Better Offline - Monologue: Anthropic Slows Down

Episode Date: October 16, 2026

In this week's Better Offline monologue, Ed Zitron talks about how Anthropic’s big Q3 revenues underwhelmed an already-nervous market, and how the more of the real numbers we learn about AI, the worse things seem to get. Newsletter: Annualized Enron Ratehttps://www.wheresyoured.at/annualized-enron-rate/Gartner Analysis: https://x.com/edzitron/status/2110442012281651488?s=20Q3 numbers from CNBC: https://www.cnbc.com/2026/10/15/anthropics-third-quarter-revenue-hits-16point8-billion-ipo.html Save $10 off a year of my premium newsletter: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/gzqwkv54e1 YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more. --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/  Discord: chat.wheresyoured.at Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/edzitron.com https://www.threads.net/@edzitron Email Me: [e-mail] omnystudio.com/listener for privacy information.

This is an I-Heart podcast. Guaranteed Human. Lisa, tell them about our new show. We have a new podcast. It's called Don't Lie to Me. I'm Lexi Youanu. We're two best friends, 22 years apart, but so close at heart.

And I'm Lisa Di Giulio, the old one, which means we have wildly different references, occasionally different opinions, and at this point in my 50s, I've lived it all. Now in my 30s, being the founder of new shoes, good taste is my business. Listen on the IHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Melissa Jeltson, host of the What Happened to Her Podcast.

We're kicking off the season with the Sandra Birchmore story, a case the police rode off as a suicide in a snowstorm. Her family never bought it, and the man they suspected wore a badge. You never know who that devil is because he's wearing in disguise. Sometimes it's a police uniform. And you can get access to all episodes 100% out of it. free with an IHeart True Crime Plus subscription exclusively on Apple Podcasts, available only to IHeart True Crime Plus subscribers. So don't wait.

Head to Apple Podcasts, search for IHeart True Crime Plus, and subscribe today. Didn't catch the latest Roland Martin unfiltered podcast? Here's what you missed. There should not be a single law enforcement agency and does not have body cameras. It's real. Black farmers have been under attack. This is just the latest example of them just slapping DEI on anything. Raw. And I'm sitting here going, they are playing y'all for fools.

Catch Roland Martin's daily commentary on the Black Information Network. And download Roland Martin Unfiltered on the IHart Radio app, Apple Podcasts, or wherever you get your podcasts. AllZone Media. Hello, welcome to this week's Better Offline monologue. I'm your host, Ed Zittron. On Wednesday night, Anthropics Q3 numbers dropped through leaks from meetings with investors in preparation for its IPO. and boosters have been packing their lunches like their budd wire on the way to a press conference. Why? Because despite hitting $16.8 billion in revenue, sales only grew by 46% quarter over quarter, which might seem like a lot, but Anthropics' entire sales pitch to investors and the general public

was that its revenues were eternally parabolic, and based on the oinking and squawking from Twitter, the expectation was that it would hit $20 billion or more for the quarter. Another reason the hogs are so upset is that anthropic neglected to include a new annualized run rate figure. A made-up number derived from multiplying, in most cases, a trailing 28-day periods worth of revenues by 13, specifically to make the company's revenues seem bigger and extrapolate growth in what I'd describe as a deeply deceptive way. The reason anthropic neglected to do so is that it's likely that the number was lower than boosters expected. A few months ago, Bloomberg and others reported that said run rate had hit $65 billion at the end of July, which means that the expectations had them set anywhere from $75 billion to $90 billion,

though I should add that these numbers are all complete bullshit, and none of these articles ever explain how the number is derived and over what period it referred to. In fact, Bloomberg just says a short period annualized. It's completely fucking useless. In any case, boosters have loved these big, beautiful. numbers because they allowed them to express Anthropics' growth in terms that made things look far better than they were. A few months ago, multiple outlets had reported investors expected Anthropics' run rate to hit $100 billion by the end of the year, and now many

of them are posting that's not going to happen with the tone of someone who found out their dog is dying. The league also revealed that Anthropic had an adjusted operating margin of 11% and adjusted gross margins of 85%. Adjusted is a term used to describe. stuff that's not up to the standards of GAP, generally accepted accounting principles, because it leaves out costs like stock-based compensation, R&D, or, well, anything the company wants to because it's non-gap. Nevertheless, some outlets are using this to suggest that Anthropic is approaching profitability, as in it would be profitable, if it wasn't for all the expenses. Another wrinkle in the story was that Anthropic noted that 5 to 7% of its revenues came from distillation,

as in Chinese model developers using its services to train their own models, meaning that anywhere from $840 million to $1.17 billion worth of its Q3 revenues came from its competitors building competing products and paying them for the privilege. Anthropic recently reported that it had taken measures to reduce these attacks, as they call them, by more than 90%, which is good news on a competitive level but also means that its revenues have for several years, be not officially inflated, probably by billions of dollars. This all puts Anthropic in kind of a bind. To match its current revenue growth, it would need to grow another 53.6% or so quarter over quarter, as its revenue base is now, I assume, about 5% lower, meaning it needs about $25.8 billion or so in Q4. Anything less than 20 is a

fucking disaster, by the way. And per ramp data, 80% of Anthropic and Open AI's enterprise revenues come from the top 1% of its customers, with the vast majority of those being unprofitable, unsustainable AI start-ups, meaning that that growth will mostly have to come from venture-backed money losers in perpetuity. Ramp also reported last week that AI spend is falling, despite rising usage, at exactly the wrong time for all of this to be happening. And all of this times extremely poorly, with an aggressive sell-off of better-off-line turd-of-the-century core weave, which has now reversed somewhat, because of the dunces that bet on the financial markets, on NVIDIA CEO Jensen Huang saying that Corweave was in good financial condition

and that Nvidia did not need to backstop it, despite the fact that Nvidia has already backstopped Corweave's leases and sunk billions of dollars into the company. I do not see these factoid in a single fucking story mentioning Jensen Huang's comments, because journalism is apparently too fucking difficult for everyone. And this problem did very little to calm the bond market, despite the stock bursting a little bit by about 3% as I'm looking at it. Corweave's debt now trades at a yield of at least 14.6%, with its worst one,

trading at 15.47%, meaning that those closest to the actual money, the actual debt, the actual, you know, payments of stuff, are pricing Corweaves' debt like the junkiest of the junk. I think the worst of the junk is like 17-20%, so some ways to run, but pretty damn junkie. And as all of this boiled over, Gartner released a report saying that by 2030, 80% of neoclouds would have ceased operations, adding that forecasts for AI revenues in the next three years were trillions of dollars short of what it would take to have even a 12% return on invested capital. And I must be clear, the assumption that they have is that AI will make $3.5 trillion worth of

revenue, and they're still trillions of dollars off. Just to be clear, AI is not even making $300 billion of annual revenue. Avenue. People would know this if they fucking looked, including Gardner. Gardner has the resources. Why is that one fucking bothering? I feel like I'm taking crazy pills. And this was mere days after a Jeffrey's report came out that said that the most likely outcome of the so-called AI boom would be a massive capital destruction in the US. I just need to ask you a question. Is that good? Everyone's talking about all in one place and it's free. I heart radio.

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Grab the free app. IHard Radio. Everywhere you go. Always free. Download the free IHR Radio app today. I'm Melissa Jeltson and in my new podcast what happened to her, I'm bringing you new stories and conversations every week. Stories about women whose deaths were too quickly ruled a suicide.

She was starting to get worried and get scared for her safety. Stories of survival. The only difference between me and her, frankly, was a little bit of luck, because by all rights, I should be dead. Cases that everyone else called closed. They can't convict her, right? Like, she has so much evidence. These stories all start in the same place with a woman failed by a system

that didn't believe her, that didn't protect her, that didn't see her. No child should ever experience that. And we were babies. She did all of these brave things and came out and spoke about it and he got a year. You never know who that devil is

because he's wearing the disguise. Sometimes it's a police uniform. Listen to what happened to her on the IHeart Radio app, Apple Podcasts, or wherever you, get your podcasts. Lisa, we should tell them about our new show. Oh my God, Lexi.

We have a new podcast. It's called Don't Lie to Me. I'm Lexi Youanu. We're two best friends, 22 years apart, but so close at heart. And I'm Lisa Di Giulio, the old one, which means we have wildly different references, occasionally different opinions, and at this point in my 50s, I've lived it all. I'm not going to get any of your fighting. That is wild.

I learned that about you today. Now in my 30s, being the founder of new shoes, good taste is my business. And I've always got something to say. If men were just honest about this, there would be so much more peace in the world. We're going to talk about dating, relationships, beauty, getting older, and a little wiser. We're best friends, but we don't always agree. Because you told us how accommodating you are. Obviously, I would do what I think I could do to fight the fight, but there's only so much fight I can fight.

Don't lie to me. Don't lie to me. Don't lie to me. Don't lie to me. Don't lie to me. Don't lie to me. Liar. Listen on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. I don't really care.

Didn't catch the latest Roland Martin unfiltered podcast? Here's what you missed. And the argument is, do you want to win? If you don't win, you have no power. It's real. Those are the very people who I always say vote against their own economic interest. And they complained about the very thing to receive me. It's raw.

I knew that the issue of transgender athletes was not going well with a lot of black men. Roland Martin unfiltered. I went off, I said, this is exactly what I'm talking about. Y'all going to scream at Chanel, but you don't want to see a black luxury company in the same vein. Catch Roland Martin's daily commentary on the Black Information Network. 12 seats. Those are moving south. So if you Democrats, you don't wait to 2030, you better be hitting the ground going hard in the South now.

And download Roland Martin Unfiltered on the IHart Radio app, Apple Podcasts. Wherever you get your podcasts. It's Dramos, and I want you to meet the disruptors who are setting today's trends and discover those who are building what's next. People like Sebastian Yatra. Life is on the other side of fear. Introducing Global Flow, a new podcast where I sit down with disruptors across music entertainment, business, and tech to break down what they're building, get the blueprint to how

they got there, all while trying to figure out what's coming next. They'll share their stories including not just the winds that we all see, but the moments they had to persevere through when everyone counted them out. People like the co-founder of Buddy's Coffee, Rachel, who quickly went from being a New York Times success story to facing eviction. Being, you know, deemed a successful business by like, you know, I mean, so New York Times, like, as like a Puerto Rican girl from New York who didn't finish college. He was like, I was like, holy crap, like, I'm finally doing something. Like, maybe this is all working out.

And then that day when the landlord comes in, it's like, you like, you like, it all over that idea and he stepped on me. Listen to the global flow as a part of the Michael Tuera podcast network available on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Anyway, markets in both the US and Asia puked a little on all of this bad news. Anthropics' growth had to be absolutely meteoric to warrant its supposed demands for a $2 trillion valuation, and to pay for its $413 billion worth of non-cancellable contracts. This company had been priced for perfection,

and made promises contingent on achieving growth that at some point comes down to how much venture capital money its customers can raise and continuous spending in ever-growing amounts for businesses that only lose money. You know, much like Open AI and Anthropics. This has been a lot of fun to record. I will admit, I got a little stuck with the show for a bit. It hadn't been having as much fun as I wanted. I realize it's because I've not been showing my fucking contempt for these companies.

I find all of them sickening. I find the people that inflate their egos and their balance sheets, at least with fake numbers, truly despicable. I find it contemptuous that the, so-called journalistic professionals out there are still using run rates, that they're taking them seriously. I see financial analysts taking them seriously as well. I don't come from a finance background. I'm just a regular guy who read a lot of stuff and let me tell you something. It is fucking disgraceful that the AI bubble has had anything based on these fucking elf numbers,

this magical math of run rates, and to see the hogs braying so oinkily about the fact that we didn't get a new number is both vindicating and sickening. You motherfuckers should actually look at the real numbers. You should want real data. You shouldn't want elf numbers. You shouldn't want imaginary run rates. And any journalists listening to this, if you are still using run rates, you are failing at your job. Make no mistake. I am not mincing words here. If you're using them without a giant goddamn disclaimer saying that you don't have the underlying mattresses, They are underlying way that they're calculated. I mean, in bold and italics, like a warning sign or a pack of fucking cigarettes, you are failing at your job.

That is just the truth. I know this might hurt your feelings, but your feelings need to be hurt for something to fucking change. Because when this explodes, it's going to be so much more harmful because it got inflated on these flimsy numbers. And you'll notice that everyone seems to freak out the moment real numbers come into the picture, the moment we learn the actual, financial conditions of these companies, people begin to panic. In a real industry, in something that actually is worth all this money, the real numbers would be good news. The real numbers would show you how well AI was doing.

Yeah, whenever we get a real number, it sucks. It fucking sucks. And it continues to suck. It is fucking crazy. I put it in my newsletter this week. It's the annualized Enron rate. I love that title. I put it in there, but we don't know the financial profile of the vast majority of AI

startups. We now have what? Nearly two years of Anthropics revenues. We don't have their costs for most of it. We have, thanks to me, the alternative financials of OpenAI for 2024 and 2025. We don't have shit on perplexity or cognition. Cognition's worth $48 billion. dollars and we don't know anything about it's P&L.

We just have fucking annualized run rates. One billion annualized run rate. Who gives a fucking shit? I'm sorry for not being more eloquent about this. I know. But I just can't help myself. I can't help myself for having contempt for these fucking companies and the shitty ways in which journalists help inflate them.

Inflate their egos. Inflate their financial profiles. help them raise money. I have watched multiple financial outlets today. Run cover for both call weep and anthropic. That's not your fucking job. If you feel the instinct to tell a good story when things are going badly, as a journalist you are no longer participating in journalism unless you are reporting.

I mean actually reporting something. I don't mean I've looked at the adjusterated, I'm keeping it adjusted, operating margins, and I found a good way of looking at. at it. I've done some napkin maths and I've come up with a new way the run rate could be good. That is not journalism, it's fucking marketing. So, forgive me if I'm a little bit fiery about this stuff. Forgive me if I'm calling people fucking idiots for doing this stuff. Forgive me for saying people are not acting in a professional way when they use these run rates. Forgive me. Actually, I don't. I don't give a fuck. What I give a fuck about is the truth and I'm sick of hearing these

fucking numbers. I am sick of the ways in which journalism is holding up these companies. It's not going to change a thing. And as I've said, as more real numbers come out, things will get worse because the actual underlying economics of AI do not work. And I know so many of you email me agreeing, and I love it. I love you all. I truly do. And that is a reference to the menu of you and you here. And I'm just, I'm happy to have you, but I'm frustrated. Because even with this anthropic news as I look over at my terminal. I thought, maybe this will push it over the edge. No, call weaves back up because Jensen fucking Huang said they're fine.

This is how dumb the markets are. And of course, journalism just copy-paste in that shit. No need to think. No need to consider. No need to have an opinion. Or even form any thought at all. Just put the story in the bag. That's all it takes. Well, guess what? Everyone who participated in that, without exception, don't care where you were. who helped inflate these companies, when this shit explodes, it's on you. If you're listening to

this and you're a journalist who's done this stuff, it's on you. You can still change things. You can turn against these companies. You can actually push back on the underlying rotten economics. You won't. Sorry, I know you won't. And if it's because your editors are telling you not to, please reach out and tell me because I at least like to know those of you who are being muscled. but if you're not being muzzled, if your reason for using run rates is because you actually think they are a useful measurement, you're either ignorant or corrupt.

You choose. I realize that was a little damning. I realized that was a little brutal. But I'm going to be honest, this is the show now. I have really let go of what made better offline great, which was the actual emotional connection with all of this stuff, airing the frustration. I have ad-libbing a little as I have at the end of this. I'll be honest, I fucking love doing it.

And you're going to really hear that in the next episode. I'm joined by an original guest of the show within the first like 10 episodes, maybe less. Tom Dutant, he wrote an amazing piece of Vanity Fair about Larry Ellison and his big wet son, David, and actually Larry Ellison also has a daughter. I surprised didn't know this. Anyway, it's one of the best interviews I've done. I think I just said interviews, but we're going to keep going. It's one of the best ones because I've just fucking let loose. And that's what I'm going to do with the show going forward. Because talking about the tech industry in this cold, calculated, ultra-financialized way,

without having the disgust necessary to talk about these companies, just kind of wasting your time. That's a little harsh on me. Either way, I really enjoy hearing from all of you, shoot me an email, shoot me a glute on slub or a slub on glurt. Those are two different social networks and two different buttons. you can hit on them. And I will catch you next week. I love you all. Lisa, tell them about our new show. We have a new podcast. It's called Don't Lie to Me.

I'm Lexi Youanu. We're two best friends, 22 years apart, but so close at heart. And I'm Lisa Di Giulio, the old one, which means we have wildly different references, occasionally different opinions, and at this point in my 50s, I've lived it all. Now in my 30s, being the founder of new shoes, good taste is my business. Listen on the IHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Melissa Jeltson, host of the What Happened to Her Podcast. We're kicking off the season with the Sandra Birchmore story, a case the police rode off as a suicide in a snowstorm.

Her family never bought it, and the man they suspected wore a badge. You never know who that devil is because he's wearing in disguise. Sometimes it's a police uniform. And you can get access to all episodes 100% ad-free, with an IHeart True Crime Plus subscription exclusively on Apple Podcasts, available only to IHeart True Crime Plus subscribers. So don't wait. Head to Apple Podcasts, search for IHeart True Crime Plus, and subscribe today.

Didn't catch the latest Roland Martin unfiltered podcast? Here's what you missed. People wake up and go, oh, damn, wait a hold up. They change all of that? Yes. It's real. This is a wholesale attack. It is targeting black people in every federal agency.

It's raw. White folks have never allowed that reckoning to last more than a decade. Catch Roland Martin's daily commentary on the Black Information Network. And download Roland Martin unfiltered on the IHart radio app, Apple Podcasts, wherever you get your podcasts. This is an IHart podcast. Guaranteed Human.