The Week in Breakingviews: Myopia in Anthropia
BREAKINGVIEWS-The Week in Breakingviews: Myopia in Anthropia The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Peter Thal Larsen
LONDON, Oct 31 (Reuters Breakingviews) - Welcome back! It’s been a week of electoral upsets, giant M&A deals, and an increasingly frantic scramble for AI capital. Our columnists do their best to stay focused on the big picture, but at times like these it can be tricky. What are we missing? Email me. (If this newsletter was forwarded to you, sign up here to get it in your inbox every weekend.)
OPENING LINE
“For central bankers, setting interest-rate policy is usually the most consequential part of the job. Yet for whoever replaces outgoing European Central Bank President Christine Lagarde, that may not be the case.”
Read more: Next ECB chief matters more for France than rates
FIVE THINGS I LEARNED FROM BREAKINGVIEWS THIS WEEK
French banks on average hold just 2% of their assets in domestic government bonds. (Protection from a debt crisis)
Memory chip makers need at least 15% of the market to be viable. (China’s CXMT is getting there)
The Appalachian region produced nearly a third of all US natural gas in 2025. (Plenty for data centres)
Britain’s budget increased borrowing by an average of just 0.02% of GDP a year. (Neoliberalism survives for now)
Instacart’s founder conceived of the grocery delivery service after opening a cupboard that was bare except for a bottle of Sriracha. (Impulse purchase for DoorDash)
HOUSE OF CLAUDE
What business model supports artificial intelligence? That straightforward question is often drowned out by claims the technology will wipe out humanity, and by tech giants scrambling for capital to feed their thinking machines. Even so, you might expect a six-year-old company seeking a stock market listing at a valuation north of $1.5 trillion to address the topic. Yet the more than 300 pages of disclosure published by Anthropic this week provide only the vaguest answers.
The filing with the US Securities and Exchange Commission is emphatic about AI’s world-changing potential. The company founded by Dario Amodei and his partners presents itself as a kind of benevolent steward, aiming to “realize the benefits while navigating and preventing the risks that come with a technological revolution this powerful.”
Making money seems a secondary consideration: a prospective investor has to scroll through pages about AI’s promise and Anthropic’s philosophy before arriving at any meaningful numbers. Even then, there are few clues about what the 5,300-employee company wants to be when it grows up.
There are benefits to being modest. Anthropic is the inverse of SpaceX SPCX.O, which launched its listing earlier this year claiming a total addressable market of $28.5 trillion, or about a fifth of global GDP. And filings are by definition backward-looking. When Amazon.com presented itself as “the leading online retailer of books” in 1997 there was no hint the company founded by Jeff Bezos would morph into an e-commerce and cloud computing juggernaut. Google’s stated purpose of “instantly delivering information on any topic” in 2004 was more ambitious but still far short of what it does now.
Yet Anthropic’s financial needs are anything but modest. Its filing reveals leases and purchase commitments for computing power worth $800 billion. The company has oodles of cash – it earned $1.1 billion in interest in the first half of the year – but meeting future obligations while earning a return for investors will require many, many more customers. To keep spending on computing grunt steady at 55% of revenue, as in the first six months of 2026, Anthropic will need to generate sales of $177 billion next year, Karen Kwok calculates. That’s roughly 11 times what it brought in between December and June.
AI boosters will argue such short-term calculations fail to capture the financial power of potentially world-changing technology. And as Robyn Mak points out, Anthropic’s Chinese rivals are puny by comparison. Yet the company’s filing also contains some counterintuitive trends. Stephen Gandel observes that Anthropic’s spending on human AI researchers is rising as a proportion of revenue – not what you would expect from what is supposed to be job-killing technology.
The ultimate question for investors, though, is whether Anthropic has a defensible business – what money managers describe as a “moat”. The IPO filing does not answer that. Indeed, one possibility is that AI’s capacity for copying software will render even Anthropic obsolete. Felix Martin sees parallels with the digital wave that swept over the music business in the early 2000s but ultimately dragged down Napster, the file-sharing startup that started the revolution. As with AI technology itself, it seems anything could happen.
CHART OF THE WEEK
Accounting policies are usually the boring small print that investors skip over in corporate filings. Yet they can have a vast impact on reported financial results. Take the question of what lifespan technology giants attribute to their vast data centre investments. After some tinkering, Alphabet GOOGL.O, Amazon AMZN.O, Meta Platforms META.O and Microsoft MSFT.O spread the cost of graphics chips and other kit over five to six years. But as Jeffrey Goldfarb and Afiq Fitri Alias demonstrate, trimming a single year off that useful life would wipe out $36 billion of combined net income next year. A new Breakingviews calculator lets you assess the impact.
THE WEEK IN PODCASTS
Ask any business leader, financier or policymaker about Europe’s economic prospects and they will reel off a list of problems: ageing workers, high debt, obsolete tech, polarised politics, and so on. But is the gloom excessive? This summer, ING Chief Economist Marieke Blom set herself the challenge of presenting a glass-half-full case for Europe’s economy. Tune in to our conversation on The Big View to see if she succeeds.
Over in the Viewsroom, the team took stock of Sanae Takaichi after the Japanese prime minister’s first year in power. Aimee Donnellan, Jon Sindreu and Hudson Lockett debated whether Takaichi’s $2.3 trillion investment plan will fuel inflation and undermine a virtuous cycle of growth.
PARTING SHOT
Not that long ago, critics of renewable energy argued that solar power was not viable without state subsidies. No longer. Solar panels have become so cheap that they are being installed at great speed and in larger quantities than wind and natural gas capacity. The drawback is that sun power is at times so abundant that it turns wholesale electricity prices negative from California to South Australia. The solution, Rob Cyran argues, is installing more batteries. The real winners, though, are consumers and businesses who benefit from cheaper power.
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(Editing by Aimee Donnellan; Production by Oliver Taslic)
((For previous columns by the author, Reuters customers can click on LARSEN/peter.thal.larsen@thomsonreuters.com))