The Anthropic prospectus for its initial public offering is a unique document for many reasons. We don't often get to see 1,300% sales growth coupled with an 85% gross profit margin, nor 93 pages of risk factors, with one of them warning that the company's artificial-intelligence models may try to blackmail users. Fun times.
Another thing one doesn't usually see from a start-up is nearly a trillion dollars in future commitments for supply and leases, especially considering the mere $16 billion in company sales in the first half of 2026. For the counterparties of all these deals, Anthropic represents a huge present and future customer, but also a ton of risk. Anthropic is writing a lot of checks, and if things don't go as planned, some of them will bounce. Then, the dominoes would fall.
The prospectus lists deals for AI computing infrastructure with Microsoft, Alphabet, Amazon.com, SpaceX, Advanced Micro Devices, and Broadcom plus two smaller cloud companies, Nscale and Lambda.
Alphabet has the most complex relationship with Anthropic; it is mentioned 109 times in the prospectus. Alphabet is a distributor, a named competitor, and will be a greater-than-5% shareholder after the IPO thanks to multiple rounds of funding. It's also a huge supplier. In addition to a Google Cloud contract for $115 billion, there's a yet-to-be finalized cloud deal for Google's tensor processing unit, or TPU, chips worth $125 billion to $150 billion. On top of that, Broadcom -- which designs the chips with Google -- is charging Anthropic $161 billion to rent TPUs.
Amazon was mentioned 166 times in the prospectus, and is also a distributor, competitor, greater-than-5% shareholder post-IPO, and a supplier to Anthropic. The companies have a $110 billion cloud contract.
SpaceX's relationship is much simpler, with deals totalling $120 billion, though either party has the option to pull out starting during the first quarter of 2027.
By comparison, Anthropic's contract with Microsoft Azure is small, at $45 billion. It has similarly sized agreements with Nscale and Lambda.
Anthropic also expects to buy or rent $20 billion worth of AMD's Helios AI servers, and Nvidia equipment underpins many of these commitments.
Were Anthropic to breach any of these contracts, it would send the counterparties' stocks tumbling.
These commitments by Anthropic (and similar ones from its main competitor, OpenAI) are a big part of why hundreds of billions of dollars are being spent on AI data centers by those counterparties, three of which -- Microsoft, Alphabet, and Amazon -- reported earnings this past week. Cloud spending and revenue were in sharp focus.
Microsoft reported its fiscal first quarter on Wednesday, and it was another quarter in which the company showed that its generational investments into AI are paying off. Sales at its Azure cloud unit were up 48% from last year, better than the Wall Street consensus estimate. Despite rapidly growing depreciation expenses, the operating margin in the segment that contains Azure held steady on the year, at 53%.
To underline how important Anthropic and OpenAI have become to these cloud giants, 30% of Azure sales and 11% of all revenue came via OpenAI. Microsoft also owns 24% of OpenAI.
What's more, unlike the other two cloud companies that reported earnings this week (and Meta Platforms the previous week), Microsoft has still been able to pay for its capital expenditures with cash flows from operations. The company paid back $5 billion of debt in the quarter, and it's still doing share repurchases, which Alphabet and Meta have both halted.
But even Microsoft is bending. On Thursday, it sold $25 billion in bonds, its first issuance since 2017.
Microsoft shares fell 0.2% that day.
Alphabet reported its third-quarter earnings at the same time. Google Cloud is on a heater, with rapidly expanding cloud and TPU hardware revenue. Segment sales doubled from last year, and the unit's operating margin rose from 24% to 36%. These metrics were well ahead of Wall Street expectations, and things at Google Cloud could hardly be going better.
But the company's core advertising business with search and YouTube faltered, missing estimates for sales and operating profit. Research and development expenses were way above projections. And the company's speculative "other bets" segment showed a bigger loss than analysts had thought. All together, even as Google Cloud shone, the rest of the company limped out of the third quarter.
Moreover, Alphabet's capital expenditures continue to grow sequentially, which wiped out all the September quarter record cash from operations, and the company posted its second quarter in a row of negative free cash flow. As a result, it made no share repurchases for the third quarter in a row. The stock was down 13% the following day.
Amazon's third-quarter earnings came on Thursday afternoon, and it recalled what happened 24 hours earlier to Alphabet. The cloud unit, Amazon Web Services, had a great quarter, handily beating Wall Street's high expectations for sales and operating margin.
But the retail segments faltered and missed combined expectations for revenue by a bit. Guidance for next quarter also disappointed.
But the biggest shock was $77 billion in capex in the quarter, and a free cash outflow of $35 billion, raising it to $62 billion so far this year. The company maintained its 2026 capex guidance of $220 billion, implying around a comparatively moderate $45 billion in the fourth quarter. This could mean positive free cash flow, at least for the holiday shopping quarter.
As long as tech giants remained so entwined with Anthropic and OpenAI, they have -- to a large extent -- cast their fates with these two start-ups. The tail is wagging the dog.
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