Recent financial disclosures from Anthropic, particularly its amended S-1 filing, have drawn attention to the company’s significant reliance on a few key technology suppliers, most notably Broadcom. The data suggests that while Anthropic’s revenue is growing, its operational costs are escalating, raising questions about the future stability of its growth plans and the financial stability of its major partners.
Anthropic’s Recent Financial Performance
Anthropic’s filing indicates a substantial increase in revenue for the third quarter. The company reported $16.96 billion in third-quarter revenue, marking an increase of approximately 47% compared to the second quarter. However, the growth rate was uneven across cost centers.
While revenue climbed, the associated expenses for computing power and infrastructure saw a notable rise, increasing by about 78% over the same three-month period. This reversal in the cost-to-revenue growth pattern is a key concern. Furthermore, the company faces large upcoming expenditure demands, anticipating $448 billion in such costs by the end of 2030, with a significant portion of these commitments maturing within the next four years.
Broadcom’s Central Role and Market Concerns
Anthropic has disclosed total purchase and lease commitments for computing power amounting to $895 billion. According to an analysis of the filing, Broadcom accounts for the largest share of these commitments, totaling $161 billion. Alphabet’s Google follows with a commitment of $121 billion, and Amazon maintains a commitment of at least $110 billion.
Industry expert Jason Lemkin pointed out that Anthropic experienced a decline in net new revenue bookings during the third quarter, despite the company having made $895 billion in total commitments. Lemkin stated, “Anthropic had a down quarter from net new revenue. It was down in this last quarter in terms of net new bookings over Q2.”
The dependency of Broadcom on Anthropic is substantial. Management anticipates that the AI chip revenue for Broadcom will nearly double from $58 billion in fiscal 2026 to approximately $115 billion in fiscal 2027, and then double again to $230 billion in fiscal 2028. Anthropic alone is expected to require 5 gigawatts of capacity in 2027 and 10 gigawatts in 2028, which represents half of the roughly 30 gigawatts Broadcom projects for those two years.
Beyond projected revenue, Broadcom also acts as a financial guarantor for Anthropic’s technology. The company guarantees up to roughly $29 billion from the first financing tranche and faces a potential liability of about $43 billion from a second package. Lemkin described Broadcom guaranteeing Anthropic’s debt as “a little wobbly.”
Market Reaction and Future Outlook
The market has reacted to this concentration of risk. Broadcom currently trades at a forward Price-to-Earnings (P/E) ratio of 19x, which is considerably lower than its five-year average of 24x and significantly below its peak of 49x reached in December of the previous year. This discount makes sense, according to some analysts, given the company’s heightened exposure to Anthropic’s success.
While Google and Amazon also represent large commitments, neither company guarantees the financing for its own sales as Broadcom does. Nevertheless, the connection remains complex; for instance, a portion of Google’s commitment flows back to Broadcom, and Alphabet’s TPU and networking supply agreement with Broadcom extends through 2031.
The potential for Anthropic to go public could significantly alter the risk landscape. If the IPO proceeds, the resulting capital would reduce the likelihood that Broadcom’s guarantees would be necessary. This uncertainty surrounding the IPO, especially amidst market corrections, has dampened investor confidence.
Gary Marcus, a cognitive scientist and long-time AI critic, commented on the situation via X, noting that given the scale of the commitments and the current market correction, “Anthropic’s IPO is surely somewhat threatened, and $2T as a valuation is probably off the table.”
Investors are advised to monitor Broadcom’s upcoming fiscal fourth-quarter results, scheduled for December 9, as management’s guidance regarding the fiscal 2027 AI outlook will be crucial in determining whether Anthropic’s demand remains robust.
