Michael Burry Finds a $537 Billion Hole in Anthropic’s IPO Story
Key takeaways
- Anthropic’s IPO filing hides a $537 billion compute commitment load that could strain the company’s revenue growth and liquidity.
- $537 billion total compute commitments
- $114.5 billion to Alphabet
- $110 billion to Amazon
What happened
Michael Burry highlighted a $537 billion total of compute commitments in Anthropic’s IPO filing, a figure that never appears as a single line item. The commitments come from Alphabet ($114.5 billion), Amazon ($110 billion), Microsoft ($44.9 billion), Broadcom ($161.2 billion in TPU rack rent), Neoclouds Lambda and Nscale ($86 billion), AMD ($>20 billion), a pending Google TPU deal ($125–150 billion for 2028‑2031), and a potential SpaceX deal ($120.5 billion). Anthropic’s revenue growth has…
Why it matters
The sheer size of the commitments—over 20 times Anthropic’s trailing 12‑month sales—raises questions about the company’s ability to generate enough revenue to cover the take‑or‑pay contracts. The slowdown in revenue growth and the decline in revenue per dollar of compute suggest that the business may struggle to meet…
Short-term and longer-term
Short-term. Over the next few days, watch for any updates to the S‑1 that clarify the Q3 revenue run‑rate and the status of the pending Google TPU deal.
Longer-term. For investors looking ahead, the large compute commitments suggest that Anthropic may need to raise additional equity or debt to support its operations.
Words on this card
- S‑1
- A registration statement filed with the SEC that companies use to register shares for an IPO
- take‑or‑pay
- A contract that requires the buyer to pay the full amount regardless of actual usage
- convertible notes
- Debt that can be converted into equity at a later date
- TPU
- Tensor Processing Unit, a type of chip designed for machine learning
- run‑rate
- An estimate of future performance based on current data
- Revenue
- Sales — money the company took in before costs.