Why Steve Eisman Isn't Buying Anthropic's IPO

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There is a scientifically documented correlation between listening to podcasts and curiosity. So since you're here, you probably enjoy discovering new things. One great place to indulge your curiosity is TikTok. Whether it's how to forecast volcanic eruptions, strange phenomena that the James Webb Space Telescope picked up near the beginning of time, or a literal deep dive into the universe, or a deep dive on the ocean's deepest reefs, TikTok has a wealth of fascinating videos just waiting to be discovered. Your next discovery is waiting on TikTok. Learn more at TikTok.com slash discovermore. Money markets matter. If money is evil, then that building is hell. The show goes on! The folks in Newark watch the show! Welcome to Prof G Markets. I'm Ed Elson. It is October 28th. Let's check in on yesterday's market vitals. The major indices climbed with tech rallying for a second day. All eyes will be on Microsoft and Google's earnings tonight. Brent crude was volatile again, but ended the day around $114 per barrel. The yield on 10-year treasuries was stable, ahead of the Federal Reserve's interest rate decision out later today. And finally, Meta shares declined nearly 2% following the completion of its $25 billion stock sale. The sale was part of its plan to raise nearly $100 billion in equity for its AI ambitions. Reportedly, though, the offering was five times oversubscribed. Okay, what else is happening? As we discussed yesterday, Anthropix's highly anticipated S1 is out, and investors are still digesting the filing. Today, we wanted to get another opinion, about the company's upcoming IPO and some of the questions that have gone unanswered, including its financial feasibility, Anthropix governance, and also the state of the AI bubble at large. So, here to break it down is one of our favorite guests, Steve Eisman, the legendary Big Short investor and host of The Real Eisman Playbook. Steve, great to see you. I'm going to start general. What did you make of this filing? What jumped out to you? Well, the thing that jumped out to me was the fact that the company is a global investor. Well, the thing that jumped out to me the most were two things. The first was, there's an awfully long list of future capital commitments that add up to something, I mean, it depends what you include, don't include, $800 to $900 billion. You know, when you're at $800 to $900 billion, what's $100 billion amongst friends? It doesn't really matter. So, that's just one thing that is, I don't know if the word is concerning, but just the way these people think about it. I don't know if the word is concerning, but just the way these people think about it. The way these people operate is, you know, that's just what they do. So, that's the first thing. What I thought was even more interesting was that the numbers are only through the second quarter. Now, I have heard that they're going to have to put out third quarter numbers before they go public, although I'm not 100% sure that's correct. However, there are reports out there that at least have the revenue for the third quarter as well as the compute infrastructure. And that actually tells a tale, because for those of us who have been paying a lot of attention, as we all know, in the first half of this year, token maxing was at its height. And for those viewers who don't know what that is, token maxing is where basically software engineers were ordered by their companies to use AI 24-7 and to hell with the costs. But after the first half of the year, people got a lot more cost-conscious. The Chinese open-weight models took more market share. And so, what I wanted to see was what happened in the third quarter after the token maxing was over. And so, if you look at the fourth quarter, first quarter, second quarter, and third quarter, and you look at two statistics, the sequential revenue increase and then the revenue divided by the compute, infrastructure expense. So, if you go to the fourth quarter of last year, which was really just before token maxing really took off, revenue growth was 43%, and the ratio was 0.69 times, which meant, of course, that revenue was less than compute expense. Okay. First quarter, token maxing takes off. Revenue growth goes from 43% sequentially to 135% sequentially, and the ratio goes from 0.69 to 1.5%. 0.4. Impressive. And then in the second quarter, which was the height of token maxing, revenue growth jumps again to 147%, and the revenue to compute goes to 2.08 times. Now, let's talk about the third quarter. Third quarter, token maxing is over. Sequential revenue growth goes from 147% to 45%, and the revenue divided by compute goes from 2.08 to 1.5%. That tells you something. That tells you that the end of token maxing has had an impact. The other thing that I have heard, I haven't been able to confirm it, is that sometime in October, Anthropic cut its prices by about 50% to try and get back a lot more market share. Whether that's going to come out on the roadshow, I don't know, but it certainly would be the data points that I would be focused on the most. Something that was notable looking through the filing is that a lot of the data points that I would be focused on the most, , , , ,, this gets to sort of a larger question about this filing, which is like, how much does it actually tell us, is really the question that I'm trying to get at, because you point out the future compute commitments, which, for me, that was the most important thing that I read. I'm like, okay, they have narrowed their losses, they're getting to a better place, that's good. Oh, but hold on, $800 billion coming down the line. And in addition to those $800 billion in compute costs that we're going to see at some point, they also say that they're going to significantly increase capital expenditures, which to me tells me they're going to just build data centers, which seems like a massive pivot, a massive change to the business. I don't know if they're going to build data centers, but they're certainly going to be spending a lot more money, either maybe they'll rent, you know, and that'll be. That'll cost them a ton. I don't know. But clearly, I agree with you for what you're saying, that, put it this way, when you commit to $800 billion, your expenses are going up. How much they're going up, we don't know, because I'm not the CFO of the company. I don't know how this is all going to play out. I read one report from someone who argued that by next year, they'll be spending $80 to $100 billion in CapEx. And so, you know, I don't. But I don't even know what that. Is that expensed? Or does that go on the balance sheet? You know, it's unclear. But it seems as though eventually that's going to have to show up in the income statement in some way, whether it's through depreciation or whatever it is. It's going to show up. And it's not showing up right now. The way it shows up is at the very bottom of the document as basically like a footnote. So that's going to be a massive change to the business. And then, as you say, it does seem that the current revenue is a pretty important. Or current Q3 revenue is a pretty important item that tells you something about the future of this business over the next, you know, near future, over the next 12 months. What I can't tell is, did this S1, did it really tell us much about this company? I think it's very, very backward looking because it's giving you a snapshot of the company at the height of token maxing. and before Chinese open weight models really started to take market share more you know imagine like i only had a i found a report that said that that um anthropic cut prices by 50 to gain back market share i don't know if that's true let's assume it is that's an incredibly important data point before you go public that you just cut prices by you know this is not uh it's 47th street we know we cut them we cut prices in half you know and we're bragging you know cutting prices in half could be dangerous you know that the question then would be okay you cut prices in half how much more market share did you get did your revenue go down did it go did you take so much market share that your revenue went up i don't know but but you know that would seem to me to be the most important question to be asked i mean the the question for investors the ultimate question is do you invest in this thing oh i have an answer for that you that i can answer you tell me no you kind of got to the point quickly i was going to ask you would you need to know the answers to the questions that you just brought up before investing i assume the answer is yes you would well yes but i think i look to me the bigger the the bigger bigger bigger question is it just seems you know that there are no moats around this business i mean if it's the case that they actually did cut prices by 50 that would reinforce the concept that there are no moat so that the only way you're going to gain shares price being in a business where you are committed to spend 800 billion dollars where your entire franchise is just simply based on price is dangerous there is another uh interesting angle uh on this s1 which was the governance structure oh please that is ridiculous i mean what's there to talk about you're you're a shareholder in this company you have no rights okay let's move on if you want to play if you want to invest in that company that's up to you you know it's been disclosed you have no rights zero rights you want to play play you don't want to put you know if you think that's a very important then you won't play just to clarify for our listeners so there are multiple classes of stock here you've got you've got the regular voting shares you've got the regular non-voting shares then you have this class t share which is controlled by the what they call the long-term benefit trust and apparently this is sort of this committee that gets to choose the board of directors but most importantly there is also a class f share one single class f share which is controlled by the seven co-founders of the company and the share most importantly carries 50.1 percent of the vote how much does that matter uh when evaluating an investment like this like you know beyond if you would like to have a vote does it tell you something larger about this company and whether it's investable i don't think so yeah we could make this we could make the same criticism of meta and you know meta as a stock generally has done very very well but um this is what goes on in tech world they don't like their own shareholders that's basically what's what's happening founder worship uh who in the past has institutionalized um it's supposed to go public at two trillion dollars that has been the expectation there has been some debate as to whether that price might be cut people were talking about one and a half trillion dollars what is your expectation uh for when this thing goes out i have no expectations i have no information on what i read in the papers do you have a view on investor sentiment i mean one thing that i can't quite figure out myself is do you have a view on investor sentiment i mean one thing that i can't quite figure out myself is did this filing make investors more or less confident in the business i think it actually made it more confident because people weren't pointing out that it's only going through the second quarter and what that meant so it's gonna be very interesting to see what sentiment looks like if if and i don't know if this happens they have to drop third quarter numbers in before they go public yeah the third quarter numbers could potentially change the game if that happens would you expect that would you expect that would you expect that the sentiment will the sentiment will the sentiment will turn quite precipitously i mean it should turn quite precipitously i mean it should turn quite precipitously i mean it should but you know but you know but you know we're not conducting a group therapy we're not conducting a group therapy we're not conducting a group therapy session with the investing world session with the investing world session with the investing world so i don't know how people that's all i so i don't know how people that's all i so i don't know how people that's all i want me too want me too want me too i don't know how it's got people going to i don't know how it's got people going to i don't know how it's got people going to react i never know i absolutely i love react i never know i absolutely i love react i never know i absolutely i love it when people you know some people it when people you know some people it when people you know some people they'll always say they'll always say they'll always say it's in the price it's in the price it's in the price it's in the price it's in the price it's in the price it's in the price and i always want to say how do you know and i always want to say how do you know and i always want to say how do you know like who did you ask did you take a poll like who did you ask did you take a poll like who did you ask did you take a poll like like on bases do you say that but like like on bases do you say that but like like on bases do you say that but people say this all the time people say this all the time people say this all the time and i and i always say i don't know just and i and i always say i don't know just and i and i always say i don't know just as we start to wrap up here any other as we start to wrap up here any other as we start to wrap up here any other things that you're looking at in ai things that you're looking at in ai things that you're looking at in ai world things that you think are world things that you think are world things that you think are especially important that we should keep especially important that we should keep especially important that we should keep track of well the other big thing to track of well the other big thing to track of well the other big thing to keep track of obviously is the price of keep track of obviously is the price of keep track of obviously is the price of coreweave's debt coreweave's debt coreweave's debt you know at 15 i think although i can't you know at 15 i think although i can't you know at 15 i think although i can't prove it prove it prove it i think it's prohibitive for them to i think it's prohibitive for them to i think it's prohibitive for them to raise debt at 15 raise debt at 15 raise debt at 15 and build ai data centers but you know if and build ai data centers but you know if and build ai data centers but you know if it gets worse it gets worse it gets worse then they're really out of business you then they're really out of business you then they're really out of business you know they know they know they their business model is basically we their business model is basically we their business model is basically we raise debt raise debt raise debt we build ai data centers we build ai data centers that's it that's the entire business that's it that's the entire business that's it that's the entire business model model model and if they can't raise debt they can't and if they can't raise debt they can't and if they can't raise debt they can't build ai data centers that's build ai data centers that's build ai data centers that's really the now maybe you know nvidia really the now maybe you know nvidia really the now maybe you know nvidia will come in and backstop the whole will come in and backstop the whole will come in and backstop the whole company you know it's totally possible company you know it's totally possible company you know it's totally possible but barring that you know i would be but barring that you know i would be but barring that you know i would be watching the watching the watching the dev markets steve eisman is the dev markets steve eisman is the dev markets steve eisman is the legendary big short investor and host legendary big short investor and host legendary big short investor and host of the real eisman playbook which is a of the real eisman playbook which is a of the real eisman playbook which is a great podcast i highly recommend it great podcast i highly recommend it great podcast i highly recommend it steve always appreciate your time thank steve always appreciate your time thank steve always appreciate your time thank you after the break the state of play in the after the break the state of play in the after the break the state of play in the autonomous vehicle race autonomous vehicle race autonomous vehicle race and for even more markets insights you and for even more markets insights you and for even more markets insights you can subscribe to my weekly newsletter can subscribe to my weekly newsletter can subscribe to my weekly newsletter simply put go to edward elson.substack.com running a business shouldn't feel like running a business shouldn't feel like running a business shouldn't feel like surviving a software group project one surviving a software group project one surviving a software group project one app for accounting another for inventory app for accounting another for inventory app for accounting another for inventory another for sales and somehow none of another for sales and somehow none of another for sales and somehow none of them talk to each other that's where odo them 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curiosity so since you're podcasts and curiosity so since you're podcasts and curiosity so since you're here you probably enjoy discovering new here you probably enjoy discovering new things one great place to indulge your things one great place to indulge your things one great place to indulge your curiosity is tick tock whether it's how curiosity is tick tock whether it's how curiosity is tick tock whether it's how to forecast volcanic eruptions strange to forecast volcanic eruptions strange to forecast volcanic eruptions strange phenomena that the james webb space phenomena that the james webb space phenomena that the james webb space telescope picked up near the beginning telescope picked up near the beginning telescope picked up near the beginning of time of time of time or a literal deep dive on the ocean's or a literal deep dive on the ocean's or a literal deep dive on the ocean's deepest reefs tick tock has a wealth of deepest reefs tick tock has a wealth of deepest reefs tick tock has a wealth of fascinating videos just waiting to be fascinating videos just waiting to be discovered your next discovery is discovered your next discovery is discovered your next discovery is waiting on tick tock learn more at waiting on tick tock learn more at waiting on tick tock learn more at tick tock dot com slash discover more we're back with prof g markets earlier we're back with prof g markets earlier we're back with prof g markets earlier this week we discussed the future of this week we discussed the future of this week we discussed the future of tesla and its foray into the lucrative tesla and its foray into the lucrative tesla and its foray into the lucrative autonomous robotaxi business autonomous robotaxi business autonomous robotaxi business but while tesla rolls out their but while tesla rolls out their but while tesla rolls out their robotaxis across the country they face robotaxis across the country they face robotaxis across the country they face one major obstacle and that is one major obstacle and that is one major obstacle and that is competition competition competition companies like alphabet amazon and uber companies like alphabet amazon and uber companies like alphabet amazon and uber are also looking to capitalize on the are also looking to capitalize on the are also looking to capitalize on the future of transportation future of transportation future of transportation so we would like to take a moment to so we would like to take a moment to so we would like to take a moment to attempt to answer the following question attempt to answer the following question attempt to answer the following question who is actually winning in autonomous who is actually winning in autonomous who is actually winning in autonomous vehicles and what does the future of vehicles and what does the future of vehicles and what does the future of autonomous actually look like today autonomous actually look like today autonomous actually look like today we're speaking with our very own we're speaking with our very own we're speaking with our very own research team associate dan chalon who research team associate dan chalon who research team associate dan chalon who recently presented on this very topic recently presented on this very topic recently presented on this very topic on our prof g plus on our prof g plus on our prof g plus substack it was a great presentation i substack it was a great presentation i substack it was a great presentation i learned a lot so that's why i wanted learned a lot so that's why i wanted learned a lot so that's why i wanted to get into it today dan i see you every to get into it today dan i see you every to get into it today dan i see you every day day day but thank you for joining me on the show but thank you for joining me on the show but thank you for joining me on the show i just want to start with a general i just want to start with a general i just want to start with a general question which you started with in your question which you started with in your question which you started with in your presentation which i thought was very presentation which i thought was very presentation which i thought was very helpful which is helpful which is helpful which is how big of a problem how big of a problem how big of a problem are vehicle deaths today? In other words, make the case for us why autonomous is actually a good thing. It's sort of hard to conceptualize just how dangerous driving is because we as Americans do it so often. We spend on average about an hour a day behind the wheel. But every year, 40,000 Americans die in car crashes. Globally, that number is over a million. It's the leading killer of people ages 5 to 29. And I think why those numbers are relevant to autonomous vehicles is because 94% of car crashes are due to human error. So really, driving isn't dangerous because cars are dangerous or roads are dangerous. It's because humans are dangerous. So I think that's why autonomous vehicles are a very exciting technology because it can allow us as Americans, as people around the world, to take something that we need to do every day and make it significantly safer. Looking at the players in this industry, obviously, Tesla is getting into robo-taxis the rollout has been, I don't even know what to say about it anymore. It's taken a while. Who are the actual players in this industry, though? And how do they all stack up against each other? Yeah, so I think we can start with Tesla. And to understand Tesla's autonomous business, you really have to split it into two. So the first is the consumer side. And that's FSD. That's the software that Tesla sells directly to Tesla owners, which allows Tesla drivers to have the car drive itself under supervision. Currently, about 1.7 million people globally pay for it. But then there's the other side of their autonomous business, which is their robo-taxi business, which is their autonomous ride-share business that's in direct competition with Waymo and other players here in America. So here they're doing well. They're scaling very quickly. They have a fully commercial service in six cities. And just last month, they started putting cybercabs on the road, which are their, you know, on purpose-built autonomous vehicles with no steering wheel. So despite the fact that they are moving very quickly, they are very clearly in second place to Waymo. Currently, Waymo does about seven times the amount of miles that Tesla does weekly. They're in 15 American cities. They're doing 500,000 paid rides weekly. So they're very far in the lead. I think there are two others worth mentioning. The first is Zoox, which is owned by Amazon. It's their self-driving startup. They're currently in two American cities. And they have about 100 vehicles on the road. So they're pretty early stage. And then the last one is Uber, which actually doesn't have any vehicles or technology on its own. But through partnerships with other autonomous vehicle companies like Zoox, like Waymo, it's able to facilitate autonomous rides in five American cities currently. I'm surprised to hear you say that the Tesla rollout has been quick, because you say those numbers, those Waymo numbers, which are phenomenal compared to Tesla. I guess what has been promising about the Tesla rollout of their Robotaxi, specifically in contrast to Waymo, which on the outside, it seems like Waymo has been a lot more successful? Yeah. So I think the thing that Tesla has really done well in these past few months is scale up very quickly. For a while, sort of in typical Elon Musk fashion, we were getting promises about an autonomous service rolling out in Austin and California. When in reality, you'd call a Tesla Robotaxi and there'd actually be a human safety monitor behind the wheel. In the past couple months, they've ditched the safety monitors in six cities. Like I said, they're fully commercial, fully autonomous. But the biggest advantage that Tesla has over Waymo is cost. So those Tesla cybercabs cost about $25,000 to produce, whereas Waymo's cost upward of $100,000. They have a sort of much more thorough sensor load in the vehicles that they produce, which makes them more expensive. It makes them harder to build and take longer to build. So Tesla's really ramped up. Now, still, I don't mean that to say that Tesla is in first place in any sense. Tesla is still significantly behind. But just in the past couple months, they've gone from kind of not existing in terms of their Robotaxi service to having something operational. On an international level, who is winning the EV race? It sounds like you believe that the winner currently is Waymo, but Tesla seems to be beginning to catch up. On an international level, U.S., China, who's winning autonomous? Yeah, so I think internationally, it's definitely between the U.S. and China. There are countless companies in China trying to do autonomous driving. I think where China is really winning is in manufacturing, because they have the ability to manufacture electric vehicles and autonomous vehicles at a cost that's much lower than any American company. But in terms of commercialization, America is definitely in the lead because there's no company in China that's doing as many paid rides as Waymo is. So we're sort of very clearly in first place in that aspect. The thing that I think is important to know is most likely we will never see each other's technology. America's never going to allow Chinese self-driving companies here in America. China won't allow American self-driving companies in China. The place where the race is really going to play out is in the Middle East and Europe, where those countries can kind of choose which country to get their autonomous driving technology from. And I think what's interesting so far is in the Middle East and in Europe, they've by and large gone with Chinese companies, whereas American companies like Waymo or Tesla have not been able to expand internationally. Do you think that is a Chinese technology being better or maybe it's a geopolitical strategy? I mean, I can't tell if that says something about China's influence on Europe and the Middle East geopolitically. What is your read? I think they already have entered those countries with their electric vehicles and their vehicles in general, which has allowed them to get sort of a foothold in the market there. But I also just think it's it's it's I think it speaks to American companies strategy of focusing on the domestic battle first. Right. Waymo does have plans to expand internationally, but they're really focused on rolling out here in America first. One of the other obstacles for autonomous has been regulation. What is the regulatory picture in America look like right now? So it's currently very fragmented, and that's because it's all happening at the state level. There's really been no federal framework or action sort of passed by the federal government. to guide these companies on how they should be regulated. And that is a very messy process because it means each of these companies needs to go through the painstaking process of lobbying each state individually to be able to test and then to, you know, be able to operate non-commercially and then commercially and then expand from there. And so what that has produced is a pretty large lobbying battle between, you know, drivers unions and unions at the state level and then these robo-taxi companies. We've also seen Waymo dramatically ramp up their federal lobbying spend in the past couple years. So I think the political battle is going to continue to play out in America. I do think it's also interesting to note that autonomous vehicles are not sort of insulated from the political backlash that the rest of, you know, AI and autonomous robotics in general have received here in America. We talk about it on the show often. It's the same force that has sort of prevented data centers from being able to do that. And so I think it's also interesting to note that there are a lot of people who think that, you know, AI is souring in many local communities. So public opinion on AI is souring. And I think we're seeing that reflected in what people think about autonomous vehicles. There's a really interesting poll here. Gallup polled Americans in 2018 about whether or not they think that some amount of autonomous vehicles improve road safety overall. And at that time, about 52% of Americans agreed. They were in the same poll last year, and the share of Americans who agreed actually went down by 12%. And that's despite the fact that, you know, in that time, autonomous vehicles went from basically not existing to getting exponentially safer every single year. So it's really, you know, it's impossible to divorce people's sentiment about AI and this technology in general from the technology itself. Despite the fact that it is statistically safer, is my understanding. As we wrap up, if you wanted to make bets on autonomous, say someone's listening to their podcast, they're like, oh, I want to bet on this thing or invest in this. I shouldn't say bet. How would you do it? What are the trades or the investments that you would look at? It's pretty early days for autonomous vehicles. But as the technology progresses, I think there's going to be a couple of places you can look for winners. The places where I'm going to be looking is first in the sort of picks and shovels play, which are companies that are actually making the components that go into these vehicles. I think the first opportunity here are going to be companies that make LiDAR. And I think that's going to be the first opportunity here. And those are those expensive sensors that are in Waymos and Zookses and pretty much every autonomous vehicle. And I think the reason why there's an opportunity there is because currently 95% of passenger car LiDAR sensors, which are in these autonomous vehicles, are made in China. And obviously, that's a huge national security risk. Those Chinese made sensors are already banned for military use. And there's actually bills in Congress that would ban them for civilian use as well. And I think that's going to be the first opportunity there. So if that happens, there would be a huge opportunity for American companies to come in and manufacture those sensors. So there's going to be some winners there. The second is going to be in the maintenance and upkeep of autonomous vehicles, right? Because unlike Uber and Lyft, where drivers themselves are maintaining their vehicles, these companies are going to have to maintain thousands of vehicles at scale across the country. You know, they need to charge the vehicles, they need to park them, they need to clean them. Currently, there are a few startups that are looking to do this as a service for those companies. But there is an industry here in America that I think is going to see a huge windfall from this need, which is the car rental industry. You know, if you think about car rental companies, they already have these facilities around the country sort of ready to go. And just last week, actually, Hertz announced that they're standing up a new leg of their business to do exactly that, to service autonomous vehicles. So I think we're going to see more car rental companies sort of pivot in that direction as well. And then I think the last winner is going to be the trucking industry. Because if you look at trucking, about 44% of trucking's marginal costs come from driver compensation and benefits. So if you can automate those costs, you know, it's obviously very lucrative. There's currently a company called Aurora that's testing self-driving on American roads. And then Tesla also produces a semi-truck, which they say will eventually have full self-driving capabilities. Although it doesn't quite yet. Dan Shalon is our research associate at ProfG Media. Really fascinating stuff. Thank you. If you want to watch a replay of the live stream that Dan did on this industry, it's like an hour long, I want to say. It's super in-depth, but it's super informative. You can go to profgmedia.com, click on the ProfG Plus tab. We do a lot of these more in-depth, deep dives over on Substack. Dan? Thank you. I'll see you tomorrow. Appreciate your time. Thanks for having me, Ed. Before we end, let's return to Anthropix S1 filing, which has polarized a lot of investors. Some look at the revenue growth, and they say that the company is incredible. Others look at the net losses, and they say it's terrible. The largest IPO in history is bringing out a lot of emotions from investors, which I get. But it also makes me. It makes me think that maybe this IPO is fundamentally misunderstood. So to end this episode, I would like to do a little bit of myth-busting on Anthropix, and more specifically, on Anthropix IPO. So, number one. Yes, the company did rack up an $80 billion net loss in the first half of the year, which sounds bad, but no, that doesn't actually matter. Why? Because those losses were a product of the increase in the fair value of. Anthropix convertible notes. In other words, investors lent Anthropix money, and in return, those investors later received equity. And because of how accounting laws work, Anthropix technically had to write that up as a widening expense, but in reality, it was simply a reflection of how valuable Anthropix had become in a remarkably short period of time. So the $80 billion net loss, that's a red herring. Okay, number two. Yes, Anthropix's first half revenue grew fast. 1,300% year over year, which is incredible, but no, as Steve points out, it has not kept up that extraordinary growth, not even close. The part that the S1 in many places left out is that revenue growth slowed down significantly in Q3. As Steve said, it was 150% quarter over quarter in Q2, and then less than 50% in Q3. Now, that's not necessarily bad, but it does show that maybe the AI frenzy is beginning to come. And finally, number three. Yes, Anthropix did narrow their losses quite significantly. It was more than $2 billion in the first half of last year versus less than $700 million this year. That is good, but no, that trajectory is not going to continue. The most important numbers in the filing came at the end of the document, where we learned that Anthropix has signed more than $800 billion in future compute commitments, which are reflected in the current income statement, but all of which eventually will be. That includes a $110 billion contract with Amazon, a $115 billion contract with Google, a $161 billion contract with Broadcom. What it doesn't include, however, are the billions of dollars in capital expenditures, which they are about to register probably to build out their own compute. That's not something I believe because I had a hunch about it. I believe that because they literally told us that in the S1. In other words, that $800 billion number is actually probably going to be a lot higher. And as a result, this company's losses are about to explode. Now, did they time this IPO so that we wouldn't have to look at those losses on the income statement? Possibly, but that's a theory. It's not a fact. And this segment is specifically devoted to things that we know for sure. The truth about the Anthropix S1 is that the income statement doesn't tell you the full story. It doesn't mean it's a bad company. It doesn't mean they don't have it. It doesn't mean they don't have an incredible product. They do. But it does mean that there is still a lot of risk. The business model hasn't been figured out yet. And until it is, we must treat Anthropix with the appropriate level of caution. It's still a highly risky venture bet. Things could still go spectacularly wrong. What it certainly isn't is a proven, safe corporate investment, something that its potentially $2 trillion valuation might suggest. In sum, not much. Not much has changed. But whatever picture the profitability is painting right now, all I can tell you is that next year, that picture is going to look drastically different. Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dan Chalon, Kristen O'Donoghue, and Mia Silverio. And our social producer. is Jake McPherson. Thank you for listening to Profiting Markets from Profiting Media. 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