Gavin Baker calls Anthropic's S-1 an upside surprise, citing only $10bn burned and a roughly $67bn annualized revenue run rate.
Baker says only 250 Anthropic accounts spend over $10m, arguing AI spending is more diversified than critics like the New York Times report suggest.
Baker says the compute market has moved into contango, with GPU rental prices rising every day in October, so long-term contracts signed earlier now look underpriced.
Gavin Baker sees AI demand early, broad and compute-starved
Baker argues that AI demand is still early and broader than skeptics think. The Anthropic S-1 shows strong economics with little enterprise spend so far, and open-weight inference providers are growing even faster. Compute is scarce, with rising GPU prices and slow cluster energizing, so the winners are operators who can deliver capacity quickly.
Takeaways
Anthropic's S-1 was a clear upside surprise. Baker points to only $10bn burned, encouraging profitability and unit economics, and a run rate near $67bn. Half the Fortune 500 uses Anthropic, yet it is just 0.1% of their expenses, so enterprise AI diffusion looks very early.
Anthropic's customer base is more diversified than assumed. Baker reads 250 accounts above $10m in the S-1 and was surprised by a report that eight customers drive 80% of revenue. Hays counters with Ramp data that 1% of companies make 90% of spending.
GPU rental prices are rising and the market is in contango. Rental prices for essentially any GPU rose every day in October. One portfolio company bought 4,000 Blackwells for mid-2026 and now faces much higher prices for 4,000 more in September 2027.
Open-weight inference companies are growing fastest. Baker says Fireworks AI, Baseten, Together AI, Modal Labs and Cognition are growing faster than OpenAI or Anthropic. Atreides led Fireworks' last round, and its valuation multiple fell daily as the company grew.
Scarcity rewards operators who can energize clusters fast. Energizing new GPUs takes three to six months for many companies. CoreWeave runs well but locked in long-term contracts now below market. Contracts signed before May 2026 sit near $10 to $15 per watt.
Public listings should unlock new buying power. Baker says mutual funds face limits on illiquid stock, so SpaceX and Anthropic going public should free significant capital. He expects more of the 2027 buildout to be funded from operating cash flow.
Power and data centers are central to US growth. Baker says the US is re-industrializing and expanding electrical generation is job number one. He cites Loudoun County, Virginia, as the wealthiest US county and the one with the most data centers per capita.
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