Michael Burry Says Anthropic's Compute Commitments Run About 12 Times Its Revenue Rate

Since Anthropic filed its S-1 on Monday, Oct. 26, the loudest skeptic to weigh in has been Michael Burry, the investor made famous by "The Big Short." He has now put his objections in writing.

In a Substack post Tuesday, Oct. 27, Burry said the prospectus reinforces his view that the AI industry is "catastrophically vulnerable." It was his second round of comments. He first raised concerns in a Substack chat thread on Monday.

The $537 billion figure

Burry's central claim concerns spending commitments. He said Anthropic has struck deals to buy about $537 billion of compute from Amazon, Alphabet and Microsoft. He added that it has reached preliminary agreements worth hundreds of billions more with others, including SpaceXAI.

By his math, total commitments come to roughly 12 times Anthropic's current annual run-rate revenue.

"This is not stated clearly in the S-1, and in my view it is the most deserved headline from it," Burry wrote.

He also pointed to how tangled the relationships are. Hyperscalers like Amazon and Alphabet act as Anthropic's "lenders, vendors, channel providers, and shareholders," he said. He described the Broadcom arrangement, which involves Apollo and Blackstone and includes convertible notes and structured credit tranches, as part of the same web.

"Just remember, the reason this is so complex is because too much debt is needed, and it must be unloaded from the balance sheets of those involved," he wrote.

The growth question

In its filing, Anthropic said its revenue surpassed $16 billion for the first six months of this year, a 14-fold increase from the first half of 2025. Its operating loss narrowed to $693 million from $2.14 billion. The company also generated nearly $4 billion in operating cash flow.

Burry says the growth curve is flattening. He cited Anthropic's own statement that third-quarter revenue was 86 times the $197 million it booked in the fourth quarter of 2024. That works out to about $16.9 billion.

On those numbers, that is roughly 46% growth from the second quarter to the third. The prior jump, from the first quarter to the second, was 144%.

Burry noted that the slowing of growth is not attributed in the filing to a decline in "tokenmaxxing," the practice of maximizing AI token consumption, and said he didn't expect the filing to mention it. His own explanation is efficiency. "I think they are already being used more efficiently and that trend will continue, to the detriment of their growth rate," he said.

Burry also noted the S-1 largely covers the period through June 30. "The end of q2 and during q3 a lot changed in the developer landscape, and that is not in this prospectus," he said.

What Burry is not arguing

Burry does not dispute that the technology works. A reader in his chat said large language models were still improving exponentially, and Burry replied that the improving tech has nothing to do with any short thesis. "I have never said that LLMs would stop improving," he said.

He is focused on financing. In his list of concerns he named "insurer shell leverage," the inability to plug in the latest chips, DRAM capacity repurposed for high-bandwidth memory that he says "will return with a vengeance," and the proliferation of small language models on open-weight models. He also flagged mismatches between funding timelines and the investments they pay for.

He drew a comparison to dot-com-era vendor financing. "People keep making the same mistakes with every new thing," he said.

Burry also granted the other side its due. "While some may see all the circularity and connectedness as security on the way up, and that is not wrong," he wrote, it leaves the system exposed "either on a pause or on the way down."

The other side of the ledger

The filing's own numbers are the counterweight. A 14-fold revenue increase, an operating loss cut by about two-thirds and positive operating cash flow are the figures Anthropic put before investors. Burry's objection is to what lies beyond them: the commitments, the circular ties and the post-June developments.

Retail traders on Stocktwits were "extremely bullish" on Anthropic, with message volume rated "extremely high." That was while sentiment on the SPY and QQQ funds was bearish.

What comes next

Anthropic has not set an offering price or share count. The Wall Street Journal has reported that the debut is planned for the week of Nov. 16, at a valuation between $1.5 trillion and $2 trillion.

It remains to be seen whether the pricing documents, and any updated financials covering the third quarter, address the commitments and developer-market shifts Burry says the current S-1 leaves out.