Anthropic reported a 58% share of revenue consumed by compute costs in the third quarter, a figure that has risen from 48% in the previous period.
The company updated its S-1 filing on Monday to include data through September 30th rather than stopping at June 30th. Total revenue hit $17 billion compared to $11.5 billion the quarter before, yet operating losses widened due to the surge in spending on processing power.
The margin squeeze
Revenue generated for every dollar spent on compute peaked at just over two times last quarter before dropping to 1.72x. This chart tracks the value returned on infrastructure investment since the start of 2025.
The spike in costs occurred because demand outstripped available capacity. Anthropic’s bill for the quarter reached $10 billion. The filing notes that $5.0 billion of this came from short-term commitments, which cost significantly more than the multi-year contracts they prefer.
Public records show deals with SpaceX for $1.25 billion a month, alongside agreements with Nscale, Akamai and Volta. These are neoclouds, smaller providers offering flexible capacity at higher rates than the major hyperscalers.
Management expects infrastructure expenses to remain the largest operating expense for the foreseeable future as they secure additional committed compute from cloud service providers.
Building their own base
Anthropic is attempting to reduce reliance on external vendors through a project called Anthropic Direct. However, rapid growth means building their own infrastructure cannot keep pace with demand, leaving neoclouds as the primary option.
Investors are currently focused on revenue growth of nearly 50% a quarter, which masks the high cost of compute. A slowdown in demand would likely shift attention back to the expense structure.
AI labs remain dependent on a trillion-dollar infrastructure buildout. Risks include bond market volatility or increased local opposition to data centre construction. Anthropic cannot control these factors, but a disruption would complicate their financial position significantly.
What it means
Until Anthropic can scale its own hardware or demand normalises, the company’s profitability will hinge on the price of external compute. High costs are currently an acceptable trade-off for growth, but they represent a structural vulnerability.
