00:15:15 · Kirsten Korosec
[00:15:15] S1: Yeah. I was gonna say the the risk factors section, which I do wanna talk about in in a sec, to me was, you you know, maybe not a bomb. I guess I should have expected it, but it was unusually long. To your point earlier, we're still waiting on a a couple more details, but I do wanna note that they don't just have customers. Their revenue is insane. I mean, 16,300,000,000 in the first six months of the year, that's versus 1,200,000,000 the same period, same six month period the year before. Those losses, though, to your point of paying for compute and other things, obviously, are stacked up 80,000,000,000, I believe, in the first half of the year. So to me, they have a real business case. We wrote about this a little bit, which is that they're really trying to put their hooks into the enterprise customer, which seems to be a very important, you know, revenue driver for them. And now it's like, can they start closing that loss? Because shareholders aren't gonna accept that forever. Right now, they're fine with it. Right? We're talking about a company that's probably gonna be valued at a trillion dollars. They're okay with it. But, eventually, you gotta close that gap.
00:16:29 · Anthony Ha
[00:16:29] S0: Yeah. Although there's a very surprising kind of nuance to the loss discussion as well, which is that, I think, 80,000,000,000 is the net loss for the first half of the year, but the net... The operating loss is 693,000,000. So, I mean, you know, orders of magnitude different. And as I understand that... So they're... Like, most of that loss is really reflective of kind of all this debt and commitments that they're carrying. And so in theory, that if they need to sort of get to profitability quickly, they can. But, like, you know, that debt doesn't just disappear. Right? People are gonna get... Wanna get paid for whatever it is Anthropic has committed to paying for. Every company today is looking for an edge. Better insights, decisions, greater resilience. But as AI drives new growth, it also creates new demands on energy and infrastructure. Schneider Electric is connecting energy, automation, and digital technologies to help organizations make smarter decisions and operate more efficient. Because the future won't be shaped by AI alone. It will be shaped by energy and industrial intelligence. Schneider Electric, advancing energy tech.
00:17:38 · Sean O’Kane
[00:17:38] S3: Yeah. And, you know, I'll say, I think one of the big things that I took away from this is that while they're in position to do basically what you just said of, like, move into the world of profitability and and create a business that's sustainable, I don't think it's sustainable in the sense that we normally think about when we think about about a company that is trying to make a... An entire business out of something. It's like their big problem is they need to keep investing in all of these... It's really expensive things that make the technology possible, like renting out GPUs and renting renting out data center space. And they're... You know, if you read kind of... Not even necessarily between the lines, but you read this as one, the thing that stands out is they're basically saying, we need to keep growing in able to... Like, they cannot just, like, sort of, like, you know, coast at this point. They need to keep growing because they need more money to keep investing, to keep improving the product, to keep... You know, it's just... It's this perpetual motion machine until it isn't if something breaks bad. So there's a lot to consider, I think, for people who are looking at this as a public investment. Anthropic's pitch on that is sort of like, we're gonna be able to do all these incredible things with biotech, with research, with science. And so, you know, they kinda frame it in the s one, certainly in the letter from the cofounders up top, that like, you know, think of this almost less as like an investment in a company where you're gonna get dividends or something, and and more like being a part of this sort of potential revolution in how we live our lives, which, you know, that's up to everybody to decide how much they wanna buy into that if they're really gonna invest in this company as a public company.
00:19:13 · Kirsten Korosec
[00:19:13] S1: Well, speaking of buying, one of the ways that the company is growing is through acquisitions. And I spent a little bit of time going through the s one. We've reported on some of these. Coefficient Bio was one. We don't exactly know, I think, with the acquisition prices. There's some questions on valuation on that one. But if you look through the s one, they've made... I calculated about, excluding Coefficient Bio, something like $737,000,000 worth of acquisitions. About 260 of... Million of those, they don't disclose, but then there's been some reporting over the past six months or so of revealing some of these some of these companies. And there's some really remarkable ones in there. There is a, not disclosed in the s one, but a one person biotech company that Anthropic bought. So to me, that's very interesting. There's the classic growth story, but they are still doing acquisitions, and they seem to be focusing on very specific slices of how AI tools could be used. So biotech is one of those. And I think we're gonna see more of that activity certainly over the next year or so. So I can't wait to see what they're what they're gonna buy next. I'm sure there's a lot of founders out there who are hoping it's them.
00:20:35 · Anthony Ha, Kirsten Korosec
[00:20:35] S0: Yeah. I mean, it it speaks to, I think, probably one of the the balance that they're they're probably continually trying to have to strike that we've already alluded to, which is essentially, you know, that the part of the reason that they are doing relatively well right now is is that they've been, again, relatively speaking, focused you know, some core use cases, enterprise customers, building a real business as opposed to just, like, trying to apply LLMs to everything possible. But at the same time, they need to grow. Right? And and so that they're going... I imagine that there's probably a lot of push and pull of, like, we need to, like, move into new areas like biotech, but we have to also be somewhat strategic about it. But, you know, one of the things we also touched on earlier was risk factors. So I'm curious if anyone has a favorite or favorites of the risk factors that are worth highlighting here. [00:21:25] S1: I have a couple, but I will reserve time for Sean as well because I know he has some as well. One, that models could be so resistant to being shut down that they may use [00:21:36] S0: blackmail. That's happened in testing.
00:21:36 · Anthony Ha, Kirsten Korosec
[00:21:36] S0: blackmail. That's happened in testing. [00:21:38] S1: Yeah. Also, that, its AI tech could create liabilities. That's not very exciting. But the caveat is is that it would be too large, not just for its own insurance coverage, but for the entire insurance industry to cover, which seems like a problem if that were to happen. And then finally, very quickly, there is an interesting one that I'm not gonna get too deep into because we don't have enough time, but basically how the corporate structure is set up in a way and how it matches up with how the cofounders have sort of dedicated 80% of their personal equity to, philanthropic causes. And the end result of this is that these founders may end up with more, like, great voting control and maintaining that, but less economic power. So that is kind of an interesting risk factor that... I don't know. I don't think we're gonna see it play out for a long time, but but that is one I'll be definitely paying attention to.