Anthropic’s key number is its 85% gross margin

Investors and journalists have now spent two days parsing Anthropic’s IPO filing — its risk factors, its $80 billion headline net loss, and its unusual governance structure — but there’s one number Silicon Valley prizes above all. The company reported an 85% gross profit margin on the core work of running its existing AI models — as The Information wrote, it’s “a reality check” for skeptics who thought the consumption-based, pay-as-you-go pricing wouldn’t be profitable. It could also be a good sign for Anthropic’s rival, OpenAI, which runs a similar business model, even though it’s considered less efficient in part because of its massive non-paying user base. Anthropic is still losing a lot of money overall, and its margin excludes the cost of training new models.

First reported by Semafor. This page is a short excerpt; the full text is theirs.