Anthropic's Priciest AI Model Struggles for Adoption as Cheaper Rivals Gain Ground Ahead of Its Record IPO

Anthropic's most powerful and expensive AI model, Fable 5, has struggled to gain significant traction among corporate customers in the United States, with businesses increasingly opting for cheaper alternatives even as the company prepares for what investors expect to be the largest initial public offering in history, according to the Financial Times.

Spending on Fable 5, Anthropic's largest and priciest model, has plateaued at only about 11% of the company's overall business spending on its tools, more than two months after its release, according to spending data from 70,000 companies collected by payments company Ramp. That figure represents a notable break from an earlier pattern in which corporate users had generally defaulted to whichever model a given AI lab positioned as its most powerful offering.

Analysts and investors in Anthropic attributed the shift primarily to Fable's high price combined with the reality that older, less expensive models remain capable of handling the bulk of everyday business demands. Miles Clements, a partner at venture capital firm Accel, which has invested close to $1 billion in Anthropic, offered a broader assessment of the trend reshaping how companies choose which AI models to use. "Most people don't need to operate at the frontier," Clements said, adding that the earlier period in which customers tended to gravitate exclusively toward the most advanced available models "was not a durable era."

Clements suggested that breakthroughs in raw model intelligence remain important for AI labs primarily as a way to fulfill ambitious long-term goals, such as advancing disease research, and to continue attracting top research talent, but that such flagship models will increasingly function as showcases rather than as the primary products driving day-to-day corporate revenue.

Fable 5's launch in early June was disrupted almost immediately by the Trump administration, which forced Anthropic to temporarily withdraw the model over national security concerns tied to export control regulations, a suspension the company has previously confirmed publicly. According to the Financial Times, concerns about further restrictions on Fable's availability have eased since the administration approved its relaunch on July 1, and political uncertainty has since become a secondary factor compared with price and performance in shaping how corporate clients choose among competing AI models.

The comparatively slow adoption of Fable adds a layer of uncertainty for Anthropic as it approaches its anticipated initial public offering, which investors expect could value the company at $2 trillion or more and could occur as soon as next month. Anthropic's July revenue reportedly fell short of the most bullish projections from investors, who had anticipated annualized sales crossing $80 billion. According to people familiar with the matter, Anthropic told shareholders last week that its revenue for the month hit $65 billion on an annualized basis, up from $47 billion in May.

Despite falling short of those more optimistic projections, Anthropic has continued growing at a rapid pace, with revenue increasing nearly sevenfold since the beginning of the year. The company recorded its first adjusted operating profit during the second quarter of the year and has guided investors that it expects to be profitable again in the third quarter, according to people with knowledge of the matter. Anthropic separately told investors it now counts 6,000 customers that each spend $100,000 or more annually on its products. Anthropic declined to comment on the Financial Times' reporting.

The broader dynamic reflected in Fable's slower adoption curve points to businesses increasingly focused on containing overall AI spending by deploying models more efficiently, rather than automatically defaulting to whichever option represents the most technically sophisticated choice available. That shift has been reinforced by a growing supply of inexpensive, open-weight AI models originating from China and other countries, giving corporate customers a wider range of lower-cost alternatives to the leading U.S. AI labs.

Competitive pressure has also intensified from within the U.S. market specifically. OpenAI, led by chief executive Sam Altman, has reportedly regained momentum in recent months after slipping back for much of the year. According to people familiar with the matter, OpenAI's annualized revenue jumped 35% during the current quarter and now exceeds $40 billion, with the July launch of GPT 5.6 credited with reinvigorating the company's performance following a sluggish start to 2026. GPT 5.6 is priced significantly lower than Fable 5, according to the Financial Times.

Notably, Anthropic's own smaller and less expensive model, Opus 5, has already surpassed Fable 5 in terms of overall business spending since its late-July launch, according to Ramp's data, suggesting the pricing dynamics reshaping customer behavior are affecting Anthropic's internal product lineup as much as its competitive standing relative to OpenAI and other rivals.

Anthropic's revenue growth took a measurable hit in June, largely attributable to the U.S. government's temporary restriction on Fable's rollout, though revenue has since rebounded. Data retention rules imposed by the Trump administration have also continued to complicate Fable's broader adoption, according to Ara Kharazian, chief economist at Ramp. Kharazian described the inherent difficulty of forecasting Anthropic's trajectory even a few months into the future given how quickly competitive dynamics in the AI sector have shifted. "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," Kharazian said.

As Anthropic continues preparing for its anticipated public offering, the company's ability to demonstrate sustainable revenue growth and profitability, even as its most advanced and expensive model struggles to gain the same traction as its lower-cost offerings and rivals' competing products, is likely to remain a closely watched factor among prospective investors evaluating the company's business model heading into what is expected to be one of the largest and most closely scrutinized technology IPOs in history.