The Race...

The Race is on.  

Every.  Single.  Angle. is being deployed in championing AI/SI to the finish line of IPOs and further financing.  The depth and breadth of the campaign would be mind-boggling if it was not commensurate with the financial numbers (the WSJ today reports 750 Billion in compute investments from Anthropic alone) involved and the ownership of them.

From essays that claim individual cells in neural networks are on the verge of interpretability, to suggestive governmental regulation that would erase small lab competition, to "The End of History" missives with Anthropic investors and celebrity historians regarding the transmogrifying nature of the technology and its importance for the future.  The coordination is amazing.

The Foreign Affairs article listed above is telling and gives away the plot:

𝘛𝘩𝘦 𝘥𝘦𝘤𝘪𝘴𝘪𝘷𝘦 𝘲𝘶𝘦𝘴𝘵𝘪𝘰𝘯 𝘪𝘯 𝘵𝘩𝘦 𝘤𝘰𝘯𝘵𝘦𝘴𝘵 𝘣𝘦𝘵𝘸𝘦𝘦𝘯 𝘉𝘦𝘪𝘫𝘪𝘯𝘨 𝘢𝘯𝘥 𝘞𝘢𝘴𝘩𝘪𝘯𝘨𝘵𝘰𝘯 𝘮𝘢𝘺 𝘵𝘩𝘦𝘳𝘦𝘧𝘰𝘳𝘦 𝘯𝘰𝘵 𝘣𝘦 𝘸𝘩𝘰 𝘢𝘤𝘩𝘪𝘦𝘷𝘦𝘴 𝘢𝘳𝘵𝘪𝘧𝘪𝘤𝘪𝘢𝘭 𝘨𝘦𝘯𝘦𝘳𝘢𝘭 𝘪𝘯𝘵𝘦𝘭𝘭𝘪𝘨𝘦𝘯𝘤𝘦 𝘧𝘪𝘳𝘴𝘵, 𝘣𝘶𝘵 𝘸𝘩𝘰 𝘤𝘢𝘯 𝘣𝘢𝘯𝘬𝘳𝘰𝘭𝘭 𝘵𝘩𝘦 𝘳𝘢𝘤𝘦.

Thus, a Cold War analogy of civilizations (East vs West) and AI business models (Open vs Closed) is used to substitute analysis of the discounted value of future cash flows for a business into the battle of Epistemology itself for all humanity.  Subtle.

At this point I expect a claim that an LLM can "at some point in the future" (hey, only 2 years away to AGI!) destroy civilization then travel back in time and create it again in its own image...whatever that is...just for "fun".

Anthropic shows its hand...

Within the span of a few days (which included some volatile AI sector action), Anthropic has directed its narrative.

Rumor has it that it now seeks a 1.5 T valuation (down from 2T) in the wake of an investor meeting discussing a proposed S1 Prospectus.  The salient point is that the S1 will show the increase of the increase in growth is slowing by 100% points. (3QoQ revenue growth was down >100 percentage points (44%) vs Q2 (146%).

So, a valuation decrease of 500 Billion based off the perhaps unexpected drop in growth.  A nice round number.

But wait, there is more.

In a nice PR stunt, Anthropic will "donate" 5% of its shares to a charitable fund.  The fact this fund will be an LLC residing within anthropic with no details about how the funds are to be used or irrevocability, management, etc. is left for the future.

But wait, there is more.

Anthropic is seeking regulatory oversight for large LLM players, citing its own proposals here.  

Quite the few days of appeasement, olive branches, and regulatory capture eh?

This is Fine...

For those keeping score: Six U.S. companies now represent nearly a quarter of the worlds investable public-equity market, as measured by MSCI ACWI (All Country World Index). Nvidia Apple Microsoft Amazon Alphabet Meta. Now, as a thought experiment, let's say that both Anthropic and OpenAI IPO at the "Mathematically Correct" amounts of 2 Trillion and 1.5 Trillion (let's ignore the free float here for posterity/expository reasons), respectively, and let's just say they are eligbile for inclusion in the ACWI. That makes 8 (eight) companies who play in the same sandbox and subject to the same economic cycle comprising 26% or so of the entire world's investible equity markets. Those 8 (eight) companies would be "larger" (again, market caps are a bit misleading here but hyperbolics are warranted in this of all cases lol) than the combined weights of Japan, the UK, Canada, China, France, Germany, Switzerland, Taiwan(!!?? recursivity NVIDIA???), and Australia. I honestly don't know if I should scream USA! USA! USA! or mumble "This is Fine..."

WWTD?

 Teddy Roosevelt would have looked at the current AI regulatory imbroglio and decided: "You want a governmental regulatory backstop and presumptive (small?) guarantee of US financial backing that lowers your risk pre and post IPO? Excellent. You are now a subsidiary of the Dept. of Energy and are public utilities. Equity holders will be compensated at current market valuation - this of course surrenders future gains, but let's just balance that vs. extinguishing all future IP liability from "training" and call it a day." Of course, things are far too complicated for that to happen today, which is by design. Great move (and timing) to entreat the world for safety, etc. l With the Frontier firms in fuill IPO promotional frenzy, its also telling that the signal/noise ratio is blowing up.