Anthropic tells investors distillation revenue hit 5-7% of sales, now sharply cut
dotey · x · 2026-10-15
Citing four people with direct knowledge, the Financial Times reports Anthropic told investors on Wednesday that "distillation" revenue accounted for 5-7% of sales, and that it sharply cut this revenue in Q3. The Information reported the same range.
- Rival labs pay Anthropic's metered API to collect Claude outputs for training their own models. If Q2 revenue was $11.5B, that implies roughly $575M-$800M (an estimate, not a reported figure).
- The tension: Anthropic's terms of service explicitly prohibit using its service to "train a competing AI model."
- In February, Anthropic named DeepSeek, Moonshot and MiniMax as using 24,000 fake accounts to bypass regional restrictions and conduct 16M+ conversations with Claude for distillation.
- The cost: Anthropic, preparing for an IPO, posted Q3 revenue of $16.8B, up 46% QoQ (Q2 had more than doubled QoQ) — growth is slowing. It told investors losing distillation revenue will drag on this quarter, in exchange for making it harder for rivals to catch up by copying Claude.
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