Big tech lost about a trillion dollars in market value after third-quarter earnings as capital expenditure rose sharply, with investors doubting that core ad and retail businesses will stay strong.
Google says the share of searches ending in AI Mode rose from 2% to 8.9%, and Ranjan Roy argues the core search business will never be what it was.
Anthropic's S-1 shows customers spending $100,000 or more rising from 1,500 to 11,900, and at a $2tn valuation, employee equity could be worth about $331bn.
Anthropic's S-1 Reveals Booming Business and Staggering Employee Wealth
Funding and deals
Anthropic. AI lab filed for IPO with $110bn in cash and $2.08 revenue per compute dollar, amid valuation talk of $1.5tn to $2tn.
News
Big Tech sheds nearly $900bn after earnings. The Financial Times reported the sell-off as hyperscaler capex almost doubled in the third quarter. Kantrowitz argues investors doubt core businesses like Google ads and Amazon retail more than the AI spending itself.
Google search ads miss as AI Mode grows. Search and other ad revenue grew 12% to $63.3bn against 15% expected, while AI Mode's share of searches rose from 2% to 8.9%. Roy says search remains giant but will never be what it was.
AI model price war slashes token prices. OpenAI's GPT-6 SOL and Luna halved prices in September, and Claude Opus 5.5 cut costs 40 to 60%. Roy says this undercuts the frontier-model differentiation story, and Kantrowitz says tokens are not growth Wall Street values.
Anthropic filing points to historic employee fortunes. Andrew Benson estimates a $2tn valuation gives the seven founders about $199bn and 5,300 employees $331bn in equity. Kantrowitz notes the irony given Anthropic's warnings that its technology could wipe out humanity.
Amazon falls despite fastest cloud growth in years. AWS revenue grew 39% to $46bn and total revenue rose 12% to $201.9bn, yet the stock fell after missing Wall Street expectations.
Reddit says Google crawls more, refers less. Steve Huffman says Google crawls Reddit as hard as ever but sends far less traffic. Roy calls the web's crawling-for-traffic bargain completely broken, and Kantrowitz thinks Google is training people to go straight to sites.
Meta projected to overtake Google in advertising. Steve Howe's chart has Meta leading ad revenue by 2028, with Amazon challenging Google for second. Roy credits Meta and Amazon's closed ad ecosystems over Google's open-web model.
AI's biggest spenders lag the S&P 500. Alphabet is down 11% and Meta 4.5% this year against a 10% gain for the S&P 500, with Nvidia also trailing. Roy says private markets remain enthusiastic even as public investors punish big spenders.
Amazon pushes Bee Frontier AI wristband. Amazon gives prime placement to the $74.99 wearable. Kantrowitz says he does not want a world where everything is recorded, while Roy sees a bet on Amazon's AI hardware ecosystem.
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