The reception of Anthropic's most advanced and expensive AI model, Fable 5, among enterprise clients has been notably cool, a trend that is beginning to challenge the long-standing business premise of frontier AI labs that relies on flagship models to drive revenue.

According to a Sunday report citing payment processor Ramp's analysis of spending data from 70,000 businesses, Fable 5—released in early June—has accounted for only about 11% of total spending across Anthropic's entire product lineup more than two months post-launch, with its growth momentum clearly stagnating. This breaks the historical pattern where corporate users tended to gravitate toward the most powerful models. Analysts and Anthropic investors attribute this shift primarily to Fable 5's steep pricing and the fact that older versions are already adequate for most business requirements.

The weak demand for Fable 5 is raising questions about the sustainability of Anthropic's business model. Frontier AI labs have traditionally concentrated billions of dollars in R&D spending on training larger and more complex models. If enterprise clients continue to pivot toward lower-cost alternatives, this fundamental logic faces a significant challenge.

This development comes at a critical time as Anthropic prepares for what is anticipated to be the largest IPO in history. Investors expect the company to be valued at $2 trillion or more, with a listing potentially commencing as soon as next month. Anthropic's July revenue fell short of the most optimistic projections—some investors had predicted annualized sales would surpass $80 billion—but the company informed shareholders last week that annualized revenue for July reached $65 billion, up from $47 billion in May.

The shift toward cheaper models signals the fading luster of frontier AI

Ramp's data reveals that Anthropic's own Opus 5—a lower-priced, smaller-scale yet still high-performing model—has already surpassed Fable 5 in corporate spending since its release in late July. Meanwhile, OpenAI's GPT 5.6, priced significantly below Fable 5, has helped its parent company's annualized revenue jump 35% so far this quarter, now exceeding $40 billion, reversing the downturn OpenAI experienced earlier in the year.

The availability of inexpensive open-source models has also provided corporate clients with more alternatives, further compressing the pricing power of top-tier US AI labs. Ramp's chief economist, Ara Kharazian, pointed out that data retention regulations imposed by the Trump administration have also hindered the adoption of Fable 5.

In early June, the Trump administration, citing national security concerns, forced Anthropic to temporarily withdraw the model, which significantly impacted Anthropic's June revenue growth. It wasn't until July 1 that the government approved Fable 5's relaunch, lifting the related restrictions. Analysts and investors note that with the relaunch approval, concerns about further restrictions on Fable have largely dissipated, and political uncertainty has receded in customers' model selection decisions, with price and performance now taking precedence.

Miles Clements, a partner at Accel, which has invested nearly $1 billion in Anthropic, remarked that "most people don't need to operate at the frontier level," and the era when corporate clients uniformly chose the most powerful models was "not a sustainable phase."

Rapid growth masks underlying concerns, casting uncertainty over IPO prospects

Despite these pressures, Anthropic's overall growth trajectory remains robust. The company's revenue has grown nearly sevenfold since the start of the year, achieved its first adjusted operating profit in the second quarter, and has indicated to investors that it expects to be profitable again in the third quarter. According to sources familiar with the matter, Anthropic has also informed investors that it now serves 6,000 customers with annual spending of $100,000 or more.

However, the structural issues revealed by weak Fable 5 demand are prompting questions about the sustainability of Anthropic's business model. Frontier AI labs have long concentrated billions in R&D on training ever-larger and more complex models. If enterprise customers continue shifting toward cheaper alternatives, this logic faces a fundamental reckoning.

Kharazian admitted that predicting Anthropic's trajectory over the coming months is "almost an impossible task." "If you extrapolate from previous trends, you would expect Anthropic to dominate the market. But because OpenAI's latest model has performed well while Fable has underperformed, the opposite has occurred."