What surprised us in Anthropic's S-1: compute expense at 55% of revenue and a 29% founder lock-up release

Key figure: Compute and infrastructure expense: 55% of H1 2026 revenue, down from 201%. Source: Anthropic S-1, MD&A, Results of Operations, p. 150.

What surprised us in the filing

• Compute and infrastructure expense was 55% of revenue in H1 2026, down from 201% a year earlier. (S-1, MD&A, Results of Operations, p. 150)[1]
• Each co-founder may transfer up to 29% of locked-up shares from the earlier of Q1 2027 results or day 180. (S-1, Underwriting, Lock-up and Market Standoff Agreements, p. 324; Shares Eligible for Future Sale, pp. 308 to 309)[1]
• Operating cash flow swung to a positive $3.9 billion in H1 2026 from negative $1.5 billion a year earlier. (S-1, MD&A, Cash Flows, p. 169)[1]
• Anthropic estimates about 5% to 7% of 2026 revenue to Sept. 30 came from customers it found broke its terms. (S-1, MD&A, Components of Results of Operations, Revenue, p. 146)[1]

Who controls it

A single Class F share held by the seven co-founders’ LLC will carry 50.1% of the vote, capping Class A at 49.9%. The Long-Term Benefit Trust, with four trustees and one vacant seat, holds the one Class T share and elects a board majority. Class A holders “generally will not be able to affect the outcome” of votes, the filing says. (S-1, Prospectus Summary, pp. 13 to 14; Risk Factors, Risks Related to our Governance Structure, pp. 108 to 110; Our Governance Structure and Its Goals, p. 246; Principal and Selling Stockholders, p. 290)[1]

Other compute deals

Rent on Broadcom equipment leases totals about $161.2 billion excluding interest, and GPU deals with SpaceXAI, Nscale and Lambda total up to a further $206.4 billion, partly cancellable, by New Street’s sum. The filing’s total for contractual obligations is still blank. (S-1, MD&A, Contractual Obligations, pp. 170 to 173; Exhibit 10.11; New Street calculation)[1][4]

What drove the loss

The $72.4 billion first-half fair-value charge was “primarily driven by” higher values on convertible notes as the company’s valuation rose, the filing says. Another $26.6 billion of RSU expense is unrecognized; booking begins when the S-1 is effective. (S-1, MD&A, Results of Operations, pp. 148 to 149; Critical Accounting Estimates, p. 174)[1]

Courts and Washington

A $1.5 billion settlement of the Bartz authors’ copyright case was approved in July; music publishers, Reddit and Canadian authors and news publishers have suits pending. A district court largely ruled for Anthropic in August, but on Sept. 25 a split appeals court upheld a separate supply-chain-risk designation (Section 4713); Anthropic has asked for rehearing. (S-1, Business, Legal Proceedings, pp. 241 to 243; Note 13, pp. F-60 to F-61)[1]

Why it matters: Class A buyers would get a minority of the vote and no say over the board majority, while the cloud companies that sell Anthropic its compute also own its stock, distribute Claude and, for Amazon and Google, supply financing that can convert into new shares. (S-1, Risk Factors, pp. 74 and 109 to 110; MD&A, Convertible Notes, pp. 164 to 169)[1]

Exhibit 1. Minimum cloud spend Anthropic has committed to $ billions, “regardless of actual usage,” with each contract’s end date; first-half 2026 revenue for scale

Item	Period	$ billions
Google minimum spend	Apr. 2026 to Jul. 2033	114.5
Amazon minimum spend	May 2026 to Apr. 2036	110.0
Microsoft minimum spend	Nov. 2026 to May 2033	44.9
Revenue, six months ended June 30, 2026 (unaudited)	Jan. to Jun. 2026	16.3

Source: Anthropic S-1, pp. 148, 171 to 172. Chart: New Street.[1]

Exhibit 2. Suppliers that also fund Anthropic $ billions, available or outstanding as disclosed in the S-1; each settles in, or can convert into, nonvoting Class N stock

Partner	Arrangement	$B
Google	Undrawn note or stock facility, to Dec. 2030	20.0
Amazon	Undrawn note or stock facility	15.0
Amazon	Existing notes, convert at IPO up to a 12% cap	6.2
Broadcom	Undrawn notes for lease rent, 9% paid in kind	42.0
AMD	Commitment to buy stock as GPUs deploy, up to	5.0

Source: Anthropic S-1, MD&A, Liquidity and Capital Resources, pp. 164 to 168. Table: New Street.[1]

Notes

• Sources: refs. 1, 2 and 4 accessed Oct. 26, 2026, at 11:38 a.m. ET; ref. 3 at 11:45 a.m. ET. Times are US Eastern (EDT, UTC-4). Page numbers are the S-1’s printed page numbers.
• New Street calculations: $206.4 billion is the sum of SpaceXAI (up to $120.5 billion over terms extending into 2029), Nscale (up to approximately $44.6 billion, into 2033) and Lambda (approximately $41.3 billion, into 2034) (p. 172). This sum is not added to the Exhibit 1 commitments or to the Broadcom lease rent of approximately $161.2 billion, excluding interest (p. 172). Caveats the filing gives: after initial non-cancelable periods ending in January and March 2027, each SpaceXAI agreement may be cancelled by either party on 90 days’ notice; Lambda’s August 2026 agreement (approximately $34.9 billion) can be terminated if Lambda does not secure the facility lease; Nscale and Lambda fees accrue only as capacity is delivered and accepted. Not in any sum: further TPU compute from TPU providers including Google, which Anthropic estimates at approximately $125.0 billion to $150.0 billion for 2028 to 2031 (p. 171), and AMD systems the filing expects to exceed $20.0 billion if the full initial capacity is procured (p. 172). The contractual obligations table and its total are blank in this filing (pp. 170 to 171). Exhibit 2 shows separate arrangements and has no total. The Google facility may be reduced by up to $10.0 billion if Google exercises its option to buy up to $10.0 billion of Class N stock in a private placement at the IPO price; draws require compute and revenue conditions and Google’s stake is capped at 14.99% unless it waives the cap (pp. 166, 168 to 169). Amazon 2026 draws become available in $5.0 billion increments on compute milestones and settle in Class N stock at a 30-day average price (p. 166). The $6.2 billion of Amazon notes convert at $2.0928 or $5.0478 a share, or the IPO price if lower, as adjusted for the Sept. 17, 2026, 10-for-1 forward split; any amount above Amazon’s 12% cap, which Amazon may waive, rolls into new notes (pp. 22, 165). Broadcom notes may be issued only to fund lease rent, convert at the holder’s election at 90% of a 30-day average price, and carry 13% and convert at 85% if revenue conditions are not met (p. 167). AMD’s commitment comes from a July 2026 hardware supply agreement; the filing expects the first milestone in 2027 (p. 164). Control: the trust is the Long-Term Benefit Trust; the filing describes it as a body of five “financially disinterested” trustees (p. 14), and one of the five seats is currently vacant (p. 246). Class F’s 50.1% applies to matters submitted to stockholders generally, including the election of directors other than the Class T directors (p. 109). Class A holders “generally will not be able to affect the outcome of any matter submitted to a vote of our stockholders or the election of our directors, regardless of how they vote,” unless the co-founders cannot agree, in which case Class F votes in proportion to Class A (p. 109). The company says it does not expect to rely on the controlled-company exemption except for its nominating and governance committee (p. 110). Trust payments: each Trustee receives “annual cash compensation of $400,000,” and the chair receives a further $25,000; the company paid the LTBT $8,425,213 in the nine months ended Sept. 30, 2026; and in August 2026 it “made a $450,000 charitable donation to CNAS” (p. 248), whose Chief Executive Officer is a trustee (pp. 247 to 248). Results: compute and infrastructure is a nature-of-expense line that includes compute for research and model development; it was $8,945 million in the six months ended June 30, 2026, against $2,334 million a year earlier (pp. 149 to 150, F-40). Cost of revenue was $2,380 million against revenue of $16,286 million in the first half of 2026 (unaudited; pp. 148, F-40); by our calculation, revenue less cost of revenue was 85.4% of revenue in H1 2026, against 12.4% in H1 2025. The S-1 no longer presents gross profit (p. F-15). Second-quarter 2026 revenue was $11,555 million and GAAP operating income was $974 million (unaudited; p. 158). The filing says Anthropic delayed the start of pre-training a new frontier base model for more than a month for security and IP protection, to “further enhance our security measures related to preventing model weight exfiltration and protecting our intellectual property” (p. 52). Loss and stock pay: the fair-value change was $72,388 million in the six months ended June 30, 2026 (unaudited), which the filing says was “primarily driven by an increase in the fair value of our outstanding convertible promissory notes resulting from an increase in our enterprise valuation” (pp. 148 to 149). The filing calls the ownership cap and rollover mechanism an area of “significant judgment” in valuing the notes (p. 176). Unrecognized RSU expense was approximately $26.6 billion at June 30, 2026, with stock-based compensation of $2.2 billion in the first half (pp. 148, 174). Customers: cloud marketplaces handled 48% of first-half 2026 revenue and held 58% of net accounts receivable at June 30, 2026 (pp. 57, F-17). The 5% to 7% estimate covers revenue in the nine months ended Sept. 30, 2026, from customers Anthropic subsequently determined were using its models, platform and applications in violation of its usage policy or commercial terms; the filing says “This estimate requires judgment and may change” and that it expects that share “to decline in future periods” after it enhanced detection and enforcement, in particular in August and September 2026; it adds: “however, the timing and magnitude of any resulting adverse effect on our revenue and revenue growth are uncertain” (p. 146). No customer exceeded 10% of revenue and the top five were approximately 25% in the nine months ended Sept. 30, 2026 (p. 57). Shares: Anthropic contributed 846,840,960 Class N shares, 5% of fully diluted shares as of June 30, 2026, to its wholly owned Anthropic Public Benefit Fund, and may issue up to 2% more each time the share price rises 50% above the prior milestone (pp. 13, 144). The co-founders’ 365-day lockup ends on the earlier of two trading days after third-quarter 2027 results or the 365th day, with timed earlier releases (p. 309). The 29% applies to each co-founder together with the other signatories to that founder’s lock-up agreement, as allocated among them, and begins on the earlier of the second full trading day after first-quarter 2027 results or the close of the 180th day; the underwriters’ representatives may release locked-up securities early, in whole or in part, at any time (pp. 308, 324). The co-founders appear in the principal and selling stockholders table; the shares each will sell are blank (p. 290). Proceeds are for general corporate purposes, including compute and infrastructure and hiring, and partly for tax withholding on RSU settlement (p. 125). Legal: the Bartz settlement of $1.5 billion plus interest was approved in July 2026; $1.2 billion was in current liabilities at June 30, 2026 (p. F-60). On Aug. 27, 2026, the Northern District of California largely granted summary judgment for Anthropic on the Department of War actions; on Sept. 25, 2026, a D.C. Circuit panel ruled 2-1 that the Section 4713 designation was proper, and Anthropic petitioned for rehearing en banc (p. 243). Blank in this filing: the price range, share counts, net proceeds and the total of contractual obligations. First-half 2026 figures are unaudited.