Anthropic unveiled its initial public offering prospectus during a challenging week for technology stocks, as several of the company’s key partners reported quarterly results that raised concerns about the artificial intelligence infrastructure buildout. The AI company disclosed a net loss of $80 billion for the first half of the year, along with hundreds of billions of dollars in compute commitments and extensive risk disclosures spanning more than 90 pages.
Microsoft, Google, and Amazon all reported capital expenditure figures or forecasts that fell short of analyst expectations despite strong cloud revenue growth. Microsoft reduced its capex forecast to $170 billion from $175 billion, while Alphabet maintained guidance for up to $205 billion and Amazon reiterated roughly $220 billion. More significantly, both Amazon and Google reported negative free cash flow, raising questions about how tech companies would finance continued AI infrastructure expansion. Amazon recorded a $42.4 billion outflow for the trailing 12-month period, and Google reported negative free cash flow of $9.1 billion. Microsoft maintained positive free cash flow of $18.6 billion but announced plans to raise $25 billion in bonds for infrastructure financing.
The market sentiment reflected broader concerns about the viability of the AI business model. The Nasdaq Composite experienced its first three-week losing streak since March, declining 2.9% on Friday. Nvidia traded lower along with the semiconductor sector following Intel’s weak forecast. Google’s stock fell nearly 13% on Thursday, its worst day ever, while Intel experienced its steepest drop since the 1970s.
Despite the challenging backdrop, analysts noted that AI demand remained robust, with all three hyperscalers reporting cloud growth exceeding estimates. Oracle announced it would limit additional fundraising to $20 billion and target positive cash flow in the second half of next fiscal year, which analysts suggested helped address investor concerns about unlimited funding requirements. Anthropic faces the task of persuading investors to back what many view as a potentially transformational company, even as the broader IPO market remains largely frozen since June.
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