Google will invest as much as $40 billion in Anthropic
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I mean, at least they're handing over $10 billion in cash immediately rather than billions in IOU nevers. That's an improvement.
But it would be really nice if someone could build a sustainable business out of AI instead of relying on big investors burning billions.
But it would be really nice if someone could build a sustainable business out of AI instead of relying on big investors burning billions.
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Meanwhile:
https://www.flyingpenguin.com/alisa-esage-throws-mythos-under-zero-day-bus/
Now, this isn’t my area of expertise so please feel free to jump in with additional context anyone…
…but it seems to me that the stink of circle investment has spiraled to near Madoff levels of grift.
(For those who need the reference:
https://www.britannica.com/biography/Bernie-Madoff )
https://www.flyingpenguin.com/alisa-esage-throws-mythos-under-zero-day-bus/
Now, this isn’t my area of expertise so please feel free to jump in with additional context anyone…
…but it seems to me that the stink of circle investment has spiraled to near Madoff levels of grift.
(For those who need the reference:
https://www.britannica.com/biography/Bernie-Madoff )
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So much demand that none of them can profit from their AI models. Crazy demand, guys.
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Actually...the headlines are they "plan to invest".
Which reads the same as OpenAI's famous $100bn concept-of-a-plan with Nvidia...that got cancelled--but Altman insists it totally didn't get "cancelled" because it was just marketing and not a business contract.
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Same as the RAM we can't get anymore, right? Believe it when the contracts have actually hit the public companies' filings, I guess.
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The same reason Altman comes out every week or so blabbing about: UBI, and 3 day work weeks, and no-taxes because AI agents will pay them instead, as being The Future and He Says So Now. "AI WILL MAKE THINGS WONDERFUL!" (just let me do whatever I want with no regulation or oversight).
It is about market manipulation, and LOOK SQUIRREL. Also most equities trades are automated bots scouring the internet for news stories and not hard-nosed thinking human analysts like Warren Buffet was his entire career.
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If you believe you are in a critical horse race, and it isn't illegal to do it, it can't hurt to bet on two different horses. You only need one of them to win.
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MilanKraft
Ars Tribunus Angusticlavius
Apparently people didn't like my circle-jerk reference (relating to circular, incestuous investments ongoing). Let's try a different tack:
I still have a hard time wrapping my brain around these types of deals. Google wants Anthropic to lose the race to its own models / ecosystem... simultaneously, Google invests $40B in the models it wants to lose.
One wonders with these types of investments specifically (different from companies that don't make their own models), what types of silent agreements are being made along the lines of "if your model becomes the defacto standard, we get ____."
I still have a hard time wrapping my brain around these types of deals. Google wants Anthropic to lose the race to its own models / ecosystem... simultaneously, Google invests $40B in the models it wants to lose.
One wonders with these types of investments specifically (different from companies that don't make their own models), what types of silent agreements are being made along the lines of "if your model becomes the defacto standard, we get ____."
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I’d like to coin “EI” for “enshittified intelligence”. This is the most honest abbreviation for such technology.
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The oroborus is speeding up. It's not enough anymore for one tech company and one AI company to partner up, now to keep the AI grift from collapsing all the big players are having to combine to pump money into the same entities just to keep things afloat with the absurd cash burn
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Exactly, if Claude Code can help Google now, and if their special sauce keeps them in the lead, then better for Google to throw their weight behind the potential victor and benefit over the interim. What's $40 billion to Google anyways?
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Is anyone trying to profit yet? Step 1 of the enshitification cycle is always sell at a loss to maximize market share and attract investment.
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Imagine that. A surveillance company investing in another surveillance company. Gee, I wonder what Google will do with even more intrusive avenues of advertising?
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The valuation game has really become a free money generator since Covid. Invest a 10 billion to make your earlier 1 billion investment worth 100 billion. Then others will invest and make it worth more. Meanwhile the company loses billions a year, lol
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Sounds like another "letter of intent." Such proclamations carry no legal authority/value. OpenAI managed to cause a catastrophic RAM price increase with their own letter, and guess what? They haven't been following through. The memory industry took it as a signal, however, so prices will remain sky high.
Right now I feel like all the pirates are out to steal all the money from everyone gullible enough to play, especially retail. Even things like the Iran war have had certain individuals profiting from insider trading and actions from the a corrupt U.S. president.
At least the weaknesses have been publicized and will be addressed...Hopefully...
Right now I feel like all the pirates are out to steal all the money from everyone gullible enough to play, especially retail. Even things like the Iran war have had certain individuals profiting from insider trading and actions from the a corrupt U.S. president.
At least the weaknesses have been publicized and will be addressed...Hopefully...
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An investment isn't a gift.
Just rephrase that to "why would they want to own a piece of it?" and you answered your own question.
It's much cheaper to acquire your competition if you get in early. Plus they can be each other's customers . . . which somehow isn't illegal.
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While mostly true, it's for a limited time, and then it gets dumped into the furnace and burned, never to be seen again. Lost to the economic reality, forever...
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When two huge competitors work together to dump large amounts of money into what is effectively a third competitor that should be a flashing red alarm that something very wrong is happening in the economy
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The goal is to get enough people addicted to it and then raise prices to the point where they’re profitable. Which means prices will go at least 10-20x I’d guess, or they purely go to a usage based model where the price is cost + markup.
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How do we know this – from what credible sources? The most I can find is that Bloomberg says that Anthropic says this is the case. Can Google corroborate anything? What are the terms for the $10 billion, let alone the "up to $40 billion"?
I really don't appreciate a headline that says Google WILL invest as much as $40 billion, when at this point even $10 billion is an unverified rumor from a startup not exactly known for their veracity. Saying that it will be x strikes me as just misleading.
I really don't appreciate a headline that says Google WILL invest as much as $40 billion, when at this point even $10 billion is an unverified rumor from a startup not exactly known for their veracity. Saying that it will be x strikes me as just misleading.
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I lived through the dot-com bubble and burst. It was a massive overinvestment during a hysterical cyber gold rush ushered in by internet technology that was certain to revolutionize society.
This bubble is just so stupid. It is completely driven by FOMO and incompetence around a technology that nobody wants, puts massive strain on energy and natural resources, and is already exhibiting scaling issues. All they have left is to yap about billion-this, billion-that.
This bubble is just so stupid. It is completely driven by FOMO and incompetence around a technology that nobody wants, puts massive strain on energy and natural resources, and is already exhibiting scaling issues. All they have left is to yap about billion-this, billion-that.
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NYT is reporting both companies have confirmed it but "made no further comment". Be weird if it was only rumour, but this is Bloomberg we're talking about
Given the amount Google has already invested, it wouldn't be at all surprising.
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You're not wrong about most of that, but characterising it as "a technology nobody wants" is hyperbole at best. There is clearly value in many aspects of "AI". It's like saying nobody wanted the web during the .com bubble.
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Given that Anthropic stood their ground with DoD and didn't just instantly capitulate like almost all other companies, I'm glad it's them over the others.
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For once, a tech valuation that aligns with my own estimation and outlay. As a developer, I've paid this company thousands of dollars in the past few months and am happy with what I've received.
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Most of the demand is API and claude code. I've been burning millions of tokens on some software project of mine. What they are trying to do, it seems, is develop this technology to the point where they can meet current demand while lowering the cost per token by 10x. The demand is exceeding supply but they are burning cash keeping prices as low as they are for subscription services. The current coding models are quite capable if given proper instruction and direction. They just cost too much to run.
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So they lose money on every token but they'll make it up on volume?
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They'll make it up on future revenue with a hooked customer base and long-term demand, paired with decreasing cost-per-token for existing models. A "frontier model" from 24 months ago has seen its cost/token drop 10x or more in the intervening two years, and there is still heavy demand for those models for certain workloads.
This is the Uber model at play (as one example out of many) and it has worked in the past. Subsidize a service, capture a large customer base through rapid expansion (also subsidized), raise prices to become profitable once the market stabilizes.
Not saying this is the best business model, and certainly not saying it benefits consumers, but it has been shown to work before and that's the bet being made here.
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