AI has the revenue scale dot-com lacked, and the financing loops of the telecom bust

Anthropic's prospectus, made public on 26 October 2026, puts numbers on the argument that today's AI spending is not a rerun of 2000. The developer of the Claude models reported revenue of $16.3bn for the six months to 30 June 2026, against $1.2bn a year earlier, and its operating activities generated $3.9bn of cash, according to its Form S-1. The case holds that this is the difference: AI has paying customers and its chips run flat out, while the dot-com era left fibre lying unused. This analysis tests that claim on twelve measures, mostly with US data. It is education, not a share-price forecast or investment advice.

The fair version of the argument starts with who is paying. Much of the 1999-2000 network build was done by carriers and start-ups that relied on equity and bond markets. Global Crossing reported a loss applicable to common shareholders of $1.98bn on revenue of $3.79bn for 2000 (10-K). Today's biggest buyers are highly profitable. Microsoft generated $182.9bn of operating cash in the year to 30 June 2026, against $115.9bn of additions to property and equipment (10-K). Alphabet's first-half figures were $84.9bn against $80.6bn (10-Q), and Meta's for nine months $96.9bn against $83.1bn (10-Q). Amazon is the exception: its free cash flow, a non-GAAP measure, was negative $7.6bn for the twelve months to 30 June 2026 (10-Q).

Sales on the supply side are large and rising. Nvidia's Data Center revenue was $89.0bn in the quarter to 26 July 2026, up 117% from a year earlier (10-Q). Google Cloud took in $24.8bn (10-Q) and Amazon Web Services $42.2bn (10-Q) in the second quarter of 2026. Anthropic's revenue rose from $41m in 2023 to $4.6bn in 2025, and its operating loss narrowed to $0.7bn in the first half of 2026 from $2.1bn a year earlier. Its net loss for the half was $80.7bn, but the S-1 shows $72.4bn of that came from fair-value changes on its convertible notes, SAFEs and derivative liabilities, a non-cash item explained in Polstob's convertible-notes piece linked below.

Sellers also say they cannot keep up. Anthropic's S-1 speaks of its "compute-constrained environment where customer demand exceeds available compute". Microsoft's annual report says demand above its capacity limits how quickly it can serve customers, and Nvidia says it is "currently experiencing certain supply constraints". Contracted backlog is large: Microsoft's commercial remaining performance obligation rose 84% to $678bn, and Google Cloud's backlog was $513.9bn, both at 30 June 2026. Oracle reported $664bn at 31 August 2026 (10-Q) and CoreWeave $103.7bn at 30 June 2026 (10-Q).

Valuations look less stretched on one measure. The S&P 500 traded at 18.7 times forward 12-month earnings on 23 October 2026, below its five-year average of 19.8, according to FactSet; that rests on analysts' estimates, which then put calendar-2026 earnings growth at 33.1%. FactSet's 24 January 2020 report put the 20-year peak at 24.4, on 24 March 2000. Listings are calmer too. Jay Ritter's IPO statistics count 476 IPOs in 1999 and 380 in 2000, with average first-day returns of 71.2% and 56.3%, against 90 in 2025 at 29.3%. Tech IPOs numbered 370 and 261 then, and 31 in 2025 (Ritter).

Buyers are paying. Anthropic had more than 11,900 customers bringing in $100,000 or more over the trailing twelve months at 30 September 2026, up from more than 950 a year earlier. Broad use is still a minority: 17% to 20% of US businesses reported using AI between December 2025 and May 2026, the Census Bureau found. Power is a physical limit with no sourced 2000 equivalent. In a report issued on 10 April 2025 the International Energy Agency put data-centre use at about 415 TWh in 2024, around 1.5% of world electricity, projected about 945 TWh by 2030 and said "Electricity grids are already under strain in many places", with around 20% of planned projects at risk of delay.

The weakest part of the 'different' case is financing. In 2000 equipment makers lent to their customers. At 30 September 2000 Lucent had committed to extend up to about $6.7bn of customer credit and to guarantee up to about $1.4bn of customer debt (10-K). Cisco's 2000 annual report said: "We are experiencing increased demands for customer financing, including loan financing, and leasing solutions." Nvidia held $99bn of ecosystem equity investments plus $25bn of commitments at 26 July 2026, and in August agreed guarantees capped at $105bn backing leases at SB Energy's Ohio campus for an OpenAI affiliate (10-Q). Each guarantee generally starts with its lease, the first expected in fiscal 2029, and pays out only if certain tenants default.

Anthropic's S-1 says some of its cloud suppliers "are also strategic investors in us, are our customers, and offer AI models and services that compete with ours". It has committed to spend at least $44.9bn with Microsoft to May 2033, at least roughly $114.5bn with Google to July 2033 and at least $110.0bn with Amazon to April 2036, whatever its actual usage. That is $269.4bn by Polstob's arithmetic; the filing gives no total. Note purchase agreements let it issue up to $20.0bn of notes to Google, $15.0bn to Amazon and $42.0bn to Broadcom or a designated financial partner, $77bn by Polstob's sum.

Global Crossing ended 2000 with $6.3bn of long-term debt plus $1.0bn of short-term borrowings and filed for Chapter 11 on 28 January 2002 (8-K); WorldCom followed on 21 July 2002 (release). Meta's maximum exposure to loss in its unconsolidated data-centre joint ventures was $68.4bn at 30 September 2026, including $41.5bn of residual value guarantees. Anthropic's Broadcom equipment leases carry rent of about $161.2bn excluding interest. CoreWeave had $35.6bn of debt principal at 30 June 2026; Nebius took a $3.5bn, 364-day facility from Citi (6-K); SpaceX expects about $40bn of principal under a GPU lease that had not closed (8-K); Oracle sold $19.9bn of shares through an at-the-market programme in the quarter to 31 August 2026.

S&P Dow Jones Indices found "a level of concentration not seen since the mid-1960s" when the 10 largest S&P 500 companies reached almost 40% of index weight in mid-2025. Robert Shiller's cyclically adjusted P/E peaked at 44.2 in December 1999, the series high since 1881, and the provisional October 2026 reading is about 41. Margin debt reached a record $1.50tn in June 2026 in FINRA's data, 49% more than a year earlier, and $1.48tn in September, up 31%. In March 2000 it peaked at $299.9bn, up 80.5% in a year. The growth rates (Polstob's calculations) compare; the nominal, unscaled levels do not.

Investors still accept losses: 78% of 1999-2000 IPOs had negative trailing earnings per share, against 70% over 2011-2025, Ritter's data show. Unit prices fell in both eras, gradually then and steeply in recent years, on different measures. US long-distance phone prices fell 18.5% from December 1997 to March 2003, the Richmond Fed noted, while Epoch AI found on 12 March 2025 that the price of reaching a fixed level of language-model performance was falling by 9x to 900x a year, depending on the benchmark.

The idea that dot-com companies had no revenue does not survive their filings. Pets.com reported 1999 revenue of about $5.8m and a net loss of about $61.8m, and on 4 November 2000 its board adopted a plan of complete liquidation after no viable offer to buy or fund the business came in (10-K). Webvan had net sales of $178.5m in 2000 and a net loss of $453.3m; its auditors expressed "substantial doubt regarding Webvan's ability to continue as a going concern". eToys had net sales of $151.0m and a net loss of $189.6m in the year to 31 March 2000 (10-K). The gap was between revenue and losses.

Supplier profits did not prevent a bust either. Cisco earned $2.67bn of net income on $18.9bn of net sales in the year to 29 July 2000 (10-K). Yet the build it supplied reversed: US investment in communications equipment rose from about $62bn a year in early 1996 to over $135bn in late 2000, in constant 1996 dollars, then fell below $93bn by late 2001, the Richmond Fed found. The Nasdaq telecom index dropped from 1,230 in March 2000 to 136 by 16 May 2003. Nvidia's profits today, like Cisco's then, do not show whether its customers' spending will last.

Filings describe shortages, not measured utilisation, and 1999 had its own demand story: BellSouth CEO Duane Ackerman was among those asserting internet traffic kept "doubling every 100 days". By early 2001, the Richmond Fed paper says, "massive overinvestment had taken place in the sector, particularly in the area of long-distance fiber-optic cable". Microsoft warns: "Overestimation of demand or misalignment of capacity investments may result in underutilization of infrastructure and may lead to impairment ..." Backlog is long-dated, too: Oracle expects about 13% of its $664bn to become revenue within twelve months, CoreWeave 41% of its $103.7bn within 24 months.

Asset lives change the shape of the risk. Fibre, once laid, can stay in use for decades. AI servers are written off much faster: Alphabet depreciates servers and network equipment generally over six years (10-K), Meta most of them over 5.5 years after lengthening the estimate in 2025 (10-K), Microsoft over two to six years, and Anthropic all property and equipment over three to five. Amazon cut part of its fleet to five years from six, saying: "The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning."

On this evidence the thesis holds for the core: the largest buyers mostly pay from operating cash flow, sellers report shortages, revenue is large and the forward P/E is well below March 2000. It is overstated on history, since dot-com firms had revenue and Cisco was very profitable, and on utilisation, a current shortage rather than a guarantee. It misses the strongest parallels: vendor and circular financing, leases and joint ventures, the highest concentration since the mid-1960s, a CAPE near its 1999 peak, fast-rising margin debt and, at the edge, leveraged neoclouds (specialist GPU clouds such as CoreWeave and Nebius). The closer template is the 2001-02 telecom bust, not Pets.com.