r/wallstreetbets • u/Sufficient_Habit5091 • 1d ago
News Anthropic secured highest junk credit rating in June
https://finance.yahoo.com/technology/ai/articles/anthropic-secured-highest-junk-credit-040018773.html378
u/alwaysrecession 1d ago
How is securing a junk credit rating below investment grade a good thing?
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u/thatdude845 1d ago
Cuz Gen Ai is just two weeks away bro.
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u/Afraid-Gate-2145 1d ago
I heard they were able to reduce the time and it's one week!
I can't wait for my AGI robotic maid to wipe my butt for me.54
u/Craneteam 1d ago
"You're right I did tear your anus. You are right to call me out on that. Next time I will do better. Would you like me to look up the nearest hospital?"
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u/Gonewildonly12 1d ago
BB in the grand scheme of things is a fairly strong credit rating for corporate bonds. High yield bond funds usually target B and below
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u/dgellow 1d ago
The term “junk” for bonds is a bit misleading. For a young company whose business is still fairly speculative (to say it politely) BB is actually good IMHO.
Like, good for them. Likely bad for the future of the market. I don’t think that would happen without the rating agency being corrupt basically
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u/ApathysEdge 19h ago
Junk status when you want to throw shade and high yield when you want to play it up.
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u/ApathysEdge 1d ago
A notch below investment grade is also known as fallen angels. Likely people see this as a good starting point, or not.
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u/hallucehistory 1d ago
Did the AI hallucinate “Kroll Bond Rating Agency” for this story?
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u/ThatBankTeller 1d ago
I work in Credit Risk, Kroll is much easier to get a “passing grade” with, compared to IDC, Moodys, or Fitch, so this tracks.
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u/hallucehistory 1d ago
I kinda figured that might be the case. Does anyone take their ratings seriously?
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u/ThatBankTeller 1d ago
In the credit space we weigh KBRA, IDC, and S&P, with weights being arranged different depending on asset size, and a few other misc metrics.
I know how much we pay for a license to access the ratings so it’s gotta be worth something lol
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u/philipwhiuk 1d ago
I think the rough idea is not “how much should we value it” it’s “how easy will it be to shift off our books if we have to”
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u/Odd-Angle1818 1d ago
This is fascinating insight I had no idea. You effectively rate the rating agencies ratings.
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u/Sufficient_Habit5091 1d ago
I kinda laughed too like Troll rating agency.
But apparently it's a recognized rating agency and ETFs can buy even if they rate it.
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u/TomatoSpecialist6879 Paper Trading Competition Winner 1d ago
They use the full name first for some reason, most people know them by the acronym KBRA instead which the article later reverted back to using
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u/Better-Compote399 1d ago
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u/Better-Compote399 1d ago
Nah, maybe some of them do. Most of them are just idiots following the hype train.
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u/Alwayslearning1993 1d ago
AI is seen more as a high stakes winner takes all race than prolonged competition. Essentially the thought is that the first to achieve AGI capable of reliably self improving cannot be caught or outpaced by other models because it scales exponentially and infinitely. That’s why the industry is taking such high risk debts, to be the first one there.
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u/Sufficient_Habit5091 1d ago
But what we're seeing in reality is everyone neck to neck. And open source very close.
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u/Legitimate_Concern_5 1d ago
Yep they’re all literally using the same architecture and technology. There’s no differentiation at all except their ability to keep their servers running.
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u/HystericalSail 1d ago
And the fierce competition for talent. They're hoping to be the one that hired this generations Turing, the ultra-star that proves to be a competitive advantage.
So far no such one true AI god of employees seems to have been recognized.
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u/TopTierMids 3h ago
No but some of them have secured mind meltingly large contracts to put out incremental updates to a product that makes the company no money.
The only think missing from the circus is the makeup at this point.
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u/gryffon5147 8h ago
What happens when all these chips that they're buying become 5, 10, 15 years old - do they keep doing $10B+ financings to get new replacement hardware?
Infrastructure ages, and they're not even turning a profit yet.
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u/Sufficient_Habit5091 8h ago
Dotcom we were actually really lucky.
All that fiber we laid down in excess, 90% remain unused for a decade. While engineers at the time had no idea, later we discovered how to greatly improve their efficiency with upgraded lasers and transceivers on the ends without digging up all those cables.
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u/TopTierMids 3h ago
Yes. People comparing this to 2001 are missing one crucial detail: the infrastructure for AI is costly to MAINTAIN, let alone keep modern. With fiber, you could play with physics and improve devices at the end nodes as you said. The fiber can last decades without having to be touched.
With a GPU, a 1kW card is burning 1kW at maximal load no matter what. You can maybe improve the algorithm running on it, but the way they build hardware (and have been for a while now) is with specific target applications in mind...so uh...likely moderate-at-best gains. Even then, the lifecycle is 2-3 years.
This shit is so cooked.
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u/Medium_Web_1122 15m ago
You don't know what you don't know.
How can you confidently claim we know the limits to GPU's today, when we didn't know the limit to fibers at the time?
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u/isaiddgooddaysir 1d ago
No one is achieving AGI this decade…. And probably not with a LLM model.
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u/dbgtboi OLDEST ACCOUNT ON WSB 1d ago
AGI doesnt even matter when current LLM can do everything you want
It's like having a gpu that can do 600fps at 8k when all you need is 120hz at 4k, anything above current llm tech is overkill
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u/SourceNo2702 1d ago
It does matter. Without AGI, you have to spend exponentially more money every year to build more data centers. Eventually you hit a limit, and the AI stops being useful because you can’t train it on new data.
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u/Zaorish9 19h ago
Yup, theres so much ai text and ai code out there now that it's starting to train itself on itself
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u/viral3075 18h ago
that's only true if you need a new frontier model because you told investors you would replace all labor with a chatbot. but if there's only moderate demand for specialist models, you don't need new data centers
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u/Medium_Web_1122 13m ago
Anthropic engineer claims 9 months before Claude does a better job than their own ai researchers
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u/ShowingCharacter 1d ago
How can you say this with certainty 😭
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u/New_Salamander_4592 1d ago
because matrix math scales like shit and that's the biggest scaling part of these shitty LLMs
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u/Be_quiet_Im_thinking 1d ago
So AI companies should be throwing their compute at that problem instead of other math problems.
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u/New_Salamander_4592 1d ago
that's the fun part about matrix math, you can't really shortcut it at all. it's incredibly inefficient and such a bitch to do by hand.
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u/TopTierMids 2h ago
When you have to do matrix operations, there ain't many ways to simplify it.
Think of it this way: your monitor has a resolution of 1980x1020 (or whatever, I forget the exact numbers). You want to apply some transform to each pixel.
Is there a way to shortcut this? Nope. You must process each one, even if you use windowing, some process has to scale it up later for the full display.
Same shit with AI.
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u/Appropriate-Text-597 1d ago
Because there are several Turing award winning computer scientists who have said as much. LLMs will never lead to AGI.
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u/sobe86 1d ago
Is there unanimous agreement on that amongst that group though? I know Yann LeCun thinks this but his predictions on what LLMs cannot do have all been wrong so far...
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u/PartyClock 23h ago
Yann is in the business of selling AI, so that should very much be kept in mind when hearing what he says.
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u/Appropriate-Text-597 18h ago
Unanimous amongst anyone who thinks critically. The scientific literature is clear at this point.
Edit: Think bitter lesson
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u/Julzjuice123 1d ago
No. There isn't.
This guy is using his feelings as facts. The primary goal of all big AI Tech right now is to develop their AI to be experts at researching AI. This is literally their end goal. All of them.
Replacing the workforce and what not is just a secondary step to having an AI that can do proper research to advance itself. And LLMs can absolutely do that. Or are getting there really fast.
So no. We don't know how far can Frontier LLMs go. There is no consensus among top researchers.
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u/viral3075 18h ago
have you ever once used an LLM? they're not intelligent. they're predictive. you don't get intelligence from mashing words together. you might as well rip out random pages from books and it would be just as comprehensible
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u/Sybertron 1d ago
Unless those other models, just copy that lead model...
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u/Alwayslearning1993 1d ago
Training a model with a distillation method isn’t instantaneous. It could take months. By that time, the original model could already be generations ahead with self training
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u/SourceNo2702 1d ago
If any of these AI companies actually read the fucking research study they based LLM’s off of, they would’ve noticed that Transformer models can’t modify their own underlying weights.
Which is, you know, sort of a requirement for AGI to be possible.
They’re just pissing away money hoping they’ll magically fix the problem with enough data before the investors realize they can’t do it.
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u/somewhataccurate 1d ago
yeah the experts are stupid and you are a genius
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u/Broad-Foundation-526 1d ago
Dude we just need to pray they read this reddit comment so they'll understand
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u/SourceNo2702 23h ago
Those “experts” just cloned the github repo and slapped their own label on it. They don’t even understand how their own AI works, they just study how feeding it data changes the output.
The actual experts wrote a paper on why it isn’t possible 2 years ago.
https://arxiv.org/html/2402.08164v2
TL:DR, it is fundamentally impossible to make AGI from Transformer architecture due to “complicated math reasons”. They theorize that it may be possible to use Transformer architecture in conjunction with another technology to fix these issues.
Keyword theorize. That’s right, AI companies are betting the entire economy on technology which hasn’t even been invented yet. There’s not even a framework for what it might LOOK like.
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u/Rock_or_Rol 19h ago
Okay, they can’t operate on themselves, but can they operate on each other? Like two mirrors facing one another
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u/Electrical_Taste_954 18h ago
I know it makes you feel better to pretend we aren’t actively speeding as fast as possible to our own extinction, but that is what is happening.
You’ve got another 2-3 years to make money. Good luck!
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u/dancinggrass 12h ago
The results based on Computational Complexity come with a different set of caveats: They hold only if certain yet unproven, if widely accepted, conjectures are true, and even then they are asymptotic, holding for instances larger than an unknown size, for which the assumed asymptotic conjectures take effect. Complexity results such as these are mere warnings that these problems have a fundamental incompatibility with with the Transformer architecture, and therefore one should not expect that these problems to be solvable in practice ad infinitum.
So if I understand correctly,
The paper does mention it relies on unproven (albeit widely acceptable) conjectures (L != NL) due to the log N memory space and even if the conjectures are true, we don't know what the actual limits are.
It also seems to prove for single-pass of an LLM, but doesn't say that anything for multi-turn chat (cmiiw unless I missed something?). It does mention CoT and we do have a bigger lower bound proven, but does not really mention that it's impossible for LLM can be part of an AGI tech. In fact, we know it can solve NL problems in practice with agentic loop, the I don't know if the bound in the paper still relevant or not?
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u/Medium_Web_1122 5m ago
Using a 2 year old paper to prove something is not exactly sufficient.
The only thing the paper proves is that transformers have technical limitations. The paper gives reasons for why the authors believe AGI isn't achieveable with the architecture at the time, it didn't prove this was impossible.
"it is fundamentally impossible to make AGI from Transformer architecture"
Nowhere does the paper state this.
I know this is WSB, but it would be nice to do the research so you don't accidently spread misinformation
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u/SourceNo2702 22h ago
You do know who Christos Papadimitriou is right? The guy who wrote that paper?
He is the most brilliant and influential mind in the field. John Computer Science himself. He knows what’s possible because he literally invented the underlying math researchers used to publish the original “Attention is All You Need” paper that started all this bullshit.
It doesn’t matter what Karparthy says, he has no idea what he’s talking about.
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u/somewhataccurate 23h ago
i watch Opus solve novel problems through experimentation on a regular basis, that is more intelligence than many people
im gonna keep doing what i do and you keep pretending its all a farce or some shit idc
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u/SourceNo2702 23h ago
Let me know how that’s going in 3 years when your Opus tokens cost $100 per MTok input and $500 per MTok output with no subscription options.
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u/viral3075 18h ago
they literally cannot solve novel problems. they can only return what is already available in their training data. that's what weights are
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u/somewhataccurate 15h ago
i have watched it write 4 scripts tweaking different parameters and then compare the output of all 4 to figure out what it needs to tweak to get to a solution.
i understand this is reddit which means your iq is lower than my thermostat setting, but you should try and not be so retarded.
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u/HarbaughHeros 17h ago
It can write a python script to solve a problem (if applicable). Say for example the answer to 77*55 is not in its training data. It can and will often write a python script to solve some novel problem.
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u/Obvious_Advice_6879 15h ago
The basic premises of this paper are clearly false. LLMs are doing exactly the things they said are not supposedly not possible already (eg complex mathematical reasoning).
As someone with knowledge of the field, online learning is completely within the realm of possibility for LLMs (and is nothing new — big deep learning systems for ranking at Google and Meta have been doing it for years). There’s no architectural blocker to doing it, but they don’t do it because it would create lots of stability issues if it’s not done with the right guardrails. Models could suddenly degrade over time, or develop unpredictable behavior.
But just like LLMs solving math problems, this is likely a temporary barrier. It’ll probably start in lab conditions with tightly defined criteria of what counts as learning signal, but it’s likely that someone will make a self improving LLM in the not too distant future. Then it’ll be a race to who can enable it to learn the most accurately from different types of interactions.
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u/titanomachiatto 15h ago
They modify the weights by filtering data, creating new RL environments, improving the algorithms and hyperparameters, and running the next training run which produces the next set of weights. You seriously think that the tens of thousands of experts controlling trillion dollar companies didn’t think of this? That you, oh genius redditor, had some fundamental insight about recursive self improvement that everyone else missed?
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u/Just_Look_Around_You 6h ago
Yeah this is always so funny that people think they know more or think more about this than people with billions into it
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u/opggElonMuskForPres 5h ago
He may not be wrong. From what I’ve learned Demis Hassabis who is a great and grounded voice on this topic has said essentially the same thing. LLMs are highly unlikely to underpin AGI.
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u/danted002 1d ago
This is a catch-22. They are so off from AGI and they don’t know how to stop it collapsing everything.
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u/Be_quiet_Im_thinking 1d ago edited 1d ago
People have killed for less than some people have invested in AI companies. I can see an argument not to declare AGI and just keep it secret.
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u/Sufficient_Habit5091 1d ago edited 1d ago
Anthropic secured a credit rating one notch below investment grade from Kroll Bond Rating Agency earlier this year, marking a strong grade for the AI start-up
The Claude maker received an issuer rating of double B plus from KBRA in June, the highest speculative-grade score, in the run-up to securing a $35bn chip financing led by Apollo, according to documents seen by the FT.
The rating action, which has not previously been reported, shows Anthropic is close to achieving the investment-grade status that would allow the start-up to lower its borrowing costs and tap a wider pool of institutional investors including life insurance companies and pension funds.
KBRA is a smaller rating agency compared with Moody's, S&P and Fitch, which will ultimately determine Anthropic's post-IPO credit status.
KBRA's rating came despite Anthropic's limited financial disclosures. The report was based on select financial information Anthropic provided, including revenue, adjusted operating income and annualised run-rate revenue in the first quarter of 2026, as well as an internal forecast for second-quarter results, according to the documents.
However, Anthropic's disclosure to KBRA excluded several important financial metrics, including free cash flow and earnings before interest, taxes, depreciation and amortisation. Credit rating analysts had to come up with their own estimates based on assumptions, the documents show.
One more notch up and investment grade bond ETFs, state worker pension funds, insurance companies etc. will start buying. IPO may be good enough to push them there.
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u/Briefcase-3695 1d ago
BB+ rating to a company that did not disclose several important financial metrics. One notch below a grade where pension funds can invest in it. Is this 2007 again ?
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u/prank_mark 1d ago
It's the worst of 2007 and 2002 combined. Currently 40% of the S&P500 is in the top 10 companies, and 9 of those are AI (adjacent). In the dot-com bubble it was 20% and 4 of the top 10.
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u/Delicious-Muscle4966 23h ago
Where does it say they didn’t provide important metrics? They provided the required information for rating like every other issuer does. Also pension funds can invest in leveraged loans, IG rating is nominal in expanded investor universe in that context, mostly a cost of capital item at that point and loan security point.
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u/Briefcase-3695 15h ago
Are you mentally challenged or commenting without reading the linked article?
This is literally in the article
“However, Anthropic's disclosure to KBRA excluded several important financial metrics, including free cash flow and earnings before interest, taxes, depreciation and amortisation. Credit rating analysts had to come up with their own estimates based on assumptions, the documents show.”0
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u/Soberdonkey69 🦍🦍🦍 1d ago
It’s amazing how they get a junk rating, while these banks want to value Anthropic at $2 trillion. Absolute scammers to make everyone hold the bag when they IPO
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u/sf_cycle 8h ago
The entire economy is nothing but scams at this point. It’s a fucking disgrace. Calls.
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u/No_Ganache_1338 1d ago
If they fail even one funding round it is over. The impact will smoke hyperscalers as well because they are going to have to fire sell all of their GPUs.
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u/longGERN Hog Fucker 1d ago
Why would the hypers sell the GPUs that they are using for their own business and models. Or do you mean anthropic sells theirs? Which also doesn't make sense because theyd need them to survive
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u/Brent_the_Ent 1d ago
The hypers loaded debt to buy everything in anticipation of increased revenue through companies like anthropic, if the core market runs out of investor cash they will be in a terrible fiscal position. And liquidate until the business stabilizes or to payback creditors. It’s really simple.
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u/Funny_Information 1d ago
You could have just said you don’t understand the industry beyond headlines and are regarded.
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u/longGERN Hog Fucker 1d ago
Ok Mr simple. Wheres your summary of how much revenue is attributable to open/chat?
Meta doesn't have any.
Amazon and Google will continue to have a billion other customers
Maybe there will be a brief stock dip but I don't think the current prices price in continued open/anthropic immense spend.
So, not that simple, unless crystal ball
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u/SpicyElixer 15h ago edited 15h ago
This is the exact opposite of what would happen. A funding collapse would actually be a massive win for hyperscalers mid to long term.
Google and Microsoft buy servers with real cash flow, not junk debt, so they aren't fire-selling anything. Instead, wiping out the leveraged buyers kills the bidding war and ends the scalper prices they're currently forced to pay for chips.
Cheaper GPUs mean an immediate recovery in free cash flow and way less depreciation drag on their balance sheets going forward. If anything, hyperscalers would just scoop up those liquidated GPUs for pennies on the dollar.
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u/WhyAreYallFascists 1d ago
To who? I just need to see one company profit off of using a GPU. And what’s with the GPU focus still? Don’t they need inference now not training?
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u/exgeo 1d ago
Why? They’re about to go public at like $1T+
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u/prank_mark 1d ago
Sure buddy
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u/TheKingInTheNorth 1d ago
True. It’s going to be close to 2T. And it’ll dip for a bit and then shortly become the most valuable company on the planet.
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u/SpicyElixer 15h ago edited 15h ago
These labs and neoclouds need to get reality checked. And the chipmakers margins need to lose their scalper price margins if this AI stuff is going to work. Sooner the better. I don’t care if it hurts my chips position. It’s better overall if the economics are sustainable and the growth is organic and proven before it’s funded by more trillions.
Debt panic is good. Propped up demand and reckless funding is a contagion. These unproven chip customers need to get fucked. And Nvidia margins need to get fucked. It’s healthy.
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u/fightin_blue_hens 1d ago
Does this mean it is the shittiest junk bonds you've ever seen or the best of the junk bonds avaialble
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u/Spiritual-Maybe-6720 1d ago
Yeah which ever institutional or pension investors that buy into this should go to jail
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u/mold_motel 1d ago
I still don't get how to automate my stupid office job so I can gamble all day. That's what's important.
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u/Substantial-Cup-189 22h ago
Im so sick of it. Wish we could short one of those big ai giants into the ground
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u/dentastic 15h ago
You can short its creditors. Anthropic has over 400B that it cant cancel. Just short the ones that will never see a dime of that and have already booked it as RPO
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u/ElSupaToto 1d ago
It's hard to have a non meme conversation about it but what's interesting is that even if there is a moat for Anthropic or Open AI vs open models, the difference between their models is quite small. In the .com bubble, Google WAS the best search engine, hands down. Amazon was the best book store etc... here at least 3 companies (with Google) are on the exact same market.
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u/ferndogger 1d ago
It’s fine cuz the HFT algos are now controlled by AI, and the AI is just concerned with self preservation.
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u/TFCNU 1d ago
Oracle: Bonds are almost junk. Company is in massive trouble.
Anthropic: Bonds are almost not junk. Bullish!
What are we doing?