Anthropic IPO Valuation Faces Scrutiny Over Circular Cloud Spending Loop

Anthropic is preparing for an IPO that could value the company at more than $2 trillion. This potential valuation has drawn attention to a financial cycle between the AI firm and its primary investors, Amazon and Google, which critics argue may distort the company's true market standing.

The mechanism involves a recurring loop: Amazon and Google invest billions into Anthropic, which in turn commits to spending billions on cloud infrastructure provided by those same companies. This arrangement allows the tech giants to participate in Anthropic's rising valuation while simultaneously capturing significant cloud revenue from the AI startup.

The scale of these commitments is substantial. Amazon has invested $33 billion into Anthropic, while the AI company has committed to spending over $100 billion on AWS over the next decade. Google’s involvement is even larger, with $43 billion in total investment commitments and a $200 billion spending pledge from Anthropic for Google Cloud services over the next five years.

Financial data from the company's IPO prospectus, as reviewed by Reuters, highlights the pressure these obligations place on the business. In 2025, Anthropic generated $4.6 billion in revenue but incurred $7.33 billion in compute and infrastructure costs. Total operating expenses reached $12.65 billion, resulting in an operating loss of $8.06 billion.

The company's future obligations present a significant hurdle. Anthropic holds $518 billion in future cloud and infrastructure commitments, yet it finished 2025 with only $20.28 billion in cash and short-term investments. These future obligations are roughly 25 times the company's year-end liquidity.

A $2 trillion valuation would place Anthropic at approximately 435 times its 2025 revenue. This proposed valuation represents an increase of more than $1 trillion in just four months, following a previous valuation of around $965 billion.

While Anthropic saw its revenue grow roughly 12 times in 2025, the sustainability of this growth is a point of contention. Nearly one-quarter of the company's 2025 revenue originated from only two customers, and many of its largest clients are not bound by long-term contracts, leaving them free to reduce spending at any time.

The core of the debate remains whether Anthropic can scale its revenue rapidly enough to cover its massive infrastructure commitments and transition from its current loss-making state to profitability. The reliance on a circular funding model with its own cloud providers remains a central point of concern for those evaluating the company's long-term financial health.