Why Anthropic is On Track to Beat OpenAI to a Profit

Summary

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WSJ What’s News – Episode Summary

Episode: Why Anthropic is On Track to Beat OpenAI to a Profit
Date: November 11, 2025
Host: Caitlin McCabe, The Wall Street Journal

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Episode Overview

This episode spotlights major business and political updates, with a deeper dive into why AI startup Anthropic is projected to turn a profit ahead of rival OpenAI. The show also explores Europe's heightened security concerns in the face of escalating hybrid attacks. The tone is brisk, informative, and direct, characteristic of a morning news roundup.

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Key Segments & Discussion Points

1. U.S. Government Shutdown Nears Conclusion

Timestamps: 00:19–03:22

• Senate passes spending package to potentially end the longest government shutdown in U.S. history.
• Division among Democrats: Notably, eight Democrats sided with Republicans on a pivotal procedural vote.
• House vote imminent: Speaker Mike Johnson commits to a swift vote once the Senate bill arrives.
• Healthcare trade-off: Democrats disappointed over the lack of extended Affordable Care Act subsidies.
• Electoral Implications: Most Democrats advancing the bill are either retiring or not up for re-election.

Notable Quotes:

• “This has been a very long road, quite literally the longest shutdown in history.” – Senator John Thune (01:31)
• “We’ve seen very angry statements coming out of House Democrats...they see this compromise as not accomplishing the goal they set out on health care.” – Richard Rubin, WSJ (02:44)

2. Impact of Shutdown on Air Travel

Timestamps: 03:22–03:44

• Prolonged delays and cancellations in air travel due to the shutdown.
• Quote: “There will be a hangover from this as we try to put the system back together.” – President of the Association of Flight Attendants CWA, via CNBC

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3. Anthropic vs. OpenAI: Who Will Profit First?

Timestamps: 03:44–05:27

• Financials revealed: Anthropic expects to break even by 2028, in contrast to OpenAI, whose operating losses could reach $74 billion that year.
• Strategy differences:
  • OpenAI: Heavy investment in infrastructure; lower margins; targeting mass consumer demand; rapid cash burn.
  • Anthropic: Leaner infrastructure spend; focuses on coding and business customers; higher margins.

Notable Discussion Points:

• OpenAI’s projected cash burn is 14 times that of Anthropic between now and 2030.
• OpenAI claims it could become cash flow positive more quickly if it wished but is betting on scaling up.

Notable Quotes:

• “OpenAI is spending really heavily on building out infrastructure... they are predicting enormous demand for their services going into the future. On the other hand, Anthropic is going for a fatter margin business.” – Sam Scheckner, WSJ Tech Reporter (04:21)
• “If indeed demand is there, OpenAI is going to reap the benefits... If there is a pullback, Anthropic could be more resilient.” – Sam Scheckner (05:04)

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4. SoftBank’s AI Bets

Timestamps: 05:27–06:15

• SoftBank reports sizable returns on its OpenAI investment and announces the sale of its Nvidia holdings for $5.8B.
• Shift from a defensive to an assertive, AI-focused investment strategy under Masayoshi Son.

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5. Global Trade Developments

Timestamps: 06:15–06:48

• President Trump signals tariff reductions for India (due to lower Russian oil imports) and Switzerland.
• Plans surfaced for China to ease rare earths exports to the U.S. using a validated end-user system, ensuring materials don't reach U.S. military suppliers.

Quote:
“Well right now the tariffs are very high on India because of the Russian oil and they've stopped doing the Russian oil... we’re going to be bringing the tariffs down.” – Donald Trump (06:15)

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6. Europe’s “Gray Zone” Security Crisis

Timestamps: 08:06–12:13

• Rise in hybrid attacks: Drone incursions, sabotage, and espionage activities attributed to Russia.
• Germany reports three drone incursions daily, with drones spotted over airports, military bases, defense industry sites, ports, and power stations.
• Sabotage extends to rail and undersea communication cables, and mailed bombs.
• Attribution challenges: Attacks carried out by proxies, making direct links to state actors difficult.
• Escalation in defense spending: European governments responding with greater military investment and sharper rhetoric against Russia.

Notable Quotes:

• “We see a wave of sabotage acts and surveillance activity and spying that seems to be targeting NATO members... as attempts to intimidate and divide and weaken.” – Bertrand Benoit, WSJ Germany Bureau Chief (08:28)
• “It's quite difficult to know what to do about it because it's happening at all sorts of levels... It involves actors... that may have been hired online to commit a one specific act and then discarded.” – Bertrand Benoit (10:47)
• “You could see [these disruptions] as a reaction to this rearmament in Europe that is quite unprecedented.” – Bertrand Benoit (11:26)

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Memorable Moments & Quotes

• On AI startups’ future:
  “If indeed there is a pullback, Anthropic could be more resilient.” – Sam Scheckner (05:04)
• On Europe’s precarious security:
  “[It] is precarious because... attacks are hard to attribute and happen on many levels.” – Bertrand Benoit (10:47)

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Important Timestamps

• Senate shutdown vote fallout: 00:19–03:22
• Anthropic vs. OpenAI profitability segment: 03:44–05:27
• SoftBank’s AI investments: 05:27–06:15
• Trump on tariffs & China rare earths: 06:15–06:48
• Europe’s hybrid attack ‘gray zone’: 08:06–12:13

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Summary Takeaways

• Anthropic’s leaner, business-focused model could make it the first major AI startup to break even, while OpenAI doubles down on scale and infrastructure betting on massive future demand.
• Europe faces an unprecedented array of hybrid threats, with sabotage and drone incursions blurring the line between peace and armed conflict, driving defensive spending and challenging government responses.
• U.S. political negotiations over government funding highlight intra-party struggles, with immediate and lingering impacts on public services and travel.
• Shifting global trade relations (tariffs, rare earths) and investment strategies (SoftBank’s AI pivot) reflect rapidly changing geopolitical and economic conditions.

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Transcript

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[Caitlin McCabe]

The bill to reopen the government now heads to the House as some Democrats turn on Chuck Schumer. Plus, we take a look at how AI startup Anthropic is poised to turn a profit more quickly than OpenAI and we explore Europe's unsettling new reality. It's caught somewhere between war and peace.

[Bertrand Benoit]

We see a wave of sabotage acts and surveillance activity in spying that seems to be targeting NATO members in Europe that are hard to explain other than as attempts to intimidate and divide and.

[Caitlin McCabe]

WEAKEN It's Tuesday, November 11th. I'm Caitlin McKay for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories moving your world. Today, a spending package to reopen the government has officially passed the Senate, paving the way for the longest shutdown in history to possibly end within the next few days. The passage last night follows a dramatic procedural vote Sunday that saw eight members of the Democratic caucus break with their party and vote al alongside Republicans.

[John Thune / Mike Johnson]

This has been a very long road, quite literally the longest shutdown in history. I am very, very happy to be able to say that we are coming to the end.

[Caitlin McCabe]

Republican Senator Majority Leader John Thune speaking there. Following the legislation's passage yesterday, attention now turns to the GOP controlled House which could vote on the measure as soon as Wednesday. Here's Republican House Speaker Mike Johnson.

[John Thune / Mike Johnson]

At the very moment that they do that final vote, I will call all House members to return to Washington as quickly as possible. We'll give a 36 hour formal and official notice so that we can vote as soon as possible to pass the amended CR bill and get it to the President's desk.

[Caitlin McCabe]

Within the Democratic Party, focus is now turning to Chuck Schumer, with angry progressive voters and party activists blaming the Senate minority leader for failing to keep his party in line. For weeks, Democrats had been united in demanding that Congress extend enhanced Affordable Care act subsidies in exchange for their votes. Journal Washington reporter Richard Rubin says now the party has little more than a guarantee that a vote on the matter will happen by the second week of December.

[Richard Rubin]

We've seen very angry statements coming out of House Democrats and Democrats across the country because they basically see this legislation, this compromise as not a compromise is not accomplishing the goal they set out for on health care and not getting enough out of the shutdown. So Democrats who voted for this and are advancing this forward are Democrats who are retiring. They're Democrats who aren't up for election next year. The real electoral pressure, the energy among Democrats is would have been to fight more, to fight harder to keep the shutdown going. And you'll see that reflected in all of these votes as we go forward through this week.

[Caitlin McCabe]

Even if the government reopens in the coming days, air travelers may not see immediate relief. Thousands of flights were delayed or canceled yesterday and more pain is expected. The president of the association of Flight Attendants CWA told CNBC yesterday that, quote, there will be a hangover from this as we try to put the system back together. Now investors may be getting some answers to the question many have been asking when will AI companies begin to turn a profit? We've been looking at the finances of Silicon Valley's two largest AI startups, with Anthropic on pace to turn a profit far more quickly than rival OpenAI. Documents obtained by the Journal show that Anthropic expects to break even for the first time in 2028, while OpenAI forecasts its operating losses that year to swell to about $74 billion. Tech reporter Sam Scheckner explains why the.

[Sam Scheckner]

Two companies are taking very different approaches to growing their business. OpenAI is spending really heavily on building out infrastructure and they have thinner margins and they are predicting enormous demand for their services going into the future. On the other hand, Anthropic is going for a fatter margin business. They are spending less on infrastructure and focusing on coding, for which their cloud chat bot is effective, and on business customers rather than a consumer business.

[Caitlin McCabe]

OpenAI is expected to burn 14 times more cash than Anthropic between now and 2030, but as Sam explains, whether it will pay off remains to be seen.

[Sam Scheckner]

If indeed demand is there. What you're going to see is OpenAI is going to reap the benefits of these huge investments and a company like Anthropic could be left behind, could just be too small. By contrast, if indeed there is a pullback, Anthropic could be more resilient. For what it's worth, OpenAI says that it could go cash flow positive much more quickly if it chose to, but it's betting heavily on these investments.

[Caitlin McCabe]

For now, OpenAI's approach is enriching one big investor, Japanese tech investment company SoftBank, which today said it booked billions of dollars of gains from its OpenAI investment. SoftBank reported a more than doubling in quarterly net profit and said it sold its entire stake in the chip giant Nvidia for $5.8 billion last month. The Tokyo based company, led by billionaire Masayoshi Son has been making bolder investments in AI over the reversing a years long defensive strategy. President Trump said he is looking at reducing tariffs on both India and Switzerland. Trump made the comments while speaking to reporters in the Oval Office saying he would bring down the 50% tariffs on imports from India.

[Donald Trump]

Well right now the tariffs are very high on India because of the Russian oil and they've stopped doing the Russian oil. It's been reduced very substantially. Yeah, we're going to be bringing the tariffs down.

[Caitlin McCabe]

Trump also said the White House is working with Switzerland to lower their tariff rate which stands at 39% with the exception of gold. He admitted that the country has been hit hard, saying the administration wants Switzerland to remain successful and we are exclusively reporting that China plans to ease the flow of rare earths and other restricted materials to the United States under a new so called validated end user system. The move will allow Beijing to fulfill its pledge to President Trump to allow the export of rare earths while ensuring they don't end up with US Military suppliers, which is a key concern for China. The mechanism that Beijing is considering is modeled on a US system in place since 2007 which clears certain Chinese companies to buy sensitive goods. China's Ministry of Commerce didn't respond to a comment request. Coming up as suspicious drones increasingly fly over NATO countries, Europe is finding itself not exactly at war, but not necessarily at peace either. We explore the continent's new gray zone after the break.

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[Caitlin McCabe]

Europe's leaders suspect Russia is behind a barrage of hybrid attacks that are rapidly changing the continent's security landscape. The Journal's Bertrand Benoit writes that Germany alone is facing an average of three drone incursions per day, putting Europe in a gray zone between war and peace. Bertrand, what exactly does that mean?

[Bertrand Benoit]

Well, it means that there is no armed conflict outside of Ukraine between Russia and the west or anyone else. But we see a wave of sabotage acts and surveillance activity and spying that seems to be targeting NATO members in Europe that are hard to explain other than as attempts to intimidate and divide and weaken in a way that is not quite military.

[Caitlin McCabe]

Yet you have this pretty stunning statistic in your story that Germany has three drone incursions a day on average. That's way more than people probably think. What are adversaries trying to achieve with these drones? And what do we know about where they're being cited?

[Bertrand Benoit]

So they're being seen over airports, and that's obviously the most visible part of it, because every time a drone flies over an airport, the airport has to be closed. And so it creates massive disruption. But they're also seen moving over military basis defense industry locations and critical infrastructure, things like ports and power stations. We can only guess at what the goals are of these drones, but they're probably attempts to destabilize, attempts to force the other side to react and to invest in defenses and to defend itself. And also, there's a fair amount of spying probably going on. There are some reports that these drones sometimes move information of up to 15 drones that are coordinated, and that suggests some kind of mapping or surveillance or filming happening.

[Caitlin McCabe]

I think it's important to note here that Europe isn't just facing drone incursions. Right. What other threats have we seen?

[Bertrand Benoit]

There have been instances of sabotage that have been going on for a long time, but are increasing. Cutting cables that power railway tracks and signals all the way to cutting undersea cables that transmit communication data, to mailing bombs in packages that travel on planes and have actually exploded in transit, not in the air, luckily, but on the ground. So all sorts of very disruptive and quite aggressive attempts to create disorder in Europe.

[Caitlin McCabe]

And so what does this all tell us about the security situation in Europe right now?

[Bertrand Benoit]

It is precarious because of that, and it's quite difficult to know what to do about it because it's happening at all sorts of level. It's difficult to attribute. It involves actors that sometimes have very minimal contact with Russia, that may have been hired online to commit a one specific act and then discarded or not used again.

[Caitlin McCabe]

And so, Bertrand, how do we expect governments to respond? Obviously, as your story notes, we've seen a ramping up in rhetoric from European officials. Just talking about this more. There's been a lot more conversation this year about increases in military spending. But. But where do things go from here?

[Bertrand Benoit]

It could be a number of things, I think. I'll give two examples. One is we've seen a tendency towards some European leaders to be more forceful about identifying Russia and pointing the finger at Russia and trying to explain why certain things were happening. Some European leaders have said that, for instance, there have been a lot of drone sightings in Belgium, and that may be related to the fact that Belgium is now under pressure to seize some Russian assets to help fund the defense of Ukraine. And then the other aspect is obviously all the military spending that is happening, it really is ramping up in Europe in a very, very big way. If all of this or most of these disruptions can really be attributed to Russia, you could see them as a reaction to this rearmament in Europe that is quite unprecedented.

[Caitlin McCabe]

That's the Journal's Germany bureau chief, Bertrand Benoit. Bertrand, thanks for joining us.

[Bertrand Benoit]

Thank you.

[Caitlin McCabe]

And that's it for what's news for this Tuesday morning. Today's show is produced by Daniel Bach. Our supervising producer was Sandra Kilhoff. And I'm Caitlin McCabe for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

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