Big Technology Podcast
00:41:43 · Ranjan Roy, Alex Kantrowitz
[00:41:43] S1: No. No. That that that... That's exactly what I'm saying. It's actually, like, insanely efficient. It's so... Feel... For everything we've talked about for the last two years, suddenly you look at this and you're like, wait. This is the most cash efficient, compute efficient thing imaginable. Like, the the number that they've only burned $9,500,000,000 in this entire last few years is actually... Like, we know it's not exactly correct because they receive below market rates as part of these investments, but we don't know how much less. And we know they're not going to continue. [00:42:22] S0: Let me press you on this. Google said it was gonna invest up to 40,000,000,000 in Anthropic. We don't know if they've invested all 40,000,000,000. Amazon said they agreed to invest 25,000,000,000. So let's say that was all Amazon and Google giving Anthropic compute for free. You know, that's just $65,000,000,000. They have a 100 plus billion in the bank. [00:42:46] S1: No. No. But but they spent 5,500,000,000 in compute last quarter, 3,500,000,000 in q one, 8,000,000,000 total in the first half of the year. So like if they're investing, if Google and Amazon are discounting by in that order of magnitude of billions, that fundamentally changes the margins of what Anthropic's business is. So the cash on hand I think is separate. This is what should they have paid and what would their actual expenses ratios look like relative to what they are able to charge.
00:42:46 · Ranjan Roy, Alex Kantrowitz
[00:42:46] S1: No. No. But but they spent 5,500,000,000 in compute last quarter, 3,500,000,000 in q one, 8,000,000,000 total in the first half of the year. So like if they're investing, if Google and Amazon are discounting by in that order of magnitude of billions, that fundamentally changes the margins of what Anthropic's business is. So the cash on hand I think is separate. This is what should they have paid and what would their actual expenses ratios look like relative to what they are able to charge. [00:43:19] S0: So your suggestion is that Amazon and Google both invested in the company and not dollar for dollar, but just said, we want you to grow. And so outside of our investment, we're also going to provide you with discounted compute. [00:43:31] S1: Amazon, that was explicit in their convertible note. They said it. And we talked about this way back. And it was kind of a joke. Like we're like... And back then I remember we were like, is it cash or is it credits? Is it like... But now you're actually seeing the result of that is we still don't know of what is Amazon business going to look like going forward. And I think to me that's the only... Otherwise, everything looks so good. It's almost like unbelievable. And that's why to me, they should disclose around here is actually like our average... What this discounting looked like in the past so people can understand what it will look like in the future.
00:43:31 · Ranjan Roy, Alex Kantrowitz
[00:43:31] S1: Amazon, that was explicit in their convertible note. They said it. And we talked about this way back. And it was kind of a joke. Like we're like... And back then I remember we were like, is it cash or is it credits? Is it like... But now you're actually seeing the result of that is we still don't know of what is Amazon business going to look like going forward. And I think to me that's the only... Otherwise, everything looks so good. It's almost like unbelievable. And that's why to me, they should disclose around here is actually like our average... What this discounting looked like in the past so people can understand what it will look like in the future. [00:44:14] S0: I know it would be like kind of criminal to do this, I guess. I I don't know if we've seen weirder things, but is there a chance that Amazon is giving Anthropic this discounted compute, booking it as full revenue, and that's why you see the 39% growth? Is that like a totally out to lunch conspiracy theory? Probably.
00:44:14 · Alex Kantrowitz, Ranjan Roy
[00:44:14] S0: I know it would be like kind of criminal to do this, I guess. I I don't know if we've seen weirder things, but is there a chance that Amazon is giving Anthropic this discounted compute, booking it as full revenue, and that's why you see the 39% growth? Is that like a totally out to lunch conspiracy theory? Probably. [00:44:32] S1: I I mean, actually, I I don't know. Like, I'm sure could have... I feel that that would probably be pretty aggressive on the accounting side. I think... I I wouldn't worry about that as much. Again, to me, this is not... Like, the numbers were great. It's it's... But to invest and at what rich valuation are you investing? That's the question. I think they have not given enough information. Also, I have to say whoever is planning those revenue leaks is a communications genius because again, there was no surprises in them. Everything was out there. When we get 16 to 17,000,000,000 for q q three revenue, it's already out there. And we know growth is decelerating and all that's out there. So there'll be a little hubbub, but like they're they're leaking financials, like, in a pretty incredible way.
00:45:26 · Alex Kantrowitz
[00:45:26] S0: Yeah. Somebody on X named Andrew Benson started putting together the list of Who Gets Rich, a philanthropic list at 2,000,000,000,000. I think the talk is a list at 1.5. But if you assume $2,000,000,000,000 it's $199,000,000,000 I guess this is the equity breakdown to the seven controlling founders. Then there's $28,000,000,000 for Ben Mann, so I guess they would all get who's another founder who I guess is sometimes a founder, sometimes not so they'd all get 28,000,000,100 billion dollars to the Anthropic Public Benefit Fund, $331,000,000,000 in employee options and RSUs. That covers 5,300 employees, an average of $62,000,000 each. But he continues when you joined really matters. And again, this is back of the envelope math. I think it's directionally accurate, but of course there could be some problems with it. But if you joined in 2023, you're looking at 110,000,000 to 400,000,000 each. If you joined in 2024, he says, which is like four forty to six forty people hired, 200,000,000 to 300,000,000 each. 2025, at least 70,000,000. 2026, 10,000,000 to 20,000,000. Imagine you got hired this year, you're already looking at 10 to $20,000,000 in compensation. You wonder why people don't leave Anthropic. Of course, part of it is the mission, but this is also a pretty good argument, don't you think?
00:46:50 · Ranjan Roy, Alex Kantrowitz
[00:46:50] S1: I... I'll admit, I I can't even stomach hearing these numbers working in the eye industry for a company that's doing well, and I'm happy. But, like, my god. The wealth creation is... It's actually... What's more surprising to me is what you just read. I'm actually more surprised that... And we got elections on Tuesday. I'm surprised that has not become, like, one of the biggest headlines in, like, every if you're a politician out there, you got your talking points right now. I mean, the numbers are insane. [00:47:27] S0: Listen to this. Anthropic... By the way, this is also coming from the company whose CEO said that half of white collar jobs will be Yes. Automated. Just play the two clips. That's it. This is from Anthropic will make 1,000 employees worth $100,000,000 at least $100,000,000 at a $2,000,000,000,000 market cap. There are 11,000 Americans worth with $100,000,000 in investable assets. So something like one in 12 Americans with $100,000,000 liquid will be from Anthropic, and if you add in OpenAI, it could be one in seven. [00:48:00] S1: It is shocking. Again, when I saw those, literally am like, I am speechless. [00:48:08] S0: I have two reactions to it. I mean, of course, they've earned it. They've built to a degree, right? They've built this technology that is going to be has a good chance to be world changing, put it that way. But the other side is like, they're also telling you that it might kill you, and they're going protect you. And it's like, really? [00:48:27] S1: Well then