Former Google CEO Eric Schmidt says artificial intelligence “is not a bubble,” pointing to Anthropic‘s explosive revenue growth as evidence that customers are paying for technology they find useful.
“When I was CEO at Google, we set the revenue growth record. They smashed it more than twice the speed as we did,” Schmidt told Nicolai Tangen, head of Norway’s sovereign wealth fund, on the In Good Company podcast.
“That’s real growth there. It’s not fake. It’s real money with real customers who are paying for something useful in their eyes.”
Schmidt, who led Google, now part of Alphabet Inc. (NASDAQ:GOOGL), from 2001 to 2011, did not specify how he calculated the comparison.
He also has a substantial financial interest in Anthropic’s success. Bloomberg reported that Schmidt owns about 1% of the company, a stake potentially worth $15 billion to $20 billion at valuations discussed ahead of its anticipated IPO.
Anthropic’s Growth Comes With Enormous Costs
Anthropic told prospective investors that third-quarter revenue jumped 45% to $16.8 billion, up from $11.6 billion in the previous quarter and $4.7 billion in the first, Reuters reported.
The company also told investors it was profitable on an adjusted basis, although revenue growth slowed after more than doubling between the first and second quarters.
A draft IPO prospectus reviewed by Reuters revealed an $80.7 billion net loss in the first half of 2026, including a $72 billion noncash accounting charge tied to convertible financing.
Anthropic spent nearly $9 billion on computing and infrastructure during those six months and has committed at least $518 billion over a decade.
China Could Win the AI Race on Users
Schmidt warned that Western AI companies could lose the global battle for customers even if they continue building more advanced models.
He estimates Chinese models are about six months behind their American rivals, but believes free alternatives could dominate in poorer countries.
“If you define losing as users, the vast majority of the world will use the free Chinese models rather than the more expensive Western models,” he said.
That raises a question for Anthropic and its rivals: how much of the global demand for AI can they convert into paying customers?
Polymarket Traders See Limited Risk of a 2026 Bust
On Polymarket, traders assign 9% odds of an AI-industry downturn by Dec. 31, with nearly $2.5 million traded.
The contract requires three specified events within a single 90-day period, including potential triggers such as Nvidia Corp. (NASDAQ:NVDA) falling 50% from its all-time high or Anthropic or OpenAI declaring bankruptcy.
Those conditions measure a severe industry downturn, not whether AI stocks are overvalued.
Concerns about AI spending have already weighed on infrastructure providers, with CoreWeave Inc. (NASDAQ:CRWV) recently hitting a 52-week low amid mounting AI debt concerns.
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