Ahead of planned IPO, AI startup Anthropic tells investors it expects a profitable second consecutive quarter

Artificial intelligence (AI) startup Anthropic has informed its investors that it expects to be profitable this quarter, as it seeks to ease investor concerns over the heavy spending and cash burn associated with leading AI companies.

Anthropic signals stronger financial position

The company informed a small group of shareholders that its adjusted operating income will be positive for the second consecutive quarter, the Financial Times reported, citing several people familiar with the matter. The calculation excludes expenses such as stock-based compensation. This comes at a time when Anthropic is preparing for a massive initial public offering (IPO).

According to two people familiar with the matter, Anthropic’s gross margins exceed 80 per cent before factoring in revenue-sharing arrangements with distribution partners such as Amazon and the expenses involved in training its AI models.

In the second quarter, the AI startup, which follows a financial cycle from January to December, reported an adjusted profit after its revenue surged 14 times to $11.5 billion from a year earlier. At the end of July, the company reached an annualised revenue of $65 billion, up from $9 billion at the end of last year.

Anthropic prepares for listing

Ahead of the planned listing, maintaining profitability would mark a major milestone for the five-year-old company. The startup has chosen Nasdaq for its IPO, which could value the AI firm at $2 trillion or more.

Anthropic was expected to release its prospectus last week. However, the company shared documents with a small group of investors and will respond to their questions before making them public.

Troubled times for AI industry?

The AI startup's listing comes at a troubled time for the artificial intelligence industry, as the rapidly advancing pace of development collides with public anxiety over the technology's impact on everything from the environment and jobs to the future of humanity.

Anthropic's Chief Executive Officer (CEO) Dario Amodei, on 12 September, published an essay publicly acknowledging for the first time the risks associated with the technology and calling on the AI industry to slow down the pace of development. Potential investors in the startup are now grappling with the implications of the intense scrutiny surrounding AI safety, as well as a business model that has yet to be tested on public markets.

In an essay published on September 13, Amodei called on the industry and said, "we must slow the pace at which we improve the capabilities of AI models” after former researchers raised alarm about the power of new models. His call was echoed by OpenAI chief Sam Altman and SpaceX chief Elon Musk.

As Anthropic moves towards a public listing, its ability to sustain profitability while continuing to invest heavily in AI development will likely be watched closely.