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Google plans to invest up to $40B in Anthropic

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Re: Google plans to invest up to $40B in Anthropic

#431

Post by lukan »

fc417fc802 wrote: post #353
skybrian wrote: post #276

Context: a few weeks ago, Anthropic signed a deal to buy "multiple gigawatts of next-generation TPU capacity" from Google and Broadcom [1]. There have been several previous deals, too. Some people call this sort of thing a "circular deal", but perhaps a better way to think of it is as a very large-scale version of vendor financing? The simple version of vendor financing is when a vendor gives a retailer time to pay f…

In another context I might see it as vendor financing. However given that Google and Anthropic are competitors in this segment and given that Google has previously invested in them I'd rather see this as a sort of bartered stock purchase presumably for the purpose of hedging against failure. If Anthropic wins the race and it turns out to be winner takes all and you happen to own half of Anthropic then you still win h…

How can there be a "winner takes it all" situation with AI?

OpenAI lead the game while they were best. Antrophic followed and got better. Now openAI is catching up again and also google with gemini(?) ... and the open weight models are 2 years behind.

Any win here seems only temporary. Even if a new breakthrough to a strong AI happen somehow.

Re: Google plans to invest up to $40B in Anthropic

#432

Post by keeda »

JumpCrisscross wrote: post #14

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.

Actually I have the opposite take. This is largely a play to procure compute capacity (and I suspect, distribution via Google Cloud), and I think Dario wildly underestimated the amount of demand they would see.

I always wondered why Anthropic was not out there feverishly scrambling to procure compute like the other big players. While Altman was being laughed at as a "podcasting bro asking for trillions in investment" Dario was on Dwarkesh expounding on how tricky it is to predict the demand for capacity. Now Dario has to give equity to a competitor to get compute. (OpenAI does this too, of course, but I suspect the terms are much better.)

At this point, it's pretty clear that compute is the only moat in this business. Even as an outsider, the extreme demand curves and compute crunch were painfully obvious, so this seems like a serious strategic error on Dario's part.

Re: Google plans to invest up to $40B in Anthropic

#433

Post by stingraycharles »

nilkn wrote: post #130
senordevnyc wrote: post #125

Earlier quoted context omitted.

For all we know they could have a revenue of $100 and claim a run-rate revenue of $30B. Can you explain how that’d work? What would the $30B figure be based on if they only have $100 in revenue?

They're pointing out that run-rate revenue is based on essentially sampling revenue over some limited time interval, then extrapolating from there assuming revenue always occurs at the same rate (or greater) over all similar intervals in the future. More specifically, they're pointing out that estimates of ARR derived from this kind of sampling are fundamentally prone to error and can be arbitrarily inflated based on…

Of course, but the fact of the matter is that the same technique was used for the quarter prior to that, and there’s a 3x increase quarter over quarter.

Re: Google plans to invest up to $40B in Anthropic

#434

Post by morserer »

dieortin wrote: post #300
hmaxwell wrote: post #179

Earlier quoted context omitted.

I'm wondering whether the layoffs are partly targeting people who haven't adapted to using AI tools, particularly those who are openly dismissive of AI-assisted work.

That’s like firing someone because he uses vim instead of VSCode. Who cares about the tools someone uses if he still does his job well?

Because the job itself has now changed, and they haven't. Their output speed might have been eclipsed by that of the engineers who efficiently adopted the new tooling.

Where I work, the power dynamics have shifted wildly. There are a number of senior engineers who refuse to touch the stuff, and as a result, they can barely keep up with their peers. Some of our juniors are now running laps around them.

When a stranger to your craft can now teach themselves what you know, how to do your job, and even how to automate your tasks in the span of the same workday as you, all while reliably being able to gauge the innacuracy of the output they're reading, how much longer do you really hold relevance?

Re: Google plans to invest up to $40B in Anthropic

#435

Post by Denzel »

qingcharles wrote: post #390
Jach wrote: post #336

Earlier quoted context omitted.

Are you able to describe any of those internal tools in more detail? How important are they on average? (For example, at a prior job I spent a bit of time creating a slackbot command "/wtf acronym" which would query our company's giant glossary of acronyms and return the definition. It wasn't very popular (read: not very useful/important) but it saved myself some time at least looking things up (saving more time than…

The ones I can mention.. one that watches a specific web site until an offer that is listed expires and then clicks renew (happens about once a day, but there is no automated way in the system to do it and having the app do it saves it being unlisted for hours and saves someone logging in to do it). Several that download specific combinations of documents from several different portals, where the user would just suck…

None of these projects sound like weeks worth of scope w/o AI.

Re: Google plans to invest up to $40B in Anthropic

#437

Post by teaearlgraycold »

lukan wrote: post #431
fc417fc802 wrote: post #353

Earlier quoted context omitted.

In another context I might see it as vendor financing. However given that Google and Anthropic are competitors in this segment and given that Google has previously invested in them I'd rather see this as a sort of bartered stock purchase presumably for the purpose of hedging against failure. If Anthropic wins the race and it turns out to be winner takes all and you happen to own half of Anthropic then you still win h…

How can there be a "winner takes it all" situation with AI? OpenAI lead the game while they were best. Antrophic followed and got better. Now openAI is catching up again and also google with gemini(?) ... and the open weight models are 2 years behind. Any win here seems only temporary. Even if a new breakthrough to a strong AI happen somehow.

Not even 2 years behind.

Re: Google plans to invest up to $40B in Anthropic

#438

Post by briansm »

kranke155 wrote: post #221
msy wrote: post #185

Earlier quoted context omitted.

We suddenly have a proliferation of new internal tools and resources, nearly all of which are barely functional and largely useless with no discernible impact on the overall business trajectory but sure do seem to help come promo time. Barely an hour goes by without a new 4-page document about something that that everyone is apparently ment to read, digest and respond to, despite its 'author' having done none of thos…

Without good management AI is just a new way to make terrible work in unprecedented quantities. With good management you will get great work faster. The distinguishing feature between organisations competing in the AI era is process. AI can automate a lot of the work but the human side owns process. If it’s no good everything collapses. Functional companies become hyper functional while dysfunctional companies will c…

[flagged]

Re: Google plans to invest up to $40B in Anthropic

#439

Post by conradkay »

lukan wrote: post #431
fc417fc802 wrote: post #353

Earlier quoted context omitted.

In another context I might see it as vendor financing. However given that Google and Anthropic are competitors in this segment and given that Google has previously invested in them I'd rather see this as a sort of bartered stock purchase presumably for the purpose of hedging against failure. If Anthropic wins the race and it turns out to be winner takes all and you happen to own half of Anthropic then you still win h…

How can there be a "winner takes it all" situation with AI? OpenAI lead the game while they were best. Antrophic followed and got better. Now openAI is catching up again and also google with gemini(?) ... and the open weight models are 2 years behind. Any win here seems only temporary. Even if a new breakthrough to a strong AI happen somehow.

Recursive self-improvement is one argument. Otherwise winner takes all seems much less likely than a OpenAI/Anthropic duopoly. For the best models, obviously other providers will have plenty of uses, but even looking at the revenue right now it's pretty concentrated at the top.

So if I'm Google I'd want a decent chunk of at least one of them.

Re: Google plans to invest up to $40B in Anthropic

#440

Post by stingraycharles »

zmmmmm wrote: post #206

It feels like Anthropic is everybody's insurance policy against someone else winning the AI race. So you have Amazon, Google, Microsoft basically every major tech company pushing their own tech hard but simultaneously ensuring they have a survival level stake in Anthropic if they can't build or acquire their way to stay at frontier level performance themselves.

I find it interesting that Anthropic is in this position and not OpenAI. Where did OpenAI go wrong? Lack of focus and overambitious in some of their spending commitments?
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