Anthropic Has No Moat

I use Claude every day, mostly through Claude Code, and its models are the best I’ve used. I’m writing the bear case anyway, because a good product and a protected company are separate questions.

Anthropic, the company that makes Claude, is about to sell shares to the public for the first time. The amended S-1, the document a company must file first and where it has to list what could go wrong, sets a price of $70 to $78 a share for 825 million shares.

Trading on Nasdaq under the ticker ANT could start as soon as the week of November 16. The Motley Fool’s estimate puts the whole company at about $1.27 trillion to $1.41 trillion at that price.

My claim is that Anthropic has no moat, meaning nothing that keeps a customer once a rival is as good and cheaper. There are three reasons:

That leaves two questions I take at the end: whether a better model could crush Anthropic, even to a 90% fall in the stock, and whether any of this means you should short it.

I’m a developer, not an analyst, and none of this is investment advice. The filing’s numbers come through the breakdowns by Kepler, Mostly Metrics, Fortune and Digital Applied, and I name the one I used next to each figure.

The business is real, and I want that said first. Digital Applied’s read of the filing has revenue at $386 million in 2024, $4.6 billion in 2025 and $33.2 billion in the first nine months of 2026. That’s 13 times the same months of 2025.

$386M$4.6B$33.2B202420252026$0B$10B$20B$30B$40B

Anthropic's revenue, with 2026 through SeptemberPeriodRevenue2024$386M2025$4.6B2026$33.2B

Source: Anthropic's S-1/A, as read by Digital Applied

The word comes from castles, and investors usually credit it to Warren Buffett. A moat is the reason a customer stays when a rival offers the same thing for less.

Apple’s iPhone has one. Your photos, your messages and the apps you paid for live there, and an Apple Watch only works with an iPhone. A cheaper Android phone with a better camera still loses, because leaving costs you your stuff.

ASML has a different kind. It’s a Dutch company and the world’s only manufacturer of the EUV machines that print the most advanced chips, at more than $350 million for the newest ones. Intel, TSMC and Samsung can’t take their business elsewhere, because there is no elsewhere.

Visa has a third kind. Shops take it because shoppers carry it, and shoppers carry it because shops take it, so a new card network with lower fees starts with nobody on either side.

Those are three of the five kinds investors count. The other two are making the thing cheaper than anyone else can, and being so expensive to copy that nobody tries.

The product is the model, and a model can be swapped in an afternoon.

Anthropic sells Claude in several wrappers: chat apps, Claude Code for programmers, Cowork for office work, and direct access for other companies’ software. Every wrapper runs on the same few models. The model is the product.

The filing agrees. Rock Cyber quotes its strategy as one that “prioritizes model capability as a principal source of differentiation”.

A model is closer to a gas station you like than to an iPhone. You drive past a cheaper station because the fuel is better, and nothing about your car stops you from filling up somewhere else tomorrow.

A company uses a model by sending it text and getting text back. It pays by the token, a chunk of text about three-quarters of a word long. Everything the company built around Claude, its software, its instructions and its data, sits on its own computers.

Anthropic’s own documentation shows how small the change is. This is its example of calling Claude through the software kit OpenAI publishes for OpenAI’s models:

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import OpenAI from "openai";

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const openai = new OpenAI({

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apiKey: process.env.ANTHROPIC_API_KEY, // Your Claude API key

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baseURL: "https://api.anthropic.com/v1/" // Claude API endpoint

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});

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const response = await openai.chat.completions.create({

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messages: [

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{ role: "system", content: "You are a helpful assistant." },

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{ role: "user", content: "Who are you?" }

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],

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model: "claude-opus-5-5" // Claude model name

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});

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console.log(response.choices[0].message.content);

Skip the code if you don’t write software. The line that matters is baseURL, the address the request goes to. Change it and the model name, and the same program talks to a different company.

Anthropic says this layer is “primarily intended to test and compare model capabilities”. Comparison shopping is a documented feature.

Claude Code is the wrapper I use all day, and even that isn’t tied to Claude. Three rival labs (Z.ai, Moonshot and DeepSeek) copied the way Anthropic’s servers talk, so Claude Code runs on their models.

This is the settings file from Z.ai’s guide:

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{

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"env": {

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"ANTHROPIC_BASE_URL": "https://api.z.ai/api/anthropic",

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"ANTHROPIC_AUTH_TOKEN": "your_zai_api_key",

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"ANTHROPIC_DEFAULT_OPUS_MODEL": "glm-5.3[1m]",

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"ANTHROPIC_DEFAULT_SONNET_MODEL": "glm-5.3[1m]",

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"ANTHROPIC_DEFAULT_HAIKU_MODEL": "glm-5.3-flash[1m]"

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}

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}

With that file in place Claude Code looks and works the same, and a Chinese model called GLM does the thinking. Anthropic’s gateway docs say it “doesn’t support routing Claude Code to non-Claude models through any gateway”.

ANTHROPIC_BASE_URL is documented on that same page, and Moonshot and DeepSeek publish the same kind of guide.

My own setup has nothing Claude-specific in it. My ~/.claude/CLAUDE.md is one line that imports a shared AGENTS.md, and my skills live in ~/.agents/skills with symlinks into ~/.claude/skills.

The plugs are shared too. MCP, the standard that lets a model use outside tools, was created by Anthropic and given to the Linux Foundation’s Agentic AI Foundation in December 2025. That was good for developers, and it means the tools built around Claude work with every other model.

Big customers have started making the move. At AI Engineer NYC on October 13, David Abitbol of the fintech Revolut said it now runs GLM 5.3 itself, on 56 Nvidia B200 chips, as the default for about 2,000 engineers. The blended cost is near $0.30 per million tokens.

Revolut keeps Claude Code and OpenAI’s Codex for the problems GLM can’t handle. The talk page also warns that the numbers “describe Revolut’s deployment and utilization, not a portable price for any self-hosted model”.

Cursor, the code editor, did the same thing as a product. Its Composer 2.5 model is built on Moonshot’s Kimi K2.5 and costs $0.50 per million tokens in and $2.50 out. By Cursor’s own benchmarks it scores 79.8% on SWE-Bench Multilingual against 80.5% for Claude Opus 4.7.

Cursor used to be one of Anthropic’s biggest customers. The S-1 says two customers were 12% of revenue each in 2025, per Digital Applied, and VentureBeat’s reporting, via PYMNTS, put Cursor and GitHub Copilot at about $1.2 billion of Anthropic’s $5 billion in revenue. SpaceX closed its $60 billion purchase of Cursor on August 14.

Meta moved too. PYMNTS reports it cut its Claude Code users from about 60,000 to 30,000, mostly by moving them to its own tools.

The customer base did get wider. No single customer was above 10% of revenue in the first nine months of 2026, and the top five were about 25%, per Digital Applied.

Nothing in how Anthropic charges slows a customer down, though. 79% of nine-month revenue was pay-as-you-go, billed by the token the way electricity is billed by the kilowatt-hour, so there’s no contract to wait out.

Morningstar, which values Anthropic at $1.7 trillion, declines to count switching costs as a moat for that reason.

The lead is about four months, and rivals learned from Claude itself.

Anthropic’s models are at the top right now. On Vals AI’s Terminal-Bench 4.0, a coding benchmark, Claude models held the top three places on November 9.

The trouble is what happens a few months later. Open-weight models are ones whose files anyone can download and run on their own machines, so they sell for close to what the chips cost to run.

Epoch AI measured how far behind they are. From January through May 2026 the best open-weight models trailed the best closed ones by about four months on its capability index, and a stricter version of the test stretches that to six.

Part of how they catch up is by asking Claude. In February 2026 Anthropic reported that three labs, DeepSeek, Moonshot and MiniMax, used about 24,000 fake accounts to run more than 16 million exchanges with Claude and train their own models on the answers.

I can’t tell you how much of any rival model came from Claude. I can tell you Moonshot’s Kimi K3.1 Pro sits fourth on that Terminal-Bench table, 1.5 points behind Claude Fable 5.2, and that an earlier Kimi is the base of Cursor’s Composer.

A recipe that can be learned by tasting the dish is hard to keep secret.

Then there are models you run on hardware you own. A guide to Mac models lists OpenAI’s own open-weight gpt-oss:20b running in 16GB of memory, and Qwen’s 27B model as a 17GB download with a licence that allows commercial use.

None of them matches a current Claude model, and I found no test that says one does. The big ones are getting close to desk size, though. Meta’s Muse Spark Open, released October 15, needs about 1TB of memory, which Engadget prices at roughly $38,000 for four Mac Studios.

A local model doesn’t have to beat Claude. It has to be good enough for the easy work, and most work is easy.

AT&T is the example. PYMNTS reports it cut the cost of some AI tasks by as much as 56% by sending them to cheaper models, with quality down 2%. It wants open-source models handling 60% to 70% of its queries, up from 40%.

Menlo Ventures’ 2026 survey of nearly 400 enterprise buyers shows the same shift. Open-source models went from 11% to 19% of the tokens companies run in one year, while collecting 4% of the dollars.

Menlo lists Anthropic as a portfolio company, so read its numbers with that in mind.

The models don’t last either. Mostly Metrics found in the S-1 that models released in the previous six months made up over 80% of third-quarter revenue. Twice a year Anthropic has to win its revenue again with a new model.

The price can’t hold, because customers have started rationing.

A model bills like a taxi: the meter runs for as long as it works. In 2026 the coding tools got good enough to work for hours on their own, and the fares got big.

The Next Web reports that these tools “tripled enterprise AI bills even as per-token prices collapsed”. It says Microsoft found some staff spending $500 to $2,000 a month on Claude Code tokens alone.

So the biggest buyers capped the meter. Bloomberg reported, via 9to5Mac, that Apple cut some engineers’ daily AI allowance from $300 to $200 in October and is weighing $100. Claude, ChatGPT and Gemini are the services its staff can use.

Apple’s staff outside engineering already have a $100 cap, and the company has considered $25 for some teams. The same report says few workers were using their full $300, so this is a ceiling coming down, with the savings unclear.

Apple has company. PYMNTS reports Uber used up its 2026 AI budget by April and now limits each employee to $1,500 a month per coding tool, and that Tesla set a $200 weekly limit.

The Information reported, per PYMNTS, that Microsoft was on track to spend $1 billion on Anthropic’s tools internally this year and cut that by about a third. 9to5Mac, citing Forbes, has Accenture’s centrally funded Claude allowance at $29 per employee a month.

When the biggest customers cap what they spend, the seller either lowers the price or loses the usage. Anthropic’s own price list shows which way it went, in dollars per million tokens:

The Sonnet row carries a footnote on Anthropic’s page. The $2 and $10 price was “announced at launch as introductory pricing through August 31, 2026” and “is now the standard price”. I read that as a price rise that was p