How the Latest AI Leap Is Disrupting Business Models

Nathaniel Whittemore (0:00)

Back at the end of 2025, we got a set of model advances, which first seemed innocuously like just the next step of an incremental gain, but which, as we would discover a few weeks later, when people went home for the holidays and really started to experiment, represented something totally new in terms of the capability set. Those model jumps would lead to the agendic progress that has defined 2026, and now it seems we might be in a similar moment. More than ever before, people are having success decompiling software and particularly games and reconstituting them in new ways using models like Astra and Opus 5-5.

They were exploring what the implications are for the business model of these software and game companies and how they're responding to the new challenge.

The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.

All right, friends, quick announcements before we dive in. First of all, thank you to today's sponsors, KPMG, Harbor, Granola and Blitzi. To get an ad-free version of the show, go to patreon.com/aidailybrief, or you can subscribe on Apple Podcasts. And to learn more about sponsoring the show, send us a note at sponsors at aidailybrief.ai.

We kick off today with a category of story that is going to be frequent for some time, which is, of course, the latest pre-IPO revenue numbers from Anthropic and all of the discourse that surrounds it. On Wednesday, Anthropic hosted institutional money managers at their San Francisco office for a pre-IPO investor day. The event served as an opportunity to meet the executive team and learn more about the company. They reportedly handed out thinking caps and managed to avoid talking about existential risks, but all eyes were on the latest revenue figures delivered at a presentation towards the end of the day.

The Financial Times reports that Anthropic told the investors they'd recorded $16.8 billion in revenue in Q3, up 45% from their Q2 number. That seems to be the actual revenue generated, not an annualized run rate. However, presumably, it's still gross revenue counted before the revenue split with Amazon and other compute partners, as that is Anthropic's preferred accounting model. Anthropic also said that they were profitable on an adjusted basis, are generating positive free cash flow, and had 85% adjusted gross margins and 11% adjusted operating margins. Anthropic has typically excluded stock comp, training costs and revenue shares from their adjusted numbers.

In a little preview of how things are going to be when these companies go public, the report was treated like the most important company in the world was delivering their quarterly earnings report. And in many ways, that's not too far from the truth. The stock market has been shaky throughout the summer and early fall, so a lackluster IPO from Anthropic could have some serious consequences. Still, it is certainly unprecedented to see so much focus on revenue rumors from a private company. Some analysts on X were quick to call it a big flop, with tech stocks selling off after hours, Geiger Capital posted, not good enough, it's over.

Others wondered how in the world a 50% quarter-over-quarter growth rate was perceived as an underperformance. Abhi Desai of Krypton Research commented, market doesn't like 17 billion in quarterly revenue from Anthropic at this stage? Seriously? Adding a further wrinkle, after the initial number, Reuters added that Anthropic is expecting 110 billion in annualized revenue by the end of the year. Their Q3 numbers extrapolate out to 70 billion annualized, implying that Anthropic believes they have another 57% growth spurt coming in Q4.

Ticker Trends updated their live revenue chart, which has been pretty accurate over the past six months. It showed that revenue growth has been flat since the end of July, meaning Anthropic must see something big coming that will juice revenues into the end of the year.

Andrew Curran thought it was pretty obvious what that would be, posting, 110 billion is back on the menu. They must have a lot of confidence in their next model release, The Wizard, Fable 5.5.

As I said before, it is unusual in the extreme for Wall Street to be pitting their hopes on unaudited financials from a single private company. But that's how the market is trading right now. Anthropic is still planning on going public at a $2 trillion valuation sometime over the coming months and will reportedly ask for record breaking IPO funding. It's worth noting that there is an accounting benefit to getting the deal done quickly. Anthropic can go public with a financial disclosure up to 134 days old. So there's a strong chance they'll only include Q1 and Q2 numbers. That means the unaudited Q3 numbers reported on Wednesday will be the most recent information the market has. Of course, none of that matters if Fable 5.5 is a hit, and Anthropic can leak booming new revenue as a result. But right now is their window of opportunity to get the IPO done at top dollar. Continuing on, a lot of the big headlines from yesterday were in the market sphere. CoreWeave's bonds have reached distressed levels as NeoCloud funding dries up. On Tuesday, unsecured CoreWeave bonds maturing in 2032 plunged to 80 cents on the dollar in a rapid move. They're now beyond junk debt, trading at an implied interest rate of 15%, indicating the market is pricing a serious risk of default. Investor Chamath Palihapitiya posted a chart of the past four months of price action, showing a rapid decline from 10% rates. Elon Musk simply responded, yikes. The stock was also down 15% on the day, outpacing a 1.6% fall overall in the NASDAQ. AI bears are piling on the declining NeoCloud. DA Davidson analyst Gil Luria, who has referred to CoreWeave as the subprime tranche of the AI industry, warned the stock could go to zero if data center funding stalls. He argued that the company is destroying value at every turn, his phrase, by continuing to borrow, adding, If CoreWeave is borrowing at 9% and the best return they can get off that as a 5% return, it doesn't matter how much they scale. Borrowing at very high interest rates in order to build data centers that are increasingly commoditized outside of the hyperscalers may not end up being a good investment. The more leverage we use to build data centers, the more risk we're bringing into the system. CoreWeave CEO Mike Intrader is fighting the market, claiming it's acting irrationally. In a staff memo shared with Bloomberg Intrader wrote, When you're building a new type of technology company, there will be periods of time when the market misunderstands. We are confident in our business model, our customers, the extraordinary quality of our execution and the relentless discipline around the financial engine we have built. The information however noted that Intrader's actions don't line up with his defiant words. According to SEC filings, Intrader has sold CoreWeave stock every week since April and other insiders have been cashing out as well. CoreWeave previously said in a statement that the company's co-founders were quote, making personal financial planning decisions that any responsible founder with concentrated holdings would make. And while that may be true, it is certainly not helping the stock pull out of this downturn. On the flip side, hold up the market dynamics. There is certainly no decrease in the demand for AI. In fact, Dutch chip fab manufacturer ASML says that the company won't be able to meet demand for several years. ASML is the leading producer of the complex machinery behind semiconductor manufacturing, referred to as tools. For high-end technology like the EUV lithography required for AI GPUs production, they hold a complete monopoly. ASML had previously delivered a plan to boost supply by 30%.