Anthropic is trying to IPO in November, before they have to disclose Q3 numbers that show the music slowing, and certainly before December, when the music stops. What does IPO really mean? What has it meant since first IPO (the VoC) in 1602 used it to profit from theft and slavery? Initial Public Offering means offering the human public to inhuman corporations, providing fresh meat for the high priests of modern finance to exit, liquidly. The public provides the offering and the priests mutter some incantations and feast. Thus, today, 'retail' investors are being invited to buy into half-a-trillion in looming debt which depends on Americans spending as much as food on AI, and/or losing their jobs to pay. What could go wrong? What could go right is the real question here.

Capitalist AI

I won't get into the Anthropic prospectus because it's stupid. It's 400 pages of getting people to avoid the fact that the company is loaded with debt, competed to death, and cannot deliver return on investment. Who cares? The name of the game is passing the hot potato from one capitalist to another until it blows up in the general public's face. That's what IPO means, with a 15-day delay.

Generally Accepted Accounting Principles (GAAP) are dead since Uber, people just make up their own accounting and this is somehow OK. Anthropic uses a bullshit measure called 'Annualized Run Rate' (taking your best month and multiplying it by 12) and Wall Street in general uses 'street earnings' (whatever a bunch of degenerate gamblers think). The street number they're using is that Anthropic is ackchyually profitable ($2.7 billion first half) and that the actual loss ($80.7 billion) is just on 'paper'. But that's the whole scam right there! That's how much money they want to loot from retail investors, and that's just the start. As the Wall Street Journal says,

About $72 billion of the excluded losses arose from marking various liabilities, including convertible notes, to market values. Excluding those losses arguably makes sense, on the grounds that they aren’t indicative of ongoing operations. But if that is true, then the analysts who cover Amazon and Alphabet should be excluding the corresponding gains from the companies’ Street earnings.

Do you see what's happening here? A bunch of companies insider trading amongs each other ask you to book their gains and ignore their losses. How big is this fraud? "During the second quarter alone, such gains at these two companies represented about 15% of S&P 500 earnings, according to a Wall Street Journal analysis." 

What's happening with Anthropic is that Amazon, Alphabet, and Microsoft (among others) invested some fraction which is now being 'marked to market' up to $72 billion. Why did this number go up? Because Anthropic's valuation has gone up. Why? Because Anthropic has paying customers. OK, who are those customers. Uh, 50% Amazon, Alphabet, and Microsoft. It's really incredible. It's like investing money in a car wash, then running a bunch of your own cars through the car wash, and selling the business to some sucker who thinks it's a real business.

Clients, investors, competitors, in the AI world it's all the same thing. The only real distinction is us vs. them, 'us' being insiders and 'them' being retail investors being suckered. And the name of the game is getting in and out leaving someone else holding the bag. People who say 'just ignore the $80 billion loss, that's an accounting thing' are missing the entire point of accounting. They're literally disclosing how much the initial insiders are going to defraud the NASDAQ investors, and NASDAQ is conspiring to pass those losses onto index funds.

The fact is that Anthropic and OpenAI and all the White (as in from the White Empire) AI companies cannot deliver the ROI they've promised. The AI spending required would need to be nearly 9% of total US GDP, ie the same amount people use on food. Have you used AI? Is it worth that much, especially when Chinese models can do it for pennies on the dollar.

However, even after DeepSeek turned AI into a commodity, the White AI companies kept fetishizing it as the second coming of slavery. It's the South Sea Bubble all over again. And, once again, like with the tulips, the whole society is in on it. Every capitalist guard rail, the idea that companies should be profitable, that competition should drive prices down, that IPOs should be 'seasoned' for a year before being dumped on index funds, that's all gone.

For example, this is how the Anthropic Prospectus lists their contractual obligations where they should. They just don't. It's just blank.

As Ed Zitron says, Anthropic doesn't mention its Q3 revenues (widely reported as down, while compute went up), amount of payments due on a yearly basis, amount of payments due in the next 12 months, its current (ie Q3) cash position, or its run rate.

Anthropic does list a web of obligations further on which, as Yahoo Finance reports,

Includes roughly $111.1 billion to Google, $110 billion to Amazon, $31.4 billion to Microsoft, and $161.2 billion to Broadcom. Approximately 80% of these obligations are binding and non-cancelable. To put this in perspective, for every dollar Anthropic earned in 2025, it committed roughly $113 to future infrastructure. This is the terminal expression of the compute landlord thesis: a company that does not own its own foundation but is instead locked into a massive, non-cancelable web of dependencies.

If you wondering what this 'non-cancelable web of dependencies' (fancy word for Ponzi scheme) looks like, here it is from Bloomberg. The financial press actually reports on this as much as they herd. Nobody cares, the watchword is getting in and out first, après moi le déluge!

You have to understand that this is very late-stage capitalism, the race to see who will be left holding the bag for the everything bubble. All the guard rails are off. GAAP is dead and they've changed the listing rules. Accounting is for suckers and math is for fools.

What we're witnessing in White AI is a multi-level marketing scheme with literal gaming chips at the bottom. This is how it works. First, a few insiders trade among themselves, inflating private valuations. Then they dump these companies on public markets where punters can pick them up, but they're not the final marks. Then after 15 days (because NASDAQ changed the rules) these companies get dumped into the NASDAQ 100 where retail investors have to buy them. It's an index that index funds blindly follow. Thus the risk moves from like 7 companies to millions of punters to basically the entire US population, compounding each step of the way. The only possible way American people can 'win' is if they lose most of their jobs (ie the 'total addressable market'). The question is not what could go wrong here, it's what could go right.

To get to the underlying premise, that AI is so game-changing that it's like discovering digital slavery, that just isn't true. Many if not most other companies in the S&P 500 are going down, and the AI boom isn't showing up anywhere except for the AI industry. As arch-capitalist Torsten Slok (of Apollo) reports (via Zitron), "Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech."

White AI isn't a growth engine that's going to restart White Empire. It's simply terminal cancer. AI simply hasn't changed the world in the way these world-beaters need it to. They tried crypto, then VR, and now AI but none have ushered in a new financial system, metaverse, or economy that they can dominate in the same old way. They desperately need what Lenin called "superprofits (since they are obtained over and above the profits which capitalists squeeze out the workers of their 'own' country)." But it is as Marx said, "In every stock-jobbing swindle everyone knows that some time or other the crash must come, but everyone hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in secure hands. Après moi le déluge! is the watchword of every capitalist and of every capitalist nation."

Communist AI

Now let's get into the bigger problem which is the world market. Any new AI model has a half-life of maybe months because it either gets copied or innovated around. AI is, in short, a commodity, as much as they fetishize it. Regarding copying, Anthropic's prospectus says, "Based on our detection and review process, we estimate that revenue from such customers represented approximately 5% to 7% of our revenue." This is rich from people that train their own models by copying everybody. And regarding innovation, because Chinese AI is operating as what it is, a commodity rather than a multi-level marketing scheme, it is growing more efficient and affordable (and less environmentally destructive). That is true innovation, not threatening to end the world and begging for more money and energy. And these Chinese innovations are in the world market, just a URL or API call away for anybody.

The world-beating models that Anthropic released months ago have already been beaten by models from around the world, ie China. And China, as a communist country, has a completely different ideology than monopoly capital. Comrade Xi Jinping has said, "As a responsible major country, China is always committed to providing international public goods relating to AI." This is of course terrifying if you're a private equity type looking to bleed the world dry.

Unlike search, or social media (and aside from the completely different unit economics) there will be no world market for capitalist AI. Why? Most people are not trying to solve unsolved math or destroy the world. If the cost of switching is changing an API call, why wouldn't people go to the lowest cost provider, even in the home market? The only way capitalist can historically resolve these contradiction is war, but in this case, how? If they go to war with China (which would be even more risible than their attacks on Yemen) they'd be attacking their own supply lines. Their own chips are largely made in Taiwan, which is part of China. And if they ban Chinese AI, so what? They just make themselves more uncompetive and the world moves on without them.

Socialism

This is the looming contradiction talked about by Marx and Lenin for centuries now reaching its eventuality. Capitalism, which even in its defenders reckoning should compete profits down, enters a stage where it's just not profitable to keep going. The White Empire actually entered this stage decades ago and have been reduced to defrauding their population with ruinous rents on education, housing, and everything important, while depending on communist production (in China or increasingly Vietnam) to supply distracting consumer goods. The point of this contradiction is that you're supposed to move on to the next stage of production (socialism), but these capitalists would rather crash the whole thing than share with society at large.

As Jamie Merchant said, more recently,

As the premier capitalist country, the US essentially takes on the mounting costs of reproducing the deteriorating conditions for global capitalist production, which show up as an exploding Fed balance sheet and national debt. At the same time, the expansion of governance into private finance and of finance into government erodes the basis for the market’s competitive function. The further this dynamic progresses, the more the scope for the market shrinks; the more the market shrinks, the less profitable private production becomes relative to the revenues to be collected through finance; the less profitable private production becomes, the more the accumulation of capital is exhausted, requiring ever more drastic state intervention just to keep its heartbeat going, which further erodes the basis for the market. Traditionally, some form of planned economy is taken to be the alternative to market institutions, but there is not much planning happening here. Rather, this is something new: the abolition of the market without planning.

The Marxist argument is that as production gets concentrated into few and fewer hands (monopoly capitalism) why not consolidate it under monopoly socialism? The public markets are obviously a lie (like British public school) whereas public ownership under the dictatorship of the proleteriat is real, and has proven its productive power amply. Socialist production systems with markets in them (ie, socialism with Chinese characteristics) actually have more competition as you can see from the diversity of Chinese AI (and EVs, and everything else). Compared this to the American model, which is just 7 companies in a trenchcoat pretending to be an industry.

This is the point about socialism that people miss, that it is a historical progression, not a destination. Capitalism naturally (or should we say, artificially) consolidates, and at that point you're just deciding if you want to be cannibalized by oligarchs or to live as a society. Investors are being asked to cede 51% control of this company to Dario Amodei his wife, and few other people, with no real oversight. This is just feudalism of the nerds.

Capitalists talk about the information processing power of the market, but what power is there when it's run by passive index funds and if anything big goes down, the government bails it out? This is not so much the wisdom of crowds as the sheepdom of herds. And what is this Anthropic IPO doing? Leading the last sheep not to be shorn, but slaughtered. A final (inshallah) public offering, to the false capitalist gods.

The Pyramid Within A Pyramid

Remember when I said the music would stop by December? That's not me, that's Ghalibaf. Ghalibaf, the last tweeter standing in Iran, said everything is going to crash by December (we discussed the rest here). Coyote, cliff, splat...