Anthropic Aiming for $1 Trillion Valuation

Anthropic is planning to potentially raise money at a$1 trillion valuation. And it on the same day we have Cloudflare who is cutting more than 1,100 jobs. in kind of what they're calling an AI native reset. This is similar to what we've seen from uh Coinbase and what we've seen also from eBay. Snapchat has canceled their$400 million perplexity deal because their Q1 revenue for ad sales was$1.53 billion lower than they expected. And we also have a bunch of new tech

And information from the Elon Musk versus Sam Altman lawsuit. And a couple of really interesting revelations come out of that. One, apparently Microsoft was worried that OpenAI was going to quote unquote storm off to Amazon.

before they gave them a billion dollars. They're worried if they didn't give them enough money that they were gonna go leave them and go somewhere else. And so that's kind of what prompted Microsoft put a billion dollars in. Of course, that was probably the greatest investment in Microsoft history. So ended up being a great thing for them. We also learned that Microsoft was deeply satisfied.

skeptical of OpenAI ever achieving AGI before they put that billion dollars in. And one last juicy thing that we find is there's uh a bunch of text messages, about 78 text messages between Miriam Morati and Sam Altman after Sam Altman got kicked out.

Basically him trying to get himself rehired and trying to get the the then CTO of OpenAI to bring him back. And there's a bunch of viral videos that people are making of this where they're like turning it into emo punk songs. And anyways, it's hilarious. Um and oh last thing we gotta talk about is Apple's camera equipped AirPods. They're getting near to be in production and they'll have Siri and AI built into the AirPods. I'm

Super stoked about that, maybe the most stoked about all of these announcements. Let's get into all of it on the podcast. Let's kick this off with the big story, which is Anthropic coming in for a$1 trillion round of funding, according to the Financial Times. They've reported on this. According to the Financial Times, a lot of the demand on this is coming from number one, sovereign wealth funds in Asia and the Middle East.

And number two from Google and Amazon. Now when you do, you know, a colossal round like this at a one trillion dollar valuation, you have to have big companies or funds backing you. So this seems to be the source of where a lot of this is coming from.

Some people are saying, hey, look, this is Google and Amazon trying to get in and double their money really quickly before the IPO happens or whatever multiple they think they're going to be able to pull off before an IPO happens. The IPO is slated for the end of 2026. So at the you know, the end of this year could be in Q three or could be in Q four.

They're gonna be trying to IPO according to what we're seeing from Goldman Sachs and JP Morgan Chase. Both of them are pitching an anthro anthropic IPO between four hundred and five hundred billion dollars. So they are looking to pick up a lot of money.

Something that's interesting to me though with all of this is on the same day we're getting a lot of this news out, we're also getting news that Softbank apparently is going to cut its opening eye margin loan target by 40%. So they're targeted, they're bringing that down from 10 billion to 6 billion. Something a lot of people are talking about though is with the Goldman and JP Morgan four hundred to five hundred billion dollar IPO that they're looking at.

The secondaries market is currently pricing private shares of anthropic at about two X that. So there's a couple different theories right now. Either number one, the secondaries market is just super overvalued, which is definitely totally possible. or the bankers are trying to lowball the IPO price to try to create a rally on day one. Personally I'm leaning towards a day one rally scenario, but I mean

We'll see what happens uh when this thing actually goes public and how much the appetite is. Between now and the end of the year, it feels like even then a lot can happen. Uh things are, you know, moving pretty quick in the AI industry right now and and all around. Okay, the next thing I want to talk about is SpaceX's Terrafab commitment. They're gonna commit$55 billion to this. Texas AI chip plant.

And that could hit$119 billion if some of the laser phases get built out. So they could spend, you know, up to$119 billion. That is massive. This is all coming from a public hearing notice that was filed in Grimes County, Texas. And is tied to a request for tax breaks on the project. So this is a pretty good source. We're getting this kind of like public.

information. This is all part of a earlier announcement that Elon Musk made in March of this year when he announced that they were gonna target 200 gigawatts of quote unquote Earth compute and up to one terawatt of space compute. It's wild that we have to differentiate the two there. The reason why I think this is incredible is because SpaceX is a private and cash generating generating company. It makes a lot of its money from Starlink, but$55 billion up to$119 billion in spend on this Terafab.

is absolutely massive and that's on top of what they're already spending on their starship development. So they also kind of expanded their Memphis Colossus. uh expansion for X AI's separate kind of compute needs. And I know that they're they're doing some smart things financially. One in particular is that their first Colossus that they built for X AI

They actually just leased that out to Anthropic. So that data center in Memphis is going to be used there. And apparently they have kind of a 2.0 that they're using for their own stuff. They are trying to make some money off of it, but it is wild just how much money they're going to have to spend for this massive terraf ab.

All right, let's talk about Apple's camera equipped AirPods. This is what I'm super excited. You've heard me rant endlessly on the podcast about how far behind Apple is because they haven't created their own AI model. Now I'm going to say this might be a really incredible play out of them because Number one, we got the news that Apple's gonna let you pick if you want Siri on your phone. to be powered by Gemini, Claude, or Chat GPT. So you can actually pick the AI model.

I think that's a great idea. These models go up and down in you know how powerful they are or which one's the best. Being able to easily switch between them would be great. I'm curious if you're gonna have to log in with your premium account, right? So it's like you pay twenty dollars for ChatGPT, you want to get premium.

Uh you have to log into that account. I'll be curious to see how that goes. This is after Apple's already like kind of had these announcements about deals that they might do like exclusively with Gemini or whatever. And it feels like they might kind of just open source this to everyone to to let them use this. But With all of that, they're also creating new tools that are powered by this new Siri, which is yet to exist.

Spoiler, I mean, I don't know if this is a spoiler, but like I'll also throw a caveat that uh today Apple just got re uh requested to spend two hundred and fifty million dollars to pay back everyone that bought an iPhone 15 and 16 certain models in the US.

uh because they basically kind of plugged their Apple intelligence and said that there was gonna be all these really awesome AI features built in and none of them actually were there when they launched and they're like, Oh, we're just delaying it. So they got sued for fal false advertising. They got to pay ninety five dollars back to everyone that bought one of those phones.

So I'm probably gonna go get my ninety-five dollars. I don't know how I couldn't claim that ninety-five dollars, but I I better get paid my ninety-five dollars Apple. Um but So yeah, I I guess that's the the damper on it is we'll see if Apple ever ships anything AI. But assuming they're able to get their craft together and I mean if they're just plugging into one of the other AI models, that shouldn't be too hard.

They have these new headphones, um, these new AirPods that are gonna have a camera built into them, and you're gonna be able to talk to Siri through them, which is gonna be, of course, you know, running off of whatever LLM you want it to use. and you'll be able to get, you know, information. I think this is actually a really awesome hardware AI uh device. We've seen a lot of hardware AI devices flop, like the Humane Pin and the Rabbit R1.

Those, in my opinion, were kind of just novelty. If anyone bought them, it was for this novelty, but they weren't devices that were part of your day-to-day life, like a watch. Um and so I think any of these smart devices have to already be something that you use. You don't want to have to try to convince people to add a new device like a pendant. Apparently Apple's working on like an AI pendant. Personally, I don't think that that's going to be a success.

They're also working on smart glasses. I think that that will work. We're seeing that work with meta ray bands. So if it's already a device or like an item that people wear and you add AI into it or if you add, you know, tech into it, I think that's gonna work.

But if you try to make them wear a brand new necklace or something that's just not very normal, I don't think it's gonna work as good. So AirPods are awesome. I think these have a lot of really cool uh possibilities. Apparently they're gonna have low resolution cameras on them so it's gonna be able to see what you're seeing but it's not

high resolution. I imagine in the future it will be. So it's not like people are gonna be streaming or or like taking a lot of pictures with them, but they will be able to see what's around you. You'll be able to talk and ask it questions and it will have

a view of what's going on, which is really, really useful. Um and that's kind of what this the meta raybans uh initially got so popular for is they have the cameras on there that you can they can look at stuff, they can record things and they can you can talk to them and it can tell you about what's going on. So Excited for that. Who knows when it will come out? Um, but very good direction from Apple. I'm excited about that.

Okay, we gotta get into some of the drama with Elon Musk and Sam Altman lawsuit and everything going out. I I my favorite part about this is that we got discovery on the lawsuit, so they got a subpoena like all of the text messages and emails uh from everyone at open AI and we just get such a better, deeper look at all of the drama. Stuff that like I it's probably not flattering or exciting or happy for like

Sam Altman and everyone else involved, so they wouldn't really publish it otherwise. So for that I'm kind of happy about this whole lawsuit thing. But one of the funny things that came out of this, I mean funny, is uh Is a relative term, but Miriam Morati, the former CTO of OpenAI, she was put in as interim CEO when Sam Altman got kicked out in 2023.

And there is a chain of seventy-eight text messages between her and Sam Altman during that whole kind of ousting where he's trying to get back into the company and figure out how to fix things. and she's, you know, on the board, going to all the board meetings, talking to him about what's going on. Now And and you know, like why he got kicked out and all that kind of stuff. So we get way more insights into all of this from uh this kind of this text message.

Thread that's going on. Apparently, four OpenAI board members signed a document terminating Sam Altman, um, and then they named her as the interim CEO. Ilya Suscover had a fifty-two page memo that he gave to the board outlining why Sam Altman should be kicked out and that kind of got funneled back to Sam Altman through um Miriam Marathi. It's interesting too because Ilya Suscover obviously he left

left, started Super Safe Intelligence, Miriam Ratis, she left, started her own lab. It feels like everyone kind of left except for Greg Brockman. He's still around and apparently his stake in OpenAI is worth about thirty billion dollars today. So he seems to be doing quite well sticking around. I'm sure Miriam Murati and uh Ilya Seskover have, you know, their their equity in the company is probably worth a lot as well. But basically what we're seeing from the

Exchange of text messages between Mira Marathi and Sam Altman. A lot of them are Sam Altman saying, like, is there any way to fix this? Is there any way to recover? Who's on the call right now? Who are you talking to? Uh, Sam Altman kept trying to push to get Satya Nadella, the CEO of Microsoft, on the calls to try to quote unquote fix things. Basically, what happened is Miriam and a lot of the other board members.

uh had raised some secu uh you know, concerns. I mean, we've seen a lot of exposes about Sam Altman and he has some tendencies to not share everything with the board or not always be truthful with the board. And um from that it seems like she kind of raised those governance concerns, but then she was she became the CEO, which she didn't really want to be the CEO.

Um and then the board wasn't really able to defend its decision of kicking out Sam, so he came back. Microsoft the entire time was openly recruiting their staff in the midst of all of this. So and there was kind of this line between Sam Altman that's like uh, do they want everyone open AI to leave? What if, you know, Microsoft acquired open AI? Would that give them the governance that they wanted? And then, you know, uh, he knew that he was gonna be in charge of Microsoft AI, so then

uh, if they weren't able to acquire it. Anyways, he was gonna be like a competitor. There was like this whole thing and it seemed like a giant battle. At the end of the day, they brought back Sam and a lot of the people on the board left the board or um moved on and started their own companies. But we get the text messages, which is crazy. Okay. Let's talk about what Microsoft was saying when they were about to put a billion dollars into open AI, which

kicked off this entire AI funding boom that we're seeing today. Apparently, before they put the billion dollars in, they were worried that open AI was gonna quote storm off to Amazon. Um and go and join AWS. This is all coming out of, of course, discovery from the Sam Altman versus Elon Musk. Trial.

Basically we have Sam Altman who pitched Satya Nadella on about three hundred million dollar of million dollars of Azure compute. And that was in the summer of twenty twenty seven. And they you know, they're like, Hey, we just want this to fund OpenAI's next research phase and and train our m our model. Apparently the Azure chief Jason Xander told Nadella in August of 2017 that the deal needed$500 million or more in incremental revenue if it was going to even pencil out.

And then we have the CTO of Microsoft, Kevin Scott, who's warning Nadella in January of twenty eighteen, the next year. that OpenAI, you know, they're gonna go if we don't pay them enough money or give them enough credits, they're gonna go defect to Amazon and they're gonna kinda crap talk Azure on their way out. So they're like trying to manage the PR. They're like, hey look, we don't want them talking bad about us.

So I I think in all of these emails, nothing bad, like nothing illegal or wrong was done. They're talking about it in court, but it it seems like very normal due diligence for a big compute commitment from Microsoft's part. But the big takeaway for me that I think is interesting. is that this is completely contrary to this kind of public narrative that look Satya Nadella, he saw this big AI wave coming, Microsoft was so smart in funding.

um open AI because you know they knew what was kind of coming next. Like to some degree they saw that there was a lot of potential here. But also they were it feels like, hey, look, here's a big customer for our um for Microsoft for Azure.

And let's give them some money so they don't crap talk us and so they can stick around. Not so much like this thing's gonna be worth a trillion dollars one day, more just like, hey, like let's they're gonna spend a lot of money and we don't want it to be a bad PR thing. So a bit of a different narrative than we are used to hearing. If you like me use a ton of different AI models to help with your work, things like Anthropics Claude for I use it for coding and for getting good tech.

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