Anthropic’s path to the Nasdaq gets even tougher.

Anthropic picked a tough week to release its IPO prospectus.

Within days of release, several of the company’s key partners, including: microsoft, google and Amazonreported quarterly results that add to existing market concerns over the expansion of artificial intelligence.

Futurum Group CEO Daniel Newman told CNBC in an interview on Friday that “everyone is still going all in when it comes to AI, but everything around AI has taken an interesting turn this week.” He said the hyperscalers’ results “raise some eyebrows” and create new headwinds in the market, “creating further doubts about their capital structure.”

Regardless of market conditions, Anthropic will have to deal with a skeptical investor base as it aims for a potentially record-setting initial public offering in the coming weeks. The AI ​​company disclosed in its prospectus on Monday a first-half net loss of $80 billion, along with hundreds of billions of dollars worth of computing commitments and more than 90 pages of risk factors. Investors are still awaiting Anthropic’s third quarter results.

This week, concerns have been growing about Neocloud’s financial health. coreweave and Neviusfaces rising borrowing costs and a lack of lenders as they pursue aggressive AI buildouts. Anthropic leverages much of its power from Amazon, Google, and space xBut they also rely on neocloud for some computing as they race to scale as quickly as possible.

Investors are now becoming increasingly concerned about AI trading as a whole.

“This is a great technology and seems like it can do things we never imagined, but how does it become a business?” David Hsu, a professor at the Wharton School at the University of Pennsylvania, said in an interview.

The Nasdaq Composite Index plunged 2.9% on Friday, snapping a three-week losing streak for the first time since March. Nvidiagraphics processing units have been driving the AI ​​boom, but their stock prices have since fallen along with the entire semiconductor sector. intel announced a weak outlook, and the stock price fell by the most since the 1970s.

Microsoft, Google, and Amazon all listed concerns in this week’s reports. Both companies have ramped up spending in recent years to meet surging demand for AI infrastructure, but all three companies released capital spending numbers and forecasts that were lower than analysts expected. Microsoft lowered its capital spending forecast for this year to $170 billion from $175 billion, while Alphabet maintained its outlook of up to $205 billion and Amazon reiterated its outlook of about $220 billion.

“It’s been an ugly press season for the tech industry so far,” BTIG managing director Jonathan Krinsky wrote in a note Thursday. He described the impact as the “Texas Chainsaw Massacre,” adding that the sector has weaknesses that the market cannot ignore.

Cash is an issue. Amazon reported negative free cash flow for the second consecutive quarter, resulting in a $42.4 billion outflow in the trailing 12 months. Google reported negative free cash flow of $9.1 billion, which contributed to its stock plummeting nearly 13% on Thursday, its worst day ever.

Microsoft’s free cash flow remained positive at $18.6 billion, but it declined significantly for the second consecutive quarter. The company on Thursday announced plans to raise $25 billion in bonds as it seeks additional sources to finance infrastructure expansion.

“All of a sudden they said, ‘We can’t continue to fund this with free cash flow,'” Newman said. “The worry is that there are basically no companies right now that can use their business capabilities to generate cash flow. That’s becoming increasingly worrying.”

Anthropic’s hyperscaler partners are also among its largest investors. Each company needs the other to keep the flywheel turning, and this topic is sure to be a major discussion point at Anthropic’s upcoming roadshow.

Anthropic did not respond to a request for comment.

Anthropic’s AI demand has significant tailwinds.

Microsoft, Google, and Amazon all reported cloud growth that exceeded analyst expectations, with Google’s business revenue more than doubling year-over-year. and oracleThe company, one of the biggest spenders on AI data centers, said in an investor presentation Wednesday that it would limit additional funding to $20 billion over the next few years and become cash flow positive in the second half of next fiscal year.

Analysts at Citizens wrote in a note on Thursday that the announcement “allays investors’ biggest fears that funding the massive AI infrastructure buildout will require endless increases in debt and equity issuance.”

Attention will likely shift from hyperscaler returns back to anthropics as investors assess how much risk to take on and at what price.

The IPO market has been nearly frozen since then. space x Call for records in June. Biometric ring maker Oura, Australian AI data center operator Firmus and SK Hynix’s US-based Solidigm subsidiary have all recently postponed or abandoned their IPO plans. Neocloud company Nscale, which filed to go public in September, hasn’t updated its prospectus for several weeks, as has SoftBank’s SB Energy.

Regarding Anthropic, Newman said the FOMO (fear of missing out) for a potentially “generational” company is real and that the prospectus was “very impressive,” showing annual sales growth of 1,300%, net revenue retention of 900% and implied gross margin of 85%.

“Antropic is the IPO market right now,” Newman said. “I think companies need to be extremely cautious, if not foolish, if they really want to come in at this time.”

—CNBC’s Jordan Novett, Annie Palmer and Samantha Subin contributed to this report.

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