> Google is committing $10 billion now in cash at a $350 billion valuation and will invest a further $30 billion if Anthropic meets performance targets, the report said.
How much of this goes back to Google as cloud spend?
Hopefully this money means more compute infrastructure to help Anthropic counter the efficiency changes that have created this perceived downtrend in claude quality.
At this point if you have cash or compute credits laying around in the tens of billions, better to hedge your bets than to find out the winner that took all was not you.
It’s pretty wild how badly Altman siding with Hegseth has backfired. (And how competently Dario has played his hand.)
I don’t think that’s the ultimate cause of the turnaround in fortunes. But it strikes me, at least from the investor and potentially urban-consumer perspectives, as a pivotal moment in both companies’ fortunes.
"The Alphabet subsidiary is committing to invest $10 billion now, at a $350 billion valuation for Anthropic, with another $30 billion to follow if Anthropic hits certain performance targets, according to Anthropic."
this is insane. on the secondary market the valuation is 2-3x that. what gives?
It was more complicated than that. Microsoft was only kind of a competitor to Apple. Apple was also a platform for them. They shipped software that was popular on the Mac (mainly Word).
Especially in those days Microsoft was both a platform for software to run on, and a maker of software, and being flexible to emphasize one or the other aspect depending on the way the market is... has been good for them.
If you added up all the major AI valuations, it's apparently worth more than products Americans constantly buy and rely on for their main life. So either AI is going to be involved in every Americans life to a large degree, and paying real money for, or these valuations are insanely wrong.
The consumer goods companies can generate a lot of value for customers and also be terrible investments that consequently don't have high market caps. Indeed, that's the expected end state of a relatively stable competitive market - razor-thin profit margins with consumers getting almost all of the surplus.
Anthropic, meanwhile, is spending hundreds of millions buying customer commitments from PE firms to inflate that DAU number. They now have a larger war chest to spend on artificial user acquisition to further inflate that value for future funding rounds.
I think the subtext of the last few weeks is the Anthropic was becoming severely capacity constrained (or approaching that). They seem to have had to sign two somewhat adverse contracts with Amazon and Google in short succession. suddenly model quality is back up again.
It feels like the market is full Wiley Coyote on frontier model makers, and I like Anthropic's B2B business model.
But all progress points to a commodification of foundation models--Google first named it as "we have no moat, neither does anyone else." So there must be some secondary play driving this, right? Hardware sales? Hedging for search ad revenue?
Still feels mispriced. I think asset inflation leaves too much money desperate for the Next Big Thing.
10B at their valuation from last November is an absolutely killer deal. If Anthropic had sufficient compute supply they could raise at 2x easily if not 3x.
Cool. Will they use their balance sheets to pour all of this cash or are they going to bring the banking system to its knees and then we bail out everyone again ?
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[ 274 ms ] story [ 667 ms ] threadHow much of this goes back to Google as cloud spend?
Didn't Amazon AWS do the same recently?
I don’t know what to make of it
I don’t think that’s the ultimate cause of the turnaround in fortunes. But it strikes me, at least from the investor and potentially urban-consumer perspectives, as a pivotal moment in both companies’ fortunes.
this is insane. on the secondary market the valuation is 2-3x that. what gives?
Especially in those days Microsoft was both a platform for software to run on, and a maker of software, and being flexible to emphasize one or the other aspect depending on the way the market is... has been good for them.
But all progress points to a commodification of foundation models--Google first named it as "we have no moat, neither does anyone else." So there must be some secondary play driving this, right? Hardware sales? Hedging for search ad revenue?
Still feels mispriced. I think asset inflation leaves too much money desperate for the Next Big Thing.
if it runs of out of cash - then it's bad for the whole industry.
same as OpenAI. so all players - will provide cash & compute to keep them going.
And it may very well be bad news for OpenAI.