Google And Amazon Are The Reason For Anthropic’s Eye-Watering $42 Billion Loss

A leak of Anthropic’s prospectus reveals that the AI giant made $4.6 billion, and lost $8 billion on an operating basis last year. But the total of its losses last year was a whopping $42 billion.

That would have been one of the worst annual losses on record for an American company —almost matching the $29.1 billion loss reported by Citigroup in the 2008 financial crisis. But Anthropic didn’t blow this money on compute, talent or takeovers. Instead, it’s a bookkeeping charge measured by Generally Accepted Accounting Principles (GAAP).

The charge is largely due to two major Anthropic investors’ stakes being marked up. Google first invested in the company in mid-2023, but later that year it would invest $2 billion in the form of debt known as convertible notes. These can later be swapped for shares in the AI startup. Amazon also invested $8 billion in late 2024 at a $46 billion valuation, similarly via convertible debt.

“The loss is a consequence of good news.”

Now, with the company targeting a reported $2 trillion valuation for its IPO, the value of the shares Google and Amazon were promised have ballooned, too. Anthropic needs to mark that down as an accounting loss.

It’s not clear if the $34 billion in losses similarly accounts for other investors.

“The loss is a consequence of good news,” Joshua Ronen, an accounting professor at the NYU Stern School of Business, wrote in an email to Forbes. “The charge is enormous precisely because the valuation soared.”

Amazon also noted in its July earnings report that its net income had leapt to $62.6 billion up from $18.2 billion last year, largely thanks to its investment in Anthropic. That surge in income was largely attributable to a $53.4 billion mark-up on its stake in the startup. Amazon has said it has invested $18 billion into Anthropic, and has the right to invest $20 billion more.

Anthropic, Google and Amazon didn’t immediately respond to requests for comment.