Big Technology Podcast
00:29:42 · Ranjan Roy, Alex Kantrowitz
[00:29:42] S1: Get up there. Well, hold on. Do you think we're gonna have to rethink societal norms around? Like, I agree. If I sit down and someone... I at least would... I appreciate the fact that the Bee Frontier is hopefully visible, so you know what's going on. But I feel like, do you have to sit down and be like, are we recording? Kinda like if you're on like a Zoom call or something like that. [00:30:06] S0: I mean, isn't it clear that the Bee Frontier, which is this bracelet that sits along your wrist, is just not going be the final form factor? It's going to be an impossible to detect microphone that you hide under your shirt. And so we're not going to know who's recording and who is. This is why I just don't want this stuff to take off, and I do think there should be some stigma around showing up to dinner with your muse buddy or one of these things. Who wants to live in a world like that? [00:30:31] S1: I mean, is true. As someone who loves my Meta Ray Bans be take photos and video and do it in a responsible manner, it is interesting that... I mean, the stigma around that certainly took off and Meta actually removed the photo capabilities and a lot models. Society has a shot. We got a shot.
00:30:31 · Ranjan Roy, Alex Kantrowitz
[00:30:31] S1: I mean, is true. As someone who loves my Meta Ray Bans be take photos and video and do it in a responsible manner, it is interesting that... I mean, the stigma around that certainly took off and Meta actually removed the photo capabilities and a lot models. Society has a shot. We got a shot. [00:30:55] S0: Do we? I hope so. All right, let's just like summarize, not summarize but I want to see if we can kind of get to sort of a conclusion here on this one because if you look at the S and P 500, it's up 10% on the year. On the year, Alphabet is down 11%. It was up slightly when I was in with Sundar and now it's down 11% on the year. Meta is down 4.5 on the year. Amazon is up 5.5% on the year, trailing the S and P 500. Microsoft is up 10% on the year, and it hasn't really been praised at all for its AI initiatives. When you look at it all together and we won't even throw a coreweave into the Yeah. Dive because but NVIDIA is also trailing the S and P 500 is the market in 2026 telling us that the companies making the biggest bets on AI are simply too risk hungry to bet on. Is it saying, we don't want that. We don't believe in it.
00:32:02 · Ranjan Roy
[00:32:02] S1: So that's why I think the connection to how will Anthropic's IPO perform is so fascinating because I agree. The market has effectively told big technology companies that listen, you guys are going free cash flow negative. You're investing this much. Good luck, but we're gonna invest in the Cheesecake Factory in Chili's whose stocks are up above the overall kind of composite of big tech companies. So so I think in the public market companies, it's become clear. But also these are gigantically valued market cap companies anyways. So it's just saying, well, maybe things will just temper off a little bit. But is... In the private markets, it has not slowed down. We are still seeing again, Anthropic and we'll get into the numbers, but talks of a trillion and 0.5 or 2,000,000,000,000 are still very, very optimistic things that I think we still see that divergence.
00:33:07 · Alex Kantrowitz
[00:33:07] S0: Yep. Okay, we should take a break. And when we come back, talk a little bit about that IPO because we did promise a S1 emergency episode. We got that with Dan Primack on Monday, but we want to hear Ranjan's thoughts as well. And we're going to talk, of course, about the business, but also about how much money the people within Anthropic stand to make because they're gonna be very rich very soon. Alright. We'll do that when we come back right after this. This episode is brought to you by AvePoint. Everyone's racing to roll out AI right now. Copilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data, and most teams have no single way to see it, secure it, and prove it's under control. That's exactly what AvePoint does. For twenty five years, they've been the trusted layer beneath the world's most demanding data. Now extended across your entire AI estate. Your data, your cloud, and the agents acting on your behalf. It's how more than 28,000 organizations deploy AI with confidence. So innovation scales without scaling risk. AvePoint, the unifying trust layer for AI. Head to avpoint.com to see how enterprises deploy AI with confidence. Learn more at avpt.co/bigtechnologypodcast. That's avpt.co/bigtechnologypodcast. I know planning for the future isn't always the most exciting thing to think about, but it's one of those things that can really matter in the long run. I'm always a fan of anything that makes planning for the future a little easier. Ethos is a great resource for exploring life insurance options without making the process more complicated than it needs to be. Ethos makes the process fast and easy, and it's a 100% online. You can get a quote in seconds, apply in minutes, and even get same day coverage. There's no medical exam, you just answer a few health questions online. You can get up to $3,000,000 in coverage with some policies as low as $30 a month. And if life insurance is something you've been putting off, Ethos makes it easier to finally check it off your to do list. Take ten minutes to get covered today with life insurance through Ethos. Get your free quote at ethos.com/bigtech. That is ethos.com/bigtech. Application times may vary. Rates may vary. And we're back here on Big Technology Podcast Friday edition. It's Anthropic s one week. Ranjan, it's interesting.
00:35:43 · Alex Kantrowitz
We're we're about five days past. I don't think we'll spend too much time on the s one this week. But it was really a Rorschach test, I think, for people in terms of if you believed in Anthropic, found plenty of evidence to show you that the company was very healthy. Booming growth they went from 1,500 customers in December 2025, spending $100,000 or more to $11,900 in June. So that's massive increase. They also increased their customers spending 1,000,000 or more. They had something like $110,000,000,000 cash on hand. So if you thought Anthropic was just going to incinerate all its money and desperately crawl to the IPO, Obviously that's not what happened. They're making $6,600,000 per employee, so they're very efficient. Their efficiency was going up. They used to make $0.40 for every dollar of compute they spent. In the S1, they showed that they are now making $2.08 for every dollar of compute they spent, so they completely flipped that on its head. But the detractors will point to two things: the fact that Q3 revenue was not included in the S1 and Q3 revenue looks like it will massively decelerate from something like more than 100% quarterly revenue growth to in the 40% quarterly revenue growth field, and of course that spells the end of tokenomics. Then there's also the 500,000,000,000 or so that they've committed to spend, much of which is non cancelable. When you looked at this blot of ink on the paper, what did you see?
00:37:19 · Ranjan Roy
[00:37:19] S1: What I saw was a business that is doing very well, and I think, like, actually met a lot of the height... Heightened expectations. What I didn't see in the most frustrating part of this to me, all I want is to understand the unit economics of Anthropic's business to give a reflection of what a great AI business can look like. And I did not get that. And I'll I'll tell you why. So I actually don't think the q three numbers, again, a lot of people are... There's like a lot of conspiracy theory ing going on, I feel, around, like... It actually makes sense. Like, audited financials, it would have... Quarter would have ended, September 30. So there's... They're going to release it based on... I think it's November 11. If they don't IPO before then, which they likely won't, they're going to have to release q three. So we'll get those numbers. We'll we'll see what... To me, the numbers actually were so good that that actually raised questions for me. And what I I mean by that is, again, I mean, you kinda started to say it, but like, the whole story has been that like cost of compute is gonna be so dramatic, and that's why we need to just raise so much money. And that's why we need, like, the the the... It's a very expensive thing, and that's why this is all gonna be very expensive. They lowered their cost... Compute as a percentage of revenue, and q one was 71.6% to 48.1%. It was 225% of revenue a year and a half ago. So, like, all these numbers show us that actually the economics are almost magical. Like compute is decreasing, revenue is increasing, compute as a percentage of revenue is decreasing. To me, I don't think we yet understand what the actual true cost of compute was relative to their revenue. And the reason being the most glaring example was like, there's all this talk around the $80,000,000,000 loss, is it real as an accounting treatment? Within that, the big part of that was, it was the increase in value of convertible notes from Amazon and Google. But we talked about this a year and a half or two years ago, actual calendar year and a half, two years ago, not Alex's six months is a year framework.