Anthropic’s best AI model struggles to attract users as cheaper tools thrive

Anthropic’s US customers are using cheaper alternatives to its most powerful AI tool, raising questions about the group’s high-spending business model ahead of what is expected to be the biggest IPO of all time.

Spending on Fable 5, Anthropic’s largest and priciest model, has plateaued at only about 11 per cent of overall outlay on the company’s tools, more than two months after its release, according to spending data from 70,000 companies collected by payments group Ramp.

This breaks a pattern of corporate users defaulting to the most powerful models. Analysts and investors in Anthropic said the change was primarily driven by Fable’s high price and the fact that older models are capable of handling the bulk of business demands.

If sustained, the shift could radically alter the business model of frontier labs, which have until now funnelled the bulk of their multibillion-dollar development spending towards training ever larger, more sophisticated models.

“Most people don’t need to operate at the frontier,” said Miles Clements, a partner at Accel, which has invested close to $1bn in Anthropic. The period in which customers tended to choose only the frontier models “was not a durable era,” he added.

Breakthroughs in intelligence remain essential to fulfil the companies’ loftiest promises, such as curing disease, and to attract the best researchers. But they will increasingly be showcases, said Clements.

Fable 5’s launch in early June was disrupted by the Trump administration, which forced Anthropic to withdraw the model, citing national security concerns.

Concerns about further limits on access to Fable have receded since the administration greenlit its relaunch on July 1. Political uncertainty has become a secondary factor, compared with price and performance, in driving clients’ model choice, according to analysts and investors.

The lower demand for Fable, which has seen a slower rate of take-up than previous cutting-edge releases, adds to the uncertainty for Anthropic ahead of its IPO, which investors anticipate will value the group at $2tn or more and could come as soon as next month.

Anthropic’s revenue in July undershot the most bullish expectations from investors, who projected annualised sales would cross $80bn. Anthropic told shareholders last week that its revenue last month hit $65bn on an annualised basis, up from $47bn in May.

Still, the start-up led by CEO Dario Amodei continues to grow at a blistering pace, with revenue increasing nearly sevenfold since the start of the year.

Anthropic recorded its first adjusted operating profit in the second quarter of the year and has guided investors that it is likely to be profitable again in the third quarter, according to people with knowledge of the matter. It also told investors that it had 6,000 customers that spend $100,000 annually or more.

Anthropic declined to comment.

Businesses are trying to contain spending on AI by using models more efficiently rather than always going with the most sophisticated option.

The availability of cheap, open-weight models from China and elsewhere has provided customers with more alternatives to the leading US labs, while there are also signs that Sam Altman’s OpenAI is gaining ground after slipping back for much of 2026.

The ChatGPT maker’s annualised revenue has jumped 35 per cent in the quarter to date and is now over $40bn, with the launch of GPT 5.6 in July jolting the company’s performance after a sluggish start to the year, according to people with knowledge of the matter.

GPT 5.6 is priced significantly lower than Fable 5. Anthropic’s own Opus 5, a smaller but nevertheless potent model that comes at a lower price, has already surpassed Fable in terms of business spending since its launch in late July, according to Ramp.

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Anthropic’s revenue growth took a hit in June, largely due to the US government’s decision to limit the rollout of Fable, but has since rebounded.

Data retention rules imposed by the Trump administration have also hampered Fable’s adoption, according to Ara Kharazian, chief economist at Ramp.

Kharazian said predicting the company’s trajectory even months ahead is a virtually impossible task. “If you impute previous trends you expect Anthropic to own the market. But because [OpenAI’s newest model] was so good and Fable underperformed, it’s been the reverse,” he added.