Tech Brew Ride Home - Anthropic's S-1 Just Dropped!

Starting point is 00:00:04 Welcome to the tech brew right home from Monday, October 26. 2026, I'm Brian McCullough today. Anthropics S-1 finally dropped. The ticker will be ant, $16.3 billion in first half revenue, and a gargantuan compute bill. Apple unveiled an OLED iPad mini. Meta moved to raise $95 billion for AI. Elvis's rights holders sued Anthropic and Blocks Dessa speech model. Wow, me at least.

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Starting point is 00:01:14 AI. See what it looks like when security and AI operations work together at rubric.com slash mb. That's rubrik.com slash mb. It is here. The Anthropic S1 just dropped. Anthropic has filed for an IPO on the NASDAQ under the symbol ANT. The number of class A shares to be offered and the price range is yet to be determined, but here's what we now know about Anthropics finances, quoting the Times. We believe that AI is one of the most consequential technologies in human history. Dario Amadai, the chief executive of Anthropic and the company's six other founders said in a much-anticipated corporate filing that signals its public listing is just weeks away. Mr. Amo-Dai and the other founders added that their San Francisco

Starting point is 00:02:04 company aimed to realize the benefits of AI while navigating and preventing the risks that come with a technological revolution this fast and this powerful. In the filing, Anthropics said its revenue skyrocketed to $16.3 billion in the first half of the year, a 14-fold increase from a year earlier, largely from businesses using its AI software, including Claude. But as it spends billions to grow, Anthropic has bled money. The company lost more than $80.7 billion in the first half of the year, compared with a loss of $13 billion a year earlier.

Starting point is 00:02:37 The net loss was abnormally large because it included a one-time $72.4 billion charge related to convertible notes, a type of debt that will later turn into equity, the value of which increased alongside Anthropics' rise in value. Anthropic could aim to raise more than $100 billion in its public listing, which could value the company at $2 trillion, pushing it past Elon Musk's SpaceX as the world's biggest IPO, end quote. And quoting Bloomberg. Consumption-based revenue rose from $200,000. and $88 million and 75% of the company's revenue for the year that ended December 31st, 2024 to $3.8 billion and 83% of the total for last year. IT made up $13.1 billion and 80% of revenue between January and June of this year. For Anthropic, consumption-based revenue refers to customers that pay for its AI models as they use them based on the amount of tokens and the type of AI model they use.

Starting point is 00:03:35 The company's total indebtedness stood at $6.2 billion as of June 30th, and it said it could raise more debt going forward to meet its financing needs. The company spent $8.9 billion on computing power and infrastructure in the six months that ended June 30th up 283% from the year prior. The company noted that these expenses declined as a percentage of revenue seemingly responding to concerns about the pace of spending. Just since the end of 2025, Anthropic entered into new agreements for computing power with minimum obligations of about $417 billion. These agreements will generally start this year or next with terms as long as 20 years. Anthropics compute economics have improved as revenue has scaled.

Starting point is 00:04:19 Compute and infrastructure spending was more than 10 times revenue in 2023, falling to 653% in 2024, 160% in 2025 and just 55% in the first half of 2026. In the second quarter alone, it fell further to 48% of revenue, meaning Anthropic was spending about 48 cents on compute and infrastructure for every dollar of sales, end quote. And quoting Zero Hedge News. On October 14th, we asked whether Anthropic was going public from a position of strength or need and concluded it was both. The public S-1 sharpens that answer.

Starting point is 00:04:57 The strength is real, a 14x revenue ramp, a genuine gap operating profit, positive operating cash flow and costs finally growing slower than sales. But so is the need. The company has signed up for roughly $780 to $810 billion worth of compute, much of it non-cancellable and payable regardless of actual usage. It is financed in part by the same vendors who sell it the chips in the cloud, and its supply now includes Elon Musk at $3.1 billion a month. Meanwhile, its revenue growth just dropped from 144% quarter over quarter to 45% quarter over quarter, and the most important number in the prospectus is blank. At the $1.5 trillion valuation investors have reportedly settled on,

Starting point is 00:05:46 Ant would trade at about 22 times annualized Q3 revenue at $2 trillion. It's about 30x. That's a perfectly defensible multiple if the curve re-steepens in Q4. If it doesn't, those obligations will look a lot like what they are. A 10-year take-or-pay bet sold to public investors who get 49.9% of the vote and none of the say. We know which way we lean. With Corweave, CDS blowing out and the AI debt window narrowing by the week, the November window will likely be set less by clawed than by the credit market that is supposed to fund the bill.

Starting point is 00:06:23 We'll know more when the price range and Q3 line get filled in, probably within two weeks, end quote. Apple has got a new redesigned iPad Mini for you with an 8.5-inch OLED display, an A-20 Pro-chip, 24% thinner bezels, and an optional nanotexture finish starting at $699, with pre-orders starting on Wednesday and shipping on November 6th, quoting the verge.

Starting point is 00:06:57 At 5.4 millimeters thick, the iPad Mini is thinner and lighter than its predecessor. It also has bezels that are 24% slimmer, allowing the device to maintain the same small form factor with a display that's slightly larger than the previous generation's 8.3-inch screen. The new iPad Mini comes with an IP67 rating for protection against water and dust,

Starting point is 00:07:18 along with a peak brightness of up to 1,200 nits. Aside from an OLED display, the new iPad Mini features an upgraded A20 Pro Chip. This enables support for some of Apple's new Siri AI features, including the ability to tweak the expressiveness and pace of the assistance voice. The iPad minnie's 12 megapixel front-facing camera is now on the long edge of the device, making it easier for video calls in landscape orientation, end quote. Quoting 9 to 5 Mac. Apple touts that the new iPad Mini has an acoustic display. Here's how the company

Starting point is 00:07:50 explains this technology. The new iPad Mini features an innovative acoustic display for an even better audio experience when gaming, watching videos, or editing content. Special-designed woofers are paired through the display to produce punch your bass and more volume. In addition, custom tweeters are now hidden between the glass and aluminum enclosure for clearer hives. The acoustic display also features a sealed enclosure that helps iPad Mini achieve its IP67 rating. The iPad Mini's 12 megapixel center stage front camera, as mentioned, is now located along the landscape edge. There's also a 12-machixel wide, back camera with support for smart HDR 4 and 4K video at up to 60 frames per second.

Starting point is 00:08:31 The 256 gigabyte and 512 gigabyte models are available with a nanotexture glass option as an additional $100 upgrade, end quote. As I record this, it's still an hour before public markets open for trading, but I'll be curious to see what Wall Street thinks of this. Meta has announced plans to raise $95 billion to finance its AI infrastructure, including $35 billion in public equity offerings backed by Cornerstone investors, Nvidia, AMD, and Broadcom. The share sale comes amid a pullback in U.S. tech stocks as investors worry about the sustainability of the AI boom that has powered Wall Street's rally in recent years.

Starting point is 00:09:18 The NASDAQ 100 index has lost more than 5% over the past month dragged down by a heavy sell-off in semiconductor shares. Last week, META reported a 26% jump in sales in the third quarter ahead of analysts' estimates and projected capital spending of up to $145 billion this year. As it warned investors, it would need to raise hundreds of billions of dollars over several years to fund its bet on AI. The news sent shares in Mark Zuckerberg's social media group, which owns Instagram and WhatsApp tumbling by 7% on Thursday.

Starting point is 00:09:51 Meta kicked off that fundraising process on Monday with a plan to raise 35% percent. billion in underwritten public equity offerings. It also intends to raise a further $60 billion via an at-the-market program, which it said is expected to begin in the first quarter of 2027. Meta stock was trading about 3% higher on Monday in pre-market trading. Morgan Stanley and Goldman Sacks are acting as lead joint bookrunners for the offerings. AI is creating significant opportunities for meta across its core business and new products and services. The Silicon Valley company said meta's AI investments are already generating tangible returns through increased engagement, improved advertising performance, and increased monetization.

Starting point is 00:10:32 Nvidia, AMD and Broadcom, which all supply meta with chips and other computing infrastructure to power its AI data centers have indicated interest in becoming cornerstone investors in the equity offering. Meta said the three U.S. companies could collectively contribute up to $5 billion. In a filing last week, Meta indicated that it has agreed to spend more than $800 billion on leases and contracts related to data centers and energy supplies over the next decade, as well as to expand its portfolio of AI wearable devices, such as its Ray-Ban meta smart glasses. Meta's deal comes after Google's parent alphabet announced a $90 billion equity financing in June, which lead bookrunner J.B. Morgan said was the largest multi-trunch equity transaction in history.

Starting point is 00:11:16 Meta's latest fundraising scheme is part of a complex new stock structure unveiled last week that is intended to allow the company to sell shares to fund its AI investments without diluting Zuckerberg's control of the company. The move could face shareholder opposition after Meta abandoned a similar plan in 2017, end quote. Elvis Presley's rights holders are suing Anthropic over 274 songs allegedly used to train AI models. Anthropic says it disagrees and will defend itself. Quoting the Times. The suit filed on Friday in the U.S. District Court for the Northern District of California on behalf of several parties seeks a jury trial and more than $41 million, or $150,000 per song, and damages. The owners of the music who include the licensing company Authentic Brands Group,

Starting point is 00:12:11 Raleigh Music Publishing, Multiple Trusts, and at least one individual also accused Anthropic, the company behind the popular chatbot Claude, of circumventing measures used to protect the music and removing or altering copyright management information from the songs. The Elvis plaintiffs bring this action to enforce these exclusive rights against the defendant that has built its entire business model based on copyright infringement at a scale never seen before, the lawsuit said. Anthropic infringed on 274 of Presley's songs, the lawsuit contends, including hits like all shook up, can't help falling in love and return to sender.

Starting point is 00:12:46 A representative for Anthropics said in a short statement on Sunday that the company disagreed with the claims and that it intended to defend itself against the case, end quote. If you're struggling to scale your business, it's probably not because you need more headcount or a bigger budget. Without documentation of critical knowledge, your team can't work efficiently. That's what Scribe is built to fix. When specialists and experts leave your team, their knowledge leaves too. With Scribe, you can avoid the scramble for information. Here's how it works. Scribe captures workflows in real time and automatically generates the documentation for how your company works with no manual writing. It automatically redacts sensitive information like names and account numbers from screenshots, and nothing is published without human review.

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Starting point is 00:14:50 I know. not yet another model to tell us about Brian, I get it. But this is one where if you haven't seen in an action, you really need to, because I think this is the GPT3 moment for speech and AI. Like, this is, I think, the first AI that can pass a Turing test, at least if it's just audio. Quoting The Verge, Jack Dorsey's Block announced an AI model called DESA

Starting point is 00:15:19 that's trained from scratch on nothing but human conversation and to show off the model, blocked shared chats it has had with humans that can occasionally be a little awkward and uncanny. Take this one, for example, shared by Dessa's lead developer. The conversation between the model and the speaker does have a mostly natural back and forth. Here's a video of Dessa playing a guessing game over voice. The Dessa website features a few other examples like a back and forth about Christopher Nolan's films, including Dessa going on an unexpected tangent about Brian Singer's Superman films, a person telling Dessa about taking it on a surprise trip to Paris,

Starting point is 00:15:55 to which Dessa, as the website describes, then answers with what sounds like teary gratitude and a conversation between Open AIs GPD Live One voice model and Dessa, where Dessa comes across as more natural. You can hear clips from some of those conversations in this video. On the website, the Dessa team says that Dessa is a true speech-to-speech model and everything it knows came from human speech. And it can run locally on a MacBook Pro M4Max or better. The DESA team says it will be giving a small group of AI safety researchers early access

Starting point is 00:16:26 to the model, end quote. Again, this is one where you really need to click through on the link to this segment to see the model in action to see why I'm so wowed. Finally today, it's not just the PHP problem now. They're calling it Black October. The tsunami of potential AI made possible hacks is seemingly upon us. And I guess we're about to find out if the only way to stop a bad guy with a model is to have a good guy with a model. Quoting the journal, we've been seeing an explosion of these agentic adversaries, said Adam Myers, a senior vice president with the cybersecurity firm CrowdStrike. We found advanced adversaries using this. We found very unsophisticated adversaries using this. The pace and volume of the

Starting point is 00:17:14 AI-powered attacks are starting to overwhelm the incident response firms that respond to cyber breaches. pundits are referring to the month as Black October and many in the field are predicting more to come. We expect that there's going to be a massive number of compromised disclosures in the coming weeks and months, said Stephen Adair, president of the cybersecurity firm Volexity. Incident responders such as Adair say that AI tools are now being used by nation state hackers from China and Russia as well as criminals looking to steal data and install ransomware. One of the tools they are using is a Chinese open source hacking tool called RTEX, which uses artificial intelligence to automate the process of breaking into a computer network. This week, Microsoft said that threat actors across multiple geographic regions were using R-Tex to speed up attacks on hundreds of companies. Earlier this month, a cybertech used R-Tex to steal data on about 68,000 people from South Korean banks.

Starting point is 00:18:07 Hackers are using AI for reconnaissance to analyze vast swaths of data they steal and even to rapidly build exploit code that can be used to break into networks, said Sherry Davidoff, founder of the security consulting firm, LMG Security. Every three months, Davidoff works with a data breach services company called Net Diligence to poll a group of her peers about the technologies they are seeing in real world cyber attacks. A year ago, virtually none of them saw any signs of AI use. During the past quarter, it has become routine, she said. Earlier this year, researchers at the cybersecurity firm SOFOS gained access to systems used

Starting point is 00:18:42 by a Russian-speaking ransomware group calling itself Aurora, and they were able to observe things as the group evolved and become increasingly dependent on AI. At first, the hackers used AI to build tooling and infrastructure to host their ransomware attacks. By the year's end, they were using it to sniff around corporate networks they had hacked into looking for ways to break into other accounts. The Russian ransomware group also shifted over the course of the year from proprietary models like Anthropics to new open source ones like the Kimi models from Moonshot AI, said Colin Cowie, manager of threat intelligence with Sophos. The pace that they operate at is faster than the average human,

Starting point is 00:19:18 Kowie added, end quote. Ben Thompson just wrote about this whole thing, and he has a rather sobering take that essentially the public internet model is effectively dead due to saturation, algorithmic aggregators, and these AI security vulnerabilities, but that may open new possibilities, quote, I expect things to only get worse. All of software is built on an inherently creaky human authored foundation. The human factor meant the primary gate, and all of the software development was, did it work? Not is it secure from every possible privilege escalation or race condition, or the myriad of ways that software can act in ways not intended. The saving factor previously is that attackers were limited by human time and

Starting point is 00:20:03 ingenuity as well. AI, however, has limitless time and the ability to substitute iteration for cleverness. And it's getting pretty clever as well. It's not a surprise that this wave of vulnerabilities is coming to light and it's going to get worse before it gets better, which I do for the record expect to happen. After all, the good guys have AI as well, and in the long run, software will be better when it is rewritten by AI and defended by agents continuously. At the same time, what this entails is that the public internet, to an even greater extent than now, will be a battle zone at best, i.e. social media, and a wasteland at worse. Everything else. Some of this is economic, as AI consumes everything, both content and attention, without giving any of the

Starting point is 00:20:45 traffic back that Google did, but it is also technical. It was already a dodgy proposition to stand up your own site or app, which was the very promise of the internet, given the hacking risks and the age of AI. It's now madness. It is sad. When I was a kid, we called up BBSs that were hosted in people's homes. When I was in high school, we downloaded music from public FTP addresses. When I was in college, we set up our own websites. Anyone could set up a server, and that server was just as much part of the internet as any other server. That's simply not viable any longer, even if you weren't worried about making money. The internet as we knew it is dead. There are, however, green shoots of possibility, and once again, the answer is to go smaller. When anyone can make an app, the answer is

Starting point is 00:21:31 not to try and make a quick buck in the app store. In fact, the surge and slop will make the market worse for everyone. Rather, it's to make something for yourself and a small group of trusted friends and colleagues. My life is defined by the internet. I witnessed and participated in its evolution and maybe in some small way contributed to it. I certainly owe my livelihood and success to it. I bemoan its passing. And yet, in some ways, I am optimistic about what comes next. When it comes to economics or social interaction or now software, the only viable approach is to become smaller. Smallness at scale, though, means there is not one global market, but infinite local ones. Local might mean geographic or it might mean a private network, what many markets definitely

Starting point is 00:22:15 mean is many opportunities because economies of scale matter less than the ability to meet new needs that only arise at the level of association. This is where I come back to Detokeville. The internet is an American invention and has long been defined by American mores. The individuals who thrive on the internet, no matter their nationality, come across as very American in their iconoclasm and cringe. Beyond the individual, however, there is the association, and among the association, there is not a market, but infinite markets. Markets are just another word for needs and desires, and the mechanisms of meeting and fulfilling them. The end of the internet may mean the possibilities for creation are only just

Starting point is 00:22:55 beginning, end quote. Nothing more for you today. Talk to you tomorrow.

Tech Brew Ride Home - Anthropic's S-1 Just Dropped!

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