“This is as good as it looks from the standpoint of the business as currently structured. And now you go through this inflection that makes it much more capex intensive. … I think this was probably their best. And they know this. This is the best time to do it because the future business is going to be very different.”
Prof G Markets · Money & Markets · October 2026
Context
Ed Elson floated a "conspiracy theory" that Anthropic chose to go public at the one moment its operating profitability looks good. Kedrosky agrees: the S-1 signals a shift from renting compute through rivals to building its own, which will make the business far more capital intensive.
Transcript
…to maintain these very expensive facilities. But they're in this Hobbesian choice. They have no choice but to do that because otherwise it's to be reliant on their largest competitors who could, you know, like Microsoft did back in its heyday, you know, cut off their air supply at any moment. So
…wanted to go public now? Is it possible that they wanted to take this one moment in time where the operational, the operating profitability looks pretty good right before it's about to look quite bad? Because that seems like that is what is about to happen. They're at this inflection point. No,
no, no, no, no. Listen, I was arguing that earlier today multiple times with people. So I think that's exactly what's going on. This is as good as it looks from the standpoint of the business as currently structured. And now you go through this inflection that makes it much more capex intensive. So you're essentially changing jockeys and changing the underlying structure of what's happening. And so I think this was probably their best. And they know this. This is the best time to do it because the future business is going to be very different. They're essentially reduplicating AWS, Amazon Web Services, in both directions, building up and building down in terms of both the client customer facing as well as the cloud-facing stuff. It doesn't mean it's impossible. It could work, but it does mean that the way the business is characterized in this current statement is not representative of the future. So
what would it working look like in your view? Well,
I think what have to look like you'd see, for example, one of the statistics they want to tout in the document is the declining compute intensity of token production, that it's been coming down something like it's fallen like 50% or something like that. And so you want to, what the business would…
Final question. This is set to go public. The report of valuation is going to be $2 trillion. There has been some debate as to whether that will actually materialize. Yeah,
More from Prof G Markets
