Why Anthropic is On Track to Beat OpenAI to a Profit

SPEAKER_1 (0:00)

Not all breakthroughs make noise. Some are made of sound. It's called histoptrepsy. Developed at the University of Michigan, that's now an FDA-approved non-invasive cancer treatment for liver tumors. No scalpels, no radiation, just sound, breaking down barriers to life-saving care. For the public good, look to Michigan. See more solutions at umich.edu. Thank you.

Caitlin McCabe (0:32)

The bill to reopen the government now heads to the House, as some Democrats turn on Chuck Schumer. Plus, we take a look at how AI startup, Anthropic, is poised to turn a profit more quickly than OpenAI. And we explore Europe's unsettling new reality. It's caught somewhere between war and peace.

Bertrand Benoit (0:52)

We see a wave of sabotage acts and surveillance activity, spying, that seems to be targeting NATO members in Europe that are hard to explain other than as attempts to intimidate and divide and weaken.

Caitlin McCabe (1:08)

It's Tuesday, November 11th. I'm Caitlin McCabe for the Wall Street Journal and here is the AM Edition of What's News. The top headlines and business stories, moving your world today. A spending package to reopen the government has officially passed the Senate, paving the way for the longest shutdown in history to possibly end within the next few days. The passage last night follows a dramatic procedural vote Sunday that saw eight members of the Democratic caucus break with their party and vote alongside Republicans.

John Thune (1:44)

This has been a very long road, quite literally the longest shutdown in history. I am very, very happy to be able to say that we are coming to the end.

Caitlin McCabe (1:55)

Republican Senator Majority Leader John Thune speaking there, following the legislation's passage yesterday. Attention now turns to the GOP-controlled House, which could vote on the measure as soon as Wednesday. Here's Republican House Speaker Mike Johnson.

Mike Johnson (2:10)

At the very moment that they do that final vote, I will call all House members to return to Washington as quickly as possible. We'll give a 36-hour formal and official notice so that we can vote as soon as possible to pass the amended CR bill and get it to the president's desk.

Caitlin McCabe (2:28)

Within the Democratic Party, focus is now turning to Chuck Schumer, with angry progressive voters and party activists blaming the Senate minority leader for failing to keep his party in line. For weeks, Democrats had been united in demanding that Congress extend enhanced Affordable Care Act subsidies in exchange for their votes. Journal Washington reporter Richard Rubin says now the party has little more than a guarantee that a vote on the matter will happen by the second week of December.

Richard Rubin (2:57)

We've seen very angry statements coming out of House Democrats and Democrats across the country because they basically see this legislation, this compromise, as not a compromise, as not accomplishing the goal they set out for on health care and not getting enough out of the shutdown. So Democrats who voted for this and are advancing this forward are Democrats who are retiring, they're Democrats who aren't up for election next year. The real electoral pressure, the energy among Democrats would have been to fight more, to fight harder, to keep the shutdown going. And you'll see that reflected in all of these votes as we go forward through this week.

Caitlin McCabe (3:35)

Even if the government reopens in the coming days, air travelers may not see immediate relief. Thousands of flights were delayed or canceled yesterday, and more pain is expected. The president of the Association of Flight Attendants, CWA, told CNBC yesterday that, there will be a hangover from this as we try to put the system back together.

Now, investors may be getting some answers to the question many have been asking. When will AI companies begin to turn a profit? We've been looking at the finances of Silicon Valley's two largest AI startups, with Anthropic on pace to turn a profit far more quickly than rival OpenAI. Documents obtained by the journal show that Anthropic expects to break even for the first time in 2028, while OpenAI forecasts its operating losses that year to swell to about $74 billion. Tech reporter Sam Schechner explains why.

Sam Schechner (4:34)

The two companies are taking very different approaches to growing their business. OpenAI is spending really heavily on building out infrastructure, and they have thinner margins and they are predicting enormous demands for their services going into the future. On the other hand, Anthropic is going for a fatter margin business. They are spending less on infrastructure and focusing on coding, for which their clawed chat bot is effective, and on business customers rather than a consumer business.

Caitlin McCabe (5:06)