate agent desperately trying to sell a house of cards as an investment property:

The upsides are enormous. There are just a few disclosures you should be aware of. Sure, the foundation is cracked; it's in a flood plain, and you can only really afford it if you land that promotion, but there's a non-zero chance it'll work out eventually, and just look at the views.

Every S1's risk factors read a bit like a doomsday prophecy. Anthropic, like any other company that's going to trade on public markets, has to cover its butt. It doesn't change the fact that the company's success is built on a gamble that its revenues will grow fast enough to keep up with its rampant compute spend, for which its obligations now exceed half a trillion dollars over the next decade or so.

Burn, baby, burn

Going off the S1 filing's numbers, things don't look that bad for the Claudefather at first blush. Revenues in the first half of 2026 outpaced compute and infrastructure costs by nearly 2:1 and operating losses were a relatively paltry $693 million, compared with $2.14 billion in the first half of last year. The company is still burning money, but things are finally headed in the right direction.

Or, they would be if the company's compute spend were forecast to plateau over the next few years. That's very much not the case.

"Our ability to develop, train, improve, and deploy frontier models depends on our access to enormous and increasing quantities of specialized compute," the prospectus reads.

The continued development of Anthropic's models hinges on ever larger quantities of compute. Anthropic hasn't put a firm number on its compute commitments involving large cloud providers, neoclouds, and equipment providers, but the company's obligations over the next few years could be north of $800 billion, depending on how you wrangle the numbers.

According to the S-1, Anthropic entered into new or amended compute and infrastructure agreements after December 31, 2025, carrying roughly $417 billion in future minimum payment obligations. Since June 30, 2026, the company has entered into further new or amended agreements carrying approximately $245 billion in future minimum payment obligations, some of which are subject to contractual conditions.

But if you add up all the contracts listed, the total is even higher.

• Microsoft: "at least $44.9B" - 2026-2033

• Google: "at least $114.5B" - 2026-2033

• TPUs from Google and other providers: "approximately $125B to $150B"- 2028-2031

• Amazon: "at least $110B" - 2026-2036

• SpaceXAI: "up to $120.5B" - 2026-2029

• AMD: "to exceed" $20B - initial tranche starting in 2027

• Nscale: "up to approximately $44.6B" - through 2033

• Lambda: "approximately $41.3B" - through 2034

• Broadcom: "approximately $161.2B" - starting in 2026

That's a total obligation between $782 billion and $807 billion, though some aren't as airtight as others. According to the S1, Anthropic's deals with Microsoft, Google, Amazon, and Broadcom are non-cancellable. In fact, the contracts with Microsoft, Google, and Amazon dictate payment regardless of usage.

Similarly, Anthropic's only way out of its contracts with Nscale and Lambda, which extend through 2033 and 2034 respectively, is if they fail to deliver on their commitments on time or breach them.

Anthropic does have some flexibility with regard to its widely reported collab with Elon Musk's SpaceXAI to lease capacity of its Colossus supercomputer in Memphis. The deal, worth roughly $120 billion through 2029, can be canceled with just 90 days' notice by either party beginning in early 2027. Meanwhile, Anthropic's agreement with AMD is expected to cost more than $20 billion for the initial tranche of compute capacity, provided it procures the full amount, but this can be satisfied by leasing capacity from the likes of Microsoft.

And while the timetable for Anthropic to meet those obligations remains unclear - several fields relevant to this remain blank at this time - it's safe to say the company's growth trajectory will need to be astronomical to keep up with its rampant spending, let alone ever turn a profit.

Compute = revenues, except if it doesn't

This spend is all predicated on the idea that more compute equals better, more desirable models that will grow the customer base and support higher-margin products, which is why the company is telling investors now that it's going to keep signing and amending compute contracts. At this rate, we wouldn't be surprised if the model dev's obligations through 2040 exceeded a trillion dollars before year's end.

Whether Anthropic will ever actually make good on those commitments is another matter entirely. "Our ability to meet the substantial and growing financial obligations of these requirements to secure compute depends on our ability to generate significant revenue growth," the filing reads.

If Anthropic's revenues can't keep up with its compute commitments, it could end up defaulting, which it notes could result in a cascade that takes the entire house of cards down with it.

Anthropic does have some backstops should it run into trouble paying its bills on its own. For example, "we have the ability to issue, if needed, up to $42.0 billion in aggregate principal amount of convertible promissory notes to Broadcom," the company's S1 notes. However, this only applies to Anthropic's commitments to Broadcom.

The company could also turn to equity or debt financing to pay its other debts. But if it can't make revenue targets, the company warns that doing so risks diluting shares and/or taking on additional debt on unfavorable terms.

My friend, my enemy, my patron

Worse, Anthropic's biggest compute providers are not only some of its biggest customers, but also its biggest competitors. We're talking major cloud providers like Google, Amazon, and Microsoft, which are far larger and actually profitable.

This poses a different problem for Anthropic. Cloud providers are convenient because Anthropic doesn't have to pay for the compute up front. But if the company can't get adequate compute from Google, Amazon, or Microsoft because they're using it for training or running their own or someone else's models, they may need to look at alternative options, including building out their own infrastructure.

"We may in the future finance a greater portion of our compute on an up-front basis, including through capital leases, prepayments, debt-financed purchases of equipment, or similar arrangements," the company explained.

In fact, to some degree Anthropic is already doing this through its lease deal with Broadcom. This appears to be tied to Google and Broadcom's collaboration with Anthropic to provide TPU-based compute earlier this year. Meta was also reportedly in talks to deploy Google TPUs in its own datacenters so the arrangement wouldn't be that unusual.

And then of course there are external threats, like conflict in the South China Sea severing supply chains for the vast majority of AI accelerators.

The only way to justify this kind of spend and risk is if you believe the upside is enormous. Like, the biggest economic transformation in the history of humankind.

As Anthropic puts it: "We believe this abundance of AI will rapidly transform every sector of the global economy in ways greater than the impact of industrialization, electricity, semiconductors, and the internet." (R)