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I’ve had countless people on this app argue with me that Anthropic has a $65BN ARR. Here’s a quick lesson on the discrepancy between venture capital power point math and real accounting math. OPEN AI IS MINUS $20BN AND THEY ARE NOT YET PCOAB AUDITED. Privately, I made a bet with several people on this app, payable in pushups, that Anthropic would see a $20BN revenue write down. Remember the difference, OpenAI is not PC audited (yet) and Anthropic is, their 2026 numbers won’t be reported until April-ish in 2027. The fact that Open AI voluntarily abandoned fake venture math power point accounting for some real accounting means they are getting ahead of it and Sam Altman is an operator. This is bite one. A PC audit will drive them down further. Maybe as much as $10BN more. No, Oracle and NVIDIA coupons are not revenue. No, they are not arms length transactions. Where Anthropic reports $65BN run rate for 2026, I expect it to be $45BN or less. If I’m right, the other guys do 100 pushups. If I’m wrong, I do 100 pushups. There’s also something important to learn about companies spending at Anthropic - a lot of this is one time CAPEX. Reports have come out about how Facebook and Microsoft used Claude to build their product (in essence, vibe coding), but now the competing products are built and the spend is getting pulled. That’s either a one time CAPEX or an R&D expense. Don’t get me wrong, Anthropic has built incredible technology, so good that their competition uses it. No one that relies on Anthropic will direct the same level of spend towards them in the future. Use Anthropic to build your tech, then pivot to a lower cost open source model to run the technology. I know multiple founders that are getting $20k /month in value from Anthropic for $1k/month, subsidized by Anthropic investors. They are racing to build their product before Anthropic hikes prices. Do you think they are ever coming back as customers once their product is built and they have to pay $20k / month? Not a chance. So where does this all land? Anthropic will have a large IPO (not $2TN) and will be the premier frontier AI model. The market will have to adjust their pricing on the stock to account for a significant portion of Anthropic’s revenue to be one time spend in lieu of ARR. Open AI will watch carefully and fix what they can ahead of their own IPO. Debt providers and long term contract holders of the AI data centers will have to restructure because they can’t afford for either company to fail. For me to buy the Anthropic stock directly, I’m going to need to see that 2026 PCAOB audit first. Frontier models will be unprofitable for a long-long time. The only people that turn a profit in this whole thing are the contractors and developers who built the data centers. H/t: @RobertMSterling

MatthewChang ↗