It’s beginning to look like Anthropic waited too late to go public. Third-quarter revenue numbers disclosed to investors on Wednesday implied that its growth has slowed from the second quarter, which we reported is likely to put a ceiling on its IPO valuation. Anthropic might have been better off going public in June, when its growth was still spectacular. (Of course, a June IPO might have been impractical given that that’s when SpaceX went public.)

As things stand now, Anthropic’s slowing growth may remind investors of a longstanding question surrounding the company: How much of a moat does it really have? Yes, its AI models are as good as they get, but increasingly, businesses don’t need really expensive frontier models. As we wrote earlier this week, developers are increasingly opting for other models that are good enough for most tasks. Anthropic’s aggressive pricing has prompted companies such as Microsoft to cut its spending on the former’s models, we reported 10 days ago. (This trend seems to be spreading).

This was not the day to be a publicly traded neocloud (as young AI data center firms are known). As the market sold off on bad inflation data—reinforcing certainty of another interest rate hike—neoclouds tanked. These companies typically are borrowing a lot to finance expansion. The worst hit in the stock sell-off was CoreWeave, whose stock fell 15.5%, fueled by chatter that its bonds were falling to worryingly low levels. 

CoreWeave CEO and co-founder Michael Intrator was defiant. He told his staff, according to a spokesperson: “When you are building a new type of technology company, there will be periods of time when the market misunderstands and acts irrationally.” Yeah, right. The issue may be more that Intrator doesn’t understand investors. He sold CoreWeave stock every week between April and the end of September, securities filings show, while his fellow co-founders have also been selling regularly. That can’t help but undermine investor confidence in the company. Intrator could win some brownie points by pledging to stop selling his stock for a while.