Anthropic's IPO plans face a harder market after its partners reported quarterly results. Microsoft, Google and Amazon all reported results that added to investor concern about spending on AI infrastructure, according to CNBC.
In its prospectus, Anthropic disclosed a net loss of $80 billion for the first half of the year, hundreds of billions of dollars in compute commitments, and more than 90 pages of risk factors. Investors are still waiting for its third-quarter financials.
Daniel Newman, CEO at Futurum Group, told CNBC that the hyperscalers' results "raised eyebrows" and added "more doubt on capital structure." David Hsu, a professor at the Wharton School, asked in an interview how the technology "translates into a viable business."
CNBC reported that the Nasdaq Composite fell 2.9% on Friday, its first three-week losing streak since March. Intel issued a weak forecast, and its stock posted its steepest drop since the 1970s.
Cash flow is a concern. CNBC reported that Amazon recorded negative free cash flow of $42.4 billion for the trailing 12 months, and Google reported negative free cash flow of $9.1 billion. Microsoft said it would raise $25 billion in bonds. Microsoft, Google and Amazon all reported cloud growth above analysts' estimates. Oracle said it would limit additional fundraising to $20 billion in the coming years.
Newman said the fear of missing out on a potentially "generational" company is real, and called the prospectus "very impressive," citing 1,300% annual sales growth, 900% net revenue retention and an implied gross margin of 85%. Anthropic did not immediately respond to a request for comment.