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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

#731

Post by theptip »

netcan wrote: post #534
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…

So yes, but that doesn't negate the circular investment aspect, for most intents and purposes. The risk is from this structure is mostly to do with how this affects market cap. Companies using the value of their shares to fund demand for their services. That's a risk.

Can you share more on this market cap risk? I see legit stability / correlation risks but can’t work out the market cap risk mechanics.

The cash was just sitting on their balance sheet not increasing Google’s valuation, turning it into revenue is value creation.

The equity transfer is a bit murkier, Google I guess gets to mark this on their books according to Anthropic’s latest valuation, but isn’t this more of a volatility swap than conjuring market cap? Analysts are not going to apply $30b of future spend at current PE, they will additionally discount this by the P(Anthropic demand crashes). So it’s not like this just boosts their market cap for free.

Of course Google’s balance sheet now has higher vol equity instead of cash for their products.

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

#732

Post by bandrami »

thawab wrote: post #630
bandrami wrote: post #627

If they're investing at the same valuation Anthropic had in their last round, what happened to all that previous money?

You might be miss remembering, the last round they raised 30b.

Yes, they raised $30b at valuation of $350b. And this round they're still valued at $350b. What happened to that $30b they raised?

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

#734

Post by auto »

aurareturn wrote: post #632
auto wrote: post #395

Earlier quoted context omitted.

I’ve been a copilot and ChatGPT subscriber for probably close to two years now, give or take a couple of months, and I had a trusted friend telling me for months to give Claude a try. It took about two weeks of really running it through its paces, and constantly slamming against the limit on it to convince me I had to upgrade to at least the 100/month sub, and at this point I wouldn’t blink to bump that to the 200/mo…

If it gets you so much value for $100/month and Anthropic still claims they have 50%+ gross margins, why do you think we are 100% in a bubble? Doesn’t make any sense.

Because I don’t believe 50% gross margins at face value, as being discussed in this thread I think the economics of all of these things are far more complex than that.

For what it’s worth, I haven’t staked my investment portfolio on there being a bubble, I’m just preparing for the worst and doing as much work as I can with Claude before a potential massive rug pull happens.

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

#735

Post by cottoneyejoe »

an0malous wrote: post #153
tiffanyh wrote: post #116

Earlier quoted context omitted.

That’s what’s needed when you go from $9B in ARR … to $30B in ARR literally just one quarter later . That kind of insane growth & demand is unprecedented at that scale. https://www.anthropic.com/news/google-broadcom-partnership-c...

What is all this AI doing? People are spending 10’s to 100’s of billions and no service or technology seems better or cheaper. Everything is more expensive and worse.

I work in a large infrastructure design consultancy. There are massive unmet needs for narrow-purpose automation in project delivery that are being developed by the users that need them for a few pennies at a time. Previously, getting any project of any size done by the in-house developers required 6-24 months of alignment-building with multiple levels of management in multiple business units. Getting anything done comes with an administrative price tag in the $10,000s. Those people spent all their time on a few outward-facing products and building dashboards for EVPs and C-level people, and the people doing real work our customers actually care about are banging rocks together and fingerpainting walls of their caves with excel and email based workflow.

Now there are pockets of people who are extremely productive, and maybe 80-90% of the rest who will never adapt. When I mean extremely, I mean people producing weeks of effort of marketing teams and hundreds of unbillable hours of senior-level professionals with only a few minutes of human involvement. Paid software extensions for (awful) design software we are required by clients to use can all be duplicated in house. Technical leadership is now aware of this, and our spend on software licenses is going to drop fast. I think every project in my own portfolio has some kind of custom automation supporting it, which was unthinkable 5 years ago.

It's going to take years for practical knowledge of how to use these systems to spread and even more for market discipline to expel those who cannot or will not learn. The Industrial Revolution took nearly a century, depending on how you're counting. LLMs have only been producing coherent output in the last 5 years. They've only been as good or better than people at some things you would have done on a computer for about a year or so. Be patient. These are massive changes.

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

#736

Post by camdenreslink »

dzhiurgis wrote: post #161
throwawaytea wrote: post #70

Earlier quoted context omitted.

There are countless examples, but let's say Ford. Worth $150 billion, $50 billion not counting debt. My neighbors just gave Ford $60k. It'll be a while until my neighbor gives Anthropic $60k.

At 20 year depreciation it’s $250 a month. Close to Anthropic’s $200 model. IMHO at this point a lot of developers would rather walk than code manually.

Are vehicles usually on a 20 year depreciation schedule?

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

#737

Post by eueew »

dominotw wrote: post #681
TeMPOraL wrote: post #519

Earlier quoted context omitted.

> My impression has always been it's more important the build the correct thing (what the customer needs/wants) rather than more stuff faster. The process of learning what the customer needs/wants is a heavily iterative one, often involving throwing prototypes at them or betting at a solution, then course-correcting based on their reaction. Similarly, the process of building the correct thing is almost always an iter…

no customers will accept "throwing prototypes at them". my time is not for QA-ing your product. why do you think restaurants rarely change their menus.

Is it just me or is this whole mania exposing those people who thought they were great ‘thinkers’? The takes I see are so utterly flawed it’s ironic - people refer to llm’s as hallucinating when the real halluncinations are from people cosplaying the role of management/investors when they have never done said role professionally in their life.

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

#738

Post by Saline9515 »

mattmanser wrote: post #637
fauigerzigerk wrote: post #617

Earlier quoted context omitted.

>(a) it's ability/desire to make such investments is still driven by stock-driven optimism I don't think it has much to do with the stock price at all. Current platform oligopolists fear the rise of new platforms. They want a foot in the door for strategic reasons. What could happen is that frontier labs like Anthropic and OpenAI never become platforms and turn out to be providers of a largely commoditised, low margi…

But OpenAI/Anthropic are not selling the compute as they're buying that from Google/Amazon/etc. So they're selling the transformation, or the model. Or the ability to make a model. And their brand and their harness. And it seems like the model is definitely not worth 380 billion. Models depreciate incredibly fast. There are lots of models and the other models aren't that far behind. And it seems like the harness is n…

Moonshot (Kimi) and Deepseek trained their model on chinese GPU, with little capital, and are raising now at around 20b$ valuations.

Their latest models are arguably comparable to frontier ones. It is obvious that the valuations of the US companies are totally surreal now.

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

#739

Post by eueew »

camdenreslink wrote: post #728
mewpmewp2 wrote: post #571

Earlier quoted context omitted.

This with the ability to research, iterate on prototypes, in my opinion allows to determine the right thing quicker as well. Of course right now the value is largely intuition based, there may be some immediate revenue/profit, but revenue/profit will take time to follow, so in a way it is a speculative intuition based bet. Financial gains will take time to follow, so for a period of time it will be "trust me bro" for…

I question the premise that faster iteration on prototypes leads to better revenue or business outcomes.

Agreed it’s far more complex than that.

But people who have only wrote software their entire life wouldn’t know that would they?

It’s like the econ prof’s who theorise about the theory of the firm but have never done it themselves.

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