Anthropic has set Wall Street abuzz by filing for what could be the biggest IPO in history. Michael Burry says the first good look at the AI startup’s business failed to convince him it’s a winner.
“There is a lot here but nothing that changes my view,” the investor of “The Big Short” fame told his Substack subscribers in a chat thread about Anthropic’s prospectus on Monday.
Burry said that “a lot changed in the developer landscape” over the last four months or so, but that’s not reflected in Anthropic’s Form S-1, which largely provides information through June 30.
He noted that revenue is “slowing,” citing Anthropic’s claim that third-quarter revenue was 86 times the $197 million it generated in the fourth quarter of 2024, or about $16.9 billion.
Anthropic’s revenue rose by 144% from the first to the second quarter of this year, but only by around 46% between the second and third quarters.
“Overall slowing of growth is not attributed to a decline in tokenmaxxing, but I did not expect that to be mentioned,” Burry wrote.
He was referring to the trend of maximizing AI token consumption, which has fallen out of favor in recent months given its costs.
“There is so much more going on than this S-1 addresses,” Burry said, recommending his subscribers re-read his articles on the subject.
In another comment, Burry wrote that large language models (LLMs) like Claude are “improving” and “already being used more efficiently and that trend will continue, to the detriment of their growth rate.”
Burry said he’s focused on the complexity and fragility of the debt financing many AI deals, hurdles to installing new graphics chips shoring up demand for older chips, a potential crash in memory chip prices once the shortage eases, compression and small language models (SLMs) reducing the need for computing power, and the “fundamentals behind not just companies but the deals they are doing.”
Responding to a subscriber who said that Big Tech companies are shifting from Anthropic’s AI models to their own and that tokens are rapidly being commoditized, Burry wrote: “Yes, that is what I hear.”
Anthropic did not immediately respond to a request for comment on Burry’s posts.
The contrarian investor shot to fame after his massive wager against the mid-2000s housing bubble was chronicled in the book and movie “The Big Short.” He pivoted from running a hedge fund to writing about his personal investments on Substack last winter.
A recurring theme of his work since then has been deep skepticism of the AI boom. He’s flagged slowing growth, overinvestment in microchips and data centers, aggressive accounting, hidden liabilities, and circular financing deals.
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