The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Karen Kwok

NEW YORK, May 27 (Reuters Breakingviews) - Anthropic's explosive growth shows how quickly demand for a large language model can materialize. Inferring that this booming popularity is durable would be dangerous, especially amid early signs of corporate AI fatigue.

The company behind robotic programming tool Claude Code, led by Dario Amodei, generated $4.8 billion of revenue in the three months to March. It expects to roughly double this in the June quarter to $10.9 billion. More strikingly, Anthropic expects to post $559 million of adjusted operating profit, its first profitable quarter on that basis. That figure includes the full cost of training new models, though it excludes stock-based compensation.

Running chip-stuffed servers to train and run chatbots is so immensely expensive that many more years of cash burn are still expected. Just look at Elon Musk's xAI, now legible through public filings as parent SpaceX heads towards a listing. Its research and development spending, which includes training costs, hit $2.4 billion in the first quarter, roughly triple its $818 million of revenue.

Anthropic’s accounting may not be directly comparable. Industry definitions of run-rate revenue can be slippery, and the company’s top line doesn’t adjust for a cut owed to distribution partners. Arch-rival OpenAI, by contrast, reports its figures net of revenue shared with its main partner, Microsoft MSFT.O. Boss Sam Altman’s claim of $5.7 billion of first-quarter sales is therefore quite different from Amodei’s.

Investors are left with an awkwardly incomplete picture. AI demand is exploding, but big corporate customers are still in experimentation mode. For every Block XYZ.N, which justified massive layoffs with talk of a chatbot-fueled productivity boom, there is an Uber, where Chief Technology Officer Praveen Neppalli Naga said the ride-hailing company had burned through its full-year AI budget by April. Even Microsoft is pulling back on Claude Code as token costs scale faster than budgets, the Verge reported.

As such, conservatively annualize Anthropic’s revenue based on the entire first half of the year, rather than just its bumper second quarter, and it comes to about $31 billion. A mooted $900 billion valuation is nearly 30 times that figure.

Sure, it’s sober next to SpaceX’s eye-popping IPO aspirations. Look instead at Palantir PLTR.O. The AI-powered defense darling trades at about 41 times revenue, but it also sports operating margins near 60%. Anthropic's expected margin in the June quarter is just 5%. It may not even hang onto this much in the near-term as costs relentlessly rise. These valuation games still look hallucinatory.

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CONTEXT NEWS

Anthropic estimates it will generate a positive operating profit of $559 million in the second quarter, the Wall Street Journal reported on May 20.

The startup behind Claude Code apprised investors that its sales for the three months ending in June could reach at least $10.9 billion, more than double its $4.8 ⁠billion in revenue for the just-ended March quarter.