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Anthropic nears first quarterly profit, agrees to pay SpaceX $1.25 billion monthly
Anthropic expects Q2 operating profit of $559 million on surging Claude AI demand; confirms $45B compute contract with SpaceX.
AI Product Update Daily
05/22/2026, 08:05:43 AM@TlgkpsCgLGX
AI product update daily: May 22, 2026
OpenAI files a confidential IPO S-1 targeting $1 trillion in September; SpaceX is already public at $1.75T; Anthropic posts its first quarterly profit on $10.9B Q2 revenue. Chinese AI models now hold 60%+ of developer traffic on OpenRouter at 1/9 Claude's cost. Plus: Cloudflare lays off 1,100 citing 600% AI-usage growth, Trump drops his AI executive order again, Waymo halts freeway service in four cities, T-Mobile launches live translation, and Spotify announces AI remixes with UMG.
Wall Street's biggest week in AI history opened today. SpaceX has already filed its S-1 targeting a $1.75 trillion Nasdaq listing in June. OpenAI is filing a confidential S-1 with the SEC today aiming for a $1 trillion debut in September. And Anthropic — which just reported its first quarterly operating profit on $10.9 billion in Q2 revenue — is targeting October. Running through every headline: the same pressure point. Chinese AI models now account for more than 60% of usage on OpenRouter, at a fraction of what Claude or GPT costs. That puts a question mark on the trillion-dollar valuations before any prospectus has priced.
Elsewhere today: Cloudflare cut 1,100 workers (20% of staff) citing a 600% surge in internal AI usage. T-Mobile launched a live translation beta that works on any phone with no app. Waymo pulled all freeway service in four cities. Spotify announced AI-generated remixes with UMG. And Trump scrapped — again — a planned AI executive order, this time over fears it would slow U.S. labs.
The IPO race
Three of the largest private companies in the world are now converging on public markets inside a five-month window.
SpaceX filed its public S-1 on May 20, targeting Nasdaq under ticker SPCX at a $1.75 trillion valuation — which would make it the largest IPO in history 1. Elon Musk retains 85.1% voting control through a dual-class structure and is not selling any shares. The S-1 disclosed that SpaceX's full-year 2025 revenue was $18.7 billion against a net loss of $4.9 billion. Starlink is the only profitable segment: Q1 operating profit of $1.19 billion on 10.3 million subscribers across 164 countries. The rocket launch business lost $662 million in Q1 (Starship R&D drag). The AI computing unit — the former xAI, absorbed when SpaceX merged with xAI in February — posted Q1 revenue of $818 million against an operating loss of $2.47 billion 1.
OpenAI plans to file a confidential S-1 with the SEC as early as today, May 22, underwritten by Goldman Sachs and Morgan Stanley, with a September 2026 target listing date and a valuation above $1 trillion — which would rank it ahead of ExxonMobil, JPMorgan, and Walmart combined 2. OpenAI's current annualized revenue run rate is $25 billion. It has not disclosed a path to profitability.
Anthropic reported this week it expects $10.9 billion in Q2 revenue — up 130% from Q1's $4.8 billion — and projects its first-ever quarterly operating profit at $559 million 3. Three drivers: Claude Code has become the dominant enterprise coding agent, producing high-margin recurring API revenue; enterprise customers spending more than $1 million annually doubled from 500 to 1,000+ between February and April; and compute efficiency improved, with the cost ratio falling from $0.71 per dollar of revenue in Q1 to $0.56 in Q2. Anthropic's private-market valuation is currently around $900 billion, with an October IPO target. It has also committed to paying SpaceX $1.25 billion per month for GPU compute capacity through May 2029, a $45 billion total contract covering Colossus 1 and Colossus 2 — the disclosure that appeared in SpaceX's S-1 3.
| Company | IPO target | Implied valuation | Last-known revenue |
|---|---|---|---|
| SpaceX | June 2026 | $1.75T | $18.7B (FY2025) |
| OpenAI | September 2026 | $1T+ | $25B annualized |
| Anthropic | October 2026 | ~$900B | $10.9B (Q2 2026) |
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The pricing pressure these filings don't fully price in
The central risk to those three valuations is visible in a single data point: Chinese AI models went from roughly 1% of usage on OpenRouter in 2024 to over 60% by May 2026 4. OpenRouter is a developer marketplace routing traffic to hundreds of models through one interface — predominantly individual developers and cost-sensitive startups, but historically a leading indicator for enterprise adoption.
Artificial Analysis benchmarked the cost of an equivalent workload across the leading models:
| Model | Cost per standard workload |
|---|---|
| Anthropic Claude | $4,811 |
| OpenAI ChatGPT | $3,357 |
| DeepSeek (latest) | $1,071 |
| Kimi K2.6 | $948 |
| Zhipu GLM-5.1 | $544 |
Claude costs nearly 9× more than the cheapest capable Chinese alternative, and DeepSeek, Moonshot, and Zhipu have each shipped a model that matches or approaches OpenAI and Anthropic performance on coding and agent benchmarks within the past four months 4.
Anthropic acknowledged the gap directly in a policy document this week, writing that U.S. models lead Chinese counterparts by only "a few months" and that China has gained adoption advantages through cost. OpenAI's position: frontier model demand is accelerating enterprise deals fast enough that pricing pressure from open-source models has not entered the company's top concerns. The divergence between those stances will be visible once both S-1s have to describe competitive risk in writing.
Cloudflare cuts 1,100 roles
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Cloudflare announced Thursday it was laying off 1,100 employees — approximately 20% of its 5,483-person workforce 5. The company attributed the cuts to an internal AI transition: employee AI usage across engineering, HR, finance, and marketing grew by 600% in three months, producing thousands of daily agentic sessions. Cloudflare said it restructured now to avoid repeated smaller reductions, and framed the move as aligning headcount with AI-augmented workflows rather than fully automated replacements — sales roles with quotas were largely exempted.
Severance terms: full base salary through December 31, 2026; U.S. medical coverage retained; accelerated equity vesting with the one-year cliff waived. Cloudflare expects restructuring charges of $140–150 million, most hitting the quarter ending June 30. The stock fell roughly 25% to $194.17 on the announcement 5.
Policy: Trump drops the AI executive order
The White House scrapped a planned AI executive order on Thursday, hours before a scheduled signing ceremony 6. The order would have established a framework requiring voluntary pre-release national security review of frontier AI models, with NSA participation in classified testing. Trump said he was concerned the measure "could dull America's edge" and that he did not approve of the text's specific provisions.
The pullback reflects a genuine split inside the administration. A Commerce Department agreement from earlier this month — modeled on Biden-era voluntary commitments from Anthropic, OpenAI, and Google — was announced and then quietly removed from the department's website. Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell separately convened Wall Street CEOs in April to discuss cybersecurity risks posed by Anthropic's Claude Mythos model, which has reportedly identified zero-day vulnerabilities in financial infrastructure 6. No new signing date was announced. (Note: the May 21 memo noted a 90-day NSA review provision; today's reporting confirms that same draft was pulled.)
Elsewhere
Spotify + UMG: AI remixes. Spotify announced a premium add-on letting subscribers generate AI-based remixes and covers of songs in the catalog 7. Universal Music Group is the first label to sign a licensing deal for the service, with both companies framing terms as consent-based, with attribution and royalties for participating artists and songwriters. Artists can opt out. Spotify has not set a launch date or disclosed pricing beyond confirming it is a paid add-on for Premium subscribers.
T-Mobile live translation. T-Mobile launched a free beta for Live Translation, covering 80+ languages, now active for enrolled users 8. The feature runs on T-Mobile's 5G network infrastructure rather than a phone app — one caller presses
*87 to activate it, and the AI translates both sides of the call in real time in each speaker's voice. Any phone on T-Mobile's network can use it, including feature phones. T-Mobile says it does not retain call recordings or transcripts. Commercial pricing has not been announced.Waymo halts freeway service. Waymo suspended robotaxi operations on freeways in San Francisco, Los Angeles, Phoenix, and Miami as of Thursday, citing the need to integrate "recent technical learnings" after its vehicles struggled with construction zones 9.
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A May 19 video on X showed a Waymo driving through traffic cones; the vehicle was reportedly followed by police. Surface-street service in all four cities continues. This follows Waymo pausing Atlanta and San Antonio operations after robotaxis drove into flooded streets. Waymo is targeting one million paid rides per week by end of 2026 9.
What to watch
- SpaceX IPO roadshow: starts within weeks; market reception to a $1.75T ask with a money-losing AI segment will set expectations for OpenAI and Anthropic's filings.
- OpenAI S-1 language on competitive risk: how the company characterizes the Chinese model cost gap in writing will be the clearest public accounting of the threat to date.
- Anthropic Q2 actuals vs. projections: the $10.9B and $559M profit figures are internal projections; the IPO will require audited numbers.
- White House EO: the administration has twice reversed course on AI oversight in one month; watch whether the Commerce Department voluntary-agreement framework is quietly reinstated.
- Waymo: freeway suspension is the third operational halt in three weeks, alongside Atlanta and San Antonio. The one-million-rides-per-week goal depends on highway coverage resuming well before year-end.
References
- 1SpaceX (SPCX) IPO: Live updates
- 2AI News Today — May 22, 2026: 12 Biggest Stories
- 3Anthropic nears first quarterly profit, agrees to pay SpaceX $1.25 billion monthly
- 4Cheap AI could derail OpenAI and Anthropic's IPOs
- 5Cloudflare Cuts 1,100, Arctic Wolf Axes 250 Amid AI Surge
- 6Trump Calls off AI Executive Order Over Concern It Could Weaken US Tech Edge
- 7Spotify is launching AI-generated remixes
- 8T-Mobile Debuts AI-Backed Live Language Translation Beta, No App Needed
- 9Waymo halts freeway rides after robotaxis struggle in construction zones
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