There is considerable mystery surrounding the finances of major AI labs, but as Anthropic inches toward its IPO, some answers are beginning to emerge. In particular, the company is finally disclosing more about the economics of compute—and how much of Anthropic's skyrocketing revenue is being consumed by compute costs.
Compute Margins Are Getting Worse, Not Better
Examining compute margins makes the picture even less encouraging. In the new quarter, compute accounted for 58% of the company's revenue, up from 48% in the prior quarter. At a moment when the company could win over IPO investors by demonstrating improving margins, they are instead deteriorating.
A chart in the filing illustrates this more clearly, tracking the company's revenue for every dollar spent on compute. Since the start of 2025, that ratio had been growing steadily, peaking at just over 2x this past quarter before falling back to 1.72x.
Short-Term Deals Drove the Squeeze
Many indications suggest this shift in compute margins is more of a blip than a long-term problem, but it still reveals important dynamics about the business of running a major lab. In an effort to keep pace with demand, Anthropic's compute bill shot up to $10 billion for the quarter—including, as the filing notes, "$5.0 billion of compute under short-term commitments, which currently costs significantly more than comparable compute procured under our multi-year commitments." In short, demand was growing so fast that Anthropic had to scramble for compute, which meant paying higher rates.
Some of those deals have already played out in public. Anthropic has been paying SpaceX $1.25 billion per month for compute, alongside multi-billion-dollar deals with Nscale, Akamai, and Volta. In industry parlance, these are neoclouds rather than hyperscalers—smaller outfits that offer more flexible compute deals at higher rates.
Anthropic's margins worsened in Q3 because of deals like these, and there is no sign the company will be able to do without them anytime soon. As the new filing puts it: "We expect compute and infrastructure expenses to increase in absolute dollars and remain our largest operating expense for the foreseeable future as additional committed compute becomes available to us under multi-year arrangements with CSPs, and as we continue to invest in additional compute."
Efforts to Bring Costs Down
Anthropic is still trying to lower its compute costs. In particular, the company discusses at length its efforts to build its own compute base under [a partnership arrangement]...
via TechCrunch AI