(Zero Hedge)—When Anthropic confidentially submitted its draft S-1 to the SEC back in June, it was clear there were many shocking numbers in the IPO prospectus which the company did not want made public amid speculation of massive ongoing losses, but few were prepared for what was leaked today to Reuters.
According to a copy of the IPO prospectus leaked by Reuters, Anthropic is making a massive bet that AI will transform the global economy more profoundly than industrialization, electricity and the internet. But, as Reuters correctly puts it, “the cost to get there will be staggering” – the company reported a net loss of $42 billion in 2025. And while revenue grew 12-fold in 2025 to nearly $4.6 billion, the company lost more than $8 billion on an operating basis, with compute spend soaring to $7.33 billion, accounting for 58% of its $12.65 billion in total operating expenses.
In other words, Anthropic lost almost $2 for every dollar it made in sales, and that trend is accelerating.
It gets worse: not only is the company’s revenue fleeting, it is controlled by just two customers on the margin. Anthropic said nearly a quarter of its revenue came from just two customers last year, and as part of its risk factors, warned that many of its largest clients were not locked into long-term contracts and could cut or stop spending.
But what is most concerning is the confirmation of what we said back in July: it was back then we laid out the reason behind the forceful push by the frontier models to commence regulatory capture against open-weight models, which we framed as follows:
The problem with the $2 trillion in circular AI financing is that it is all contingent on the frontiers (Anthropic/ OpenAI) being money good on their $1.5+TN in unfunded commitments. Which they won’t be if Chinese open LLMs grab market share. Hence the push against Chinese LLMs.
We doubled down on the massive amount of “unfunded spending commitments” by the big two frontier models, Anthropic and OpenAI, one month later when in response to the FT catching up to our previous reporting, we said that “Again: that $3 trillion in “unfunded spending commitments” (thank you AI SPVs) will never get funded when token prices for closed models collapse to open levels”
In other words, $1.5 trillion each, and about a third of that through 2030, or $500 billion in spending commitments.
Well, as Reuters reports, Anthropic’s massive unfunded spending obligations (for a detailed analysis of why this matters a lot, read “The Off-Balance Sheet Time Bomb Inside AI Hits $3.1 Trillion: Up $1.3TN In Three Months“) are precisely what we said they are to wit: Anthropic “plans to spend $518 billion on cloud, computing and infrastructure obligations in coming year, according to the prospectus.”
The problem: Anthropic already has massive amounts in (mostly) off-balance sheet debt, having stacked over $71 billion through special purpose vehicles to finance Google TPU chips. It also has a $15 billion credit facility and likely has many more unreported, off-balance sheet funding scheme that we are not aware of.
And to fund it all the frontier AI company had just $20.3 billion in cash as of Dec 31, 2025, a number which has likely declined if the company was forced recently to draw down on a secured credit facility.
Hence the urgency to raise a lot of capital as suddenly the well is looking awfully dry. The problem, of course, as we have discussed repeatedly is that Anthropic is coming to market at the worst possible time: just as token costs plunge to record lows…
… while demand for frontier tokens has slowed substantially for the first time ever (light blue line), with Chinese open-weight models grabbing market share thanks to their cheap, just as efficient models.
Needless to say, this could prove to be a disastrous combination for Anthropic.
Yes, there is Jevons paradox of course, but it is of little comfort to Anthropic if the only beneficiary of Jevons are Chinese models, and potentially Meta after the blistering launch of its Muse agentic platform. This is how Goldman framed the big problem for Dario Amodei (full report available to pro subs):
“Token demand growth will need to outpace declining token prices to support continued growth in investment spending. Frontier models are currently a key source of demand for hyperscaler compute. However, the rise of competitive open-source models has contributed to a decline in average token prices. Measures of frontier token demand slowed in July…”
These rapid and adverse changes in the AI landscape explain why both Anthropic and OpenAI are desperate to go public and raise much needed capital to plug at least partially the massive holes that have opened – one can only imagine the panic that will ensue among the hyperscaler ecosystem if it becomes obvious that the two primary sources of future spending commitments across the entire AI world, Anthropic and OpenAI are in fact, not money good.
And yet, realizing just how challenging raising capital would be, OpenAI has already pushed back its IPO to 2027, leaving just Anthropic with hopes of going public this year. However, Reuters reported recently that Anthropic’s public market debut is likely to be pushed to after the November US midterm elections; and if the very anti-AI Democrats sweep congress, the IPO will likely be shelved indefinitely.
There’s more bad news: not only is the company incinerating cash, it may suddenly find itself stuck rolling out new models, allowing Chinese open-labs to catch up. In recent days, Anthropic has confronted – and disclosed – evidence from its own research that increasingly autonomous AI models can behave in unexpected and potentially harmful ways, including sabotaging code, assisting fraud and manipulating information in controlled tests.
As a result of similar activity, OpenAI – which also confidentially filed for its own IPO in June – earlier announced it would scrap the release of its latest AI model – GPT-6.1 Astra – because, as the WSJ reported, the model “performed poorly on tests measuring alignment, or how well the model adheres to what humans would like it to do. Specifically, GPT-6.1 Astra showed higher levels of deception: It wasn’t always honest about telling users of the actions it did or didn’t take…. Another issue was what OpenAI calls “scope authorization,” meaning that GPT-6.1 Astra would push ahead on a task without asking the user for permission, and would at times reach for external tools and services even if it might be unsafe.”
How can any company, and especially one which has been in the Trump admin’s sights for much of the past year, possibly hope to come to market in expectations of a $2+ trillion valuation? The answer is it can’t, which is why we are now getting various trial balloons setting the stage for the first of many delays.
Meanwhile, the cash burn continues and there will come a point where either existing investors will have to throw much more good money after bad, or Dario will have to ram the IPO through, and risk a spectacular crash in the stock price.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
