Breaking: Anthropic IPO Looms Amid Chinese Open Source Push and Hugging Face Purges

Anthropic is preparing to go public in an initial public offering that it projects at a valuation between 2.5 trillion dollars and 3 trillion dollars. The company carries compute commitments to other companies, including Amazon and Google, of up to 900 billion dollars. Anthropic is running a deficit of about 500 billion dollars and makes less than 20 billion dollars a year in revenue. The gap between the projected valuation and the under 20 billion dollar annual revenue is the core of the question for investors. How can a company that loses 500 billion dollars be worth 2.5 to 3 trillion dollars. The math of the IPO relies on future dominance, but the path to that dominance is being contested by open source alternatives.

The open source market is being flooded by advanced Chinese models that challenge the proprietary status quo. These include Kimi from Moonshot AI, DeepSeek, Qwen from Alibaba, and models from Xiaomi. These companies are willing to give the models over to the public to increase innovation. Kimi K3 started to outperform the Opus 5 models from Anthropic, and it was given to the public. The internet used these large language models, quantized them down, and made them usable on smaller machines like Mac Studios, A100 cards and RTX Nvidia models. This shift allows users to run advanced AI locally, reducing reliance on cloud services.

The threat of quantized models is significant for the GPU economics of the market. A single Nvidia RTX Pro 6000 graphics card can hold about 15 to 20 light users running light compute at about 60 to 70 tokens per second. It can also support 1 to 2 heavy coding users running Claude Code at about 40 to 50 tokens per second, assuming constant use 24 hours a day. Each heavy user on the max plan pays 200 dollars a month, while each light user pays about 20 dollars a month on average. An RTX Pro 6000 retails at 20,000 dollars as of now. That price does not include the servers, switches, CPUs and processors needed to run the machines, the data center facility costs, or the electricity.

Buying the cards from Nvidia direct at a wholesale price of 3,000 to 4,000 dollars, the GPU alone takes about 10 months of a heavy 200 dollar a month user to pay back. It takes about the same time for the 15 to 20 light users at 20 dollars a month to cover the cost. Most light users will not use the chat for more than a few hours a day, so the bandwidth number can stretch 10 times. However, the breakeven and acquisition cost stays huge. The compute and GPU bottleneck is a real problem for these companies, and Nvidia knows it. Nvidia drives demand up and lowers supply, gives all its supply to the large players like Anthropic, Grok and OpenAI, and the consumer market is left fitting the bill.

Nvidia agreed to acquire Hugging Face, the platform where most open AI models are distributed, for 12.9 billion dollars. Hugging Face makes about 150 to 200 million dollars a year in its peak years, so the 12.9 billion dollar price is about 70 times its revenue. 12.9 billion dollars is pocket change for Nvidia and its CEO Jensen Huang. The stated reason for the acquisition was CUDA, the software that runs all these models. The deeper reason was control of the distribution of models on the market, especially the open source market. This move allows Nvidia to influence which models are easily accessible to developers and users.

After Nvidia acquired Hugging Face, advanced models were deleted from distribution. Anything over a quant 4, meaning advanced and capable of beating out Claude's models, was removed. The 4 bit, 6 bit, 8 bit and 16 bit full sized models were banned from the Hugging Face platform. Developers on Discord rallied to stop the censorship and corporate overreach. They opened Pirate Face, a place where you can upload and download all models. However, this happened not before the large 400 gigabyte models at quant 3 and higher were scrubbed from the network. The rise of Pirate Face signals a fragmentation in how open source AI is shared and accessed.

Anthropic demanded that Congress ban Chinese models because of national security, when the real goal was to control the market. Anthropic recently did a publicity stunt: it released and circulated media that AI will take over the world when one of its disgruntled employees, Jacob Coxon, quit amidst his disappointment in AI. The goal was to get the government to pass bills banning models that were a huge threat to Anthropic's bottom line. The panic worked: Congress passed a bill that now bans any government and its affiliates from using any Chinese models. This legislative move creates a favorable environment for proprietary models in the public sector.

Anthropic is trying to pass bills that would stop other companies like Verizon and other networks from launching their own AI models in house. These companies would use advanced open source models to build their own capabilities. By restricting this, Anthropic aims to maintain its market position. The company also released Fable 5 in June 2026, and the government forced them to take it down. Fable 5 and Mythos 5 were released on June 9, 2026. Anthropic suspended access to them worldwide on June 12, 2026, after the U.S. Department of Commerce issued an export control directive. The models were solving too many problems, and Anthropic pulled them off the shelf. This was not about winning the AI race, it was about controlling the AI race.