LONDON, March 10 (Reuters Breakingviews) - Anthropic’s battle ​with the Pentagon carries immensely high stakes for the future of artificial intelligence. Along the way, though, it ‌has revealed something just as interesting about the prosaic realities of accounting.

In a court filing, opens new tab, Anthropic Chief Financial Officer Krishna Rao said revenue has exceeded “$5 billion to date.” This figure sits awkwardly beside the Claude developer’s “run-rate” claims: $14 billion, opens new tab as of February 12, rising to $19 billion by month’s end. The gap reflects ​Silicon Valley’s habit of touting metrics that assume a lot about the future.

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The $5 billion figure refers to GAAP revenue generated ​from 2023 through to December 2025, a person familiar with the matter told Breakingviews; the $19 billion ⁠is an extrapolation. Anthropic defines “run-rate revenue” in two parts. Use the last 28 days of sales from customers charged on a ​consumption basis and multiply it by 13. Then, multiply the monthly subscription take by 12, and add the two together.

These snapshots are ​inexact, capturing or missing sudden consumption spikes or dips. It helps explain how $14 billion can become $19 billion within weeks.

Big businesses account for 80% of Anthropic’s revenue, and they tend to be billed for consumption, making the headline run-rate highly sensitive. Pricing changes, promotional credits or attempts to optimize usage ​all have an impact. This makes calculating trailing revenue from reported numbers error-prone. Still, working backwards from Anthropic’s run-rate at various ​times, it’s clear most sales have been generated in recent months.

How metrics are defined also complicates comparisons. OpenAI’s annual recurring revenue, which it said, opens new tab reached $20 ‌billion as ⁠of the end of December, is meant to specifically capture subscriptions rather than metered sales. Further twists include revenue-sharing agreements with partners such as Microsoft (MSFT.O), opens new tab.

Run-rate figures can be useful when companies start small and are growing quickly. But it also makes it easier to tout brief, rapid momentum in support of projections showing astronomical growth far out into the future.

Because the Pentagon has moved to ​blacklist Anthropic, these dangers are ​paramount. Anthropic Chief Commercial Officer ⁠Paul Smith said, opens new tab one customer paused discussions on a $15 million contract after the company was labeled a supply-chain risk, while two financial-services companies refused to finalize agreements worth a combined $80 million unless they secured ​broad cancellation rights. Anthropic has sued to challenge the designation.

No one is being misled. Until ​AI companies standardize ⁠how they report revenue and are upfront about potential volatility, however, their metrics risk looking like a plausible hallucination.

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Context News

• Anthropic on March 9 filed a lawsuit to block the Pentagon from placing it on a national security blacklist, escalating a battle with the U.S. ⁠government ​over usage restrictions on its technology.
• Anthropic’s all-time sales, since commercializing its technology in ​2023, exceed $5 billion, according to the company’s chief financial officer, Krishna Rao.
• On February 12, Anthropic said it achieved a revenue run-rate of $14 billion. The company posted a $19 ​billion run-rate at the end of February, Reuters reported.

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Editing by Jonathan Guilford; Production by Maya Nandhini

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Karen Kwok

Thomson Reuters

Karen is a columnist focusing on global technology and venture capital sectors, writing stories about artificial intelligence, fintech, and semiconductor companies. She also covers deals in the Middle East region and global metal mining sector. Prior to Breakingviews, she was a European gas and power reporter at S&P Global Platts in London and covered funds and equities at Morningstar UK. Karen also briefly worked at Bloomberg. Born and raised in Hong Kong, she is fluent in Mandarin and Cantonese.

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