WEBVTT - The IPO 0:00:02.759 --> 0:00:04.439 Bloomberg Audio Studios. 0:00:04.900 --> 0:00:05.600 Podcasts. 0:00:05.920 --> 0:00:06.439 Radio. 0:00:06.880 --> 0:00:07.280 News. 0:00:08.240 --> 0:00:12.270 How much is riding on this IPO, Dave? 0:00:12.510 --> 0:00:14.630 I mean, I'm not sure I can put a number 0:00:14.690 --> 0:00:17.650 on it. It feels like everything, right? I mean, the 0:00:17.710 --> 0:00:20.490 AI business is propping up the economy. 0:00:23.770 --> 0:00:25.840 I'm Sarah Holder, and this is The Big Take from 0:00:25.860 --> 0:00:29.760 Bloomberg News. Today on the show, Anthropic is going public. 0:00:30.390 --> 0:00:33.110 what we learn from the company's S-1, and what its 0:00:33.250 --> 0:00:40.960 IPO could mean for the rest of the economy. Bloomberg 0:00:41.000 --> 0:00:45.520 Opinion columnist Dave Lee and Mike Regan, managing editor for U.S. Equities, 0:00:45.600 --> 0:00:49.900 thanks for joining us to talk about Anthropic's S-1 filing, 0:00:50.120 --> 0:00:52.729 the paperwork the company has to submit to the SEC today. 0:00:53.020 --> 0:00:55.920 before going for an initial public offering. Mike, I want 0:00:55.940 --> 0:00:58.920 to start with the size of the planned IPO, which 0:00:58.980 --> 0:01:04.230 could come mid-November. What kind of valuation is Anthropic seeking? 0:01:04.490 --> 0:01:07.250 Well, so we don't know exactly right at the moment. 0:01:07.670 --> 0:01:10.630 We have reported that they plan for it to be 0:01:10.830 --> 0:01:14.370 even bigger than SpaceX, which was the largest IPO. It 0:01:14.410 --> 0:01:19.690 raised about $ 86 billion. So we're looking at possibly $ 90, 0:01:19.140 --> 0:01:23.250 maybe even $ 100 billion. raised at a valuation that is 0:01:23.360 --> 0:01:26.120 still sort of up in the air. I think a 0:01:26.140 --> 0:01:30.100 lot depends on the feedback the bankers get on the 0:01:30.140 --> 0:01:33.039 roadshow when they really take this to potential buyers and say, 0:01:33.080 --> 0:01:35.100 what are you willing to pay for this? But call 0:01:35.140 --> 0:01:37.580 it somewhere between $ 1. 5 and $ 2 trillion. 0:01:37.600 --> 0:01:41.550 Wow. And Dave, $ 100 billion, $ 90 to $ 100 billion trying 0:01:41.569 --> 0:01:45.590 to raise. Give me a sense of what this company 0:01:45.610 --> 0:01:47.410 would need so much money for. 0:01:47.490 --> 0:01:47.610 Yeah. 0:01:48.140 --> 0:01:51.340 Well, this will come as little surprise. It's about compute, compute, compute, right? 0:01:51.400 --> 0:01:53.900 Getting hold of those chips or getting at least access 0:01:53.920 --> 0:01:57.260 to use those chips. We know that takes a ton 0:01:57.280 --> 0:01:59.380 of data centers. We know it needs lots of energy. 0:01:59.400 --> 0:02:02.230 And then also, you know, there's the continued sort of 0:02:02.750 --> 0:02:05.090 need to retain talent and have new talent. This is 0:02:05.110 --> 0:02:10.790 an intensely competitive area, obviously. And, you know, when you're 0:02:10.810 --> 0:02:14.299 anthropic and you're a frontier lab, You need to make 0:02:14.320 --> 0:02:17.720 sure that you're constantly at that frontier. Otherwise, the cascading 0:02:17.760 --> 0:02:20.180 effect of being slightly behind all the time is going 0:02:20.200 --> 0:02:20.980 to be a big, big problem. 0:02:21.120 --> 0:02:23.520 Well, the S1 gave us some fresh insights into anthropics, 0:02:23.540 --> 0:02:25.150 revenue and spending, which I think a lot of people 0:02:25.190 --> 0:02:28.130 were really interested to see. It is bringing in a 0:02:28.169 --> 0:02:30.530 lot more money than last year and faster, but it's 0:02:30.550 --> 0:02:33.710 also spending a lot more money than last year. Walk 0:02:33.750 --> 0:02:35.780 us through the cash flow they reported. 0:02:36.110 --> 0:02:40.000 Yeah, I think the operating cash flow was something like 0:02:40.000 --> 0:02:44.060 $ 3. 9 billion. I mean, obviously, the headline net loss number 0:02:44.100 --> 0:02:47.320 was like $ 80 billion, but that's due to basically an 0:02:47.340 --> 0:02:51.980 accounting maneuver to account for the value of some convertible 0:02:52.040 --> 0:02:52.919 securities they sold. 0:02:53.240 --> 0:02:55.000 Why would they do that accounting maneuver? 0:02:55.340 --> 0:02:58.760 Basically, it shows how much the company's valuation has expanded. 0:02:59.020 --> 0:03:02.040 These are notes that can convert to equity, so they're 0:03:02.060 --> 0:03:04.839 a liability to the company. But the only reason they 0:03:04.880 --> 0:03:09.030 ballooned out is because the company itself, its valuation has 0:03:09.090 --> 0:03:13.110 expanded so much. So it now owes these investors that 0:03:13.150 --> 0:03:15.950 much equity, but it's not paying out of pocket for 0:03:16.010 --> 0:03:16.470 any of that. 0:03:16.870 --> 0:03:20.269 So counterintuitively, an $ 80 billion net loss actually makes the 0:03:20.310 --> 0:03:21.250 company look a little better? 0:03:22.180 --> 0:03:25.360 It's not a huge deal. Yes, I know it is counterintuitive. 0:03:25.800 --> 0:03:29.260 But I think the main takeaway from a lot of investors' 0:03:30.360 --> 0:03:33.339 reading through the numbers on this, is how much they 0:03:33.400 --> 0:03:35.380 don't have a ton of debt. In other words, they 0:03:35.430 --> 0:03:38.610 have a lot of commitments, to Dave's point, to spend 0:03:38.690 --> 0:03:42.850 on compute. But instead of doing what, say, the Googles 0:03:42.890 --> 0:03:45.230 of the world or the Amazons of the world are 0:03:45.250 --> 0:03:48.610 doing and building out their own data centers, they're basically 0:03:48.650 --> 0:03:50.890 just planning to rent them for the most part. Now, 0:03:50.930 --> 0:03:53.720 that could change a little bit in the future, but 0:03:53.750 --> 0:03:57.200 their commitments are to these leases over the next five 0:03:57.220 --> 0:03:59.880 or 10 years. to the Amazons of the world, the 0:03:59.920 --> 0:04:02.540 Googles of the world, to the Microsofts and the SpaceX 0:04:02.680 --> 0:04:03.180 of the world. 0:04:03.280 --> 0:04:05.120 And what is the scale of those commitments? That's hundreds 0:04:05.160 --> 0:04:05.900 of billions of dollars. 0:04:05.920 --> 0:04:09.060 It's hundreds of billions of dollars, upwards of $ 800 billion 0:04:09.220 --> 0:04:12.860 over the next, call it, decade or so. So it 0:04:12.900 --> 0:04:17.140 is a huge commitment, but it's somewhat different than simply 0:04:17.200 --> 0:04:20.180 having that debt. They're not paying interest on it. It 0:04:20.220 --> 0:04:24.159 provides them some flexibility. Some of them, not most of them, 0:04:24.300 --> 0:04:28.550 are cancelable. It's known as being an asset-light business. which 0:04:28.610 --> 0:04:30.860 is kind of what was a lot of the attraction 0:04:30.920 --> 0:04:34.860 to the Googles and the Amazons of the world until 0:04:34.880 --> 0:04:37.960 they decided to really invest heavily in their own data centers. 0:04:38.220 --> 0:04:41.240 Anthropic is also dependent on some of these companies in 0:04:41.680 --> 0:04:45.060 another way, right? Nearly half of its revenue is now 0:04:45.110 --> 0:04:49.990 coming from money that Amazon, Google, and Microsoft pass along 0:04:50.410 --> 0:04:53.589 when their cloud customers access Anthropic's AI models. 0:04:54.350 --> 0:04:56.029 Why is that seen as a risk? 0:04:56.760 --> 0:05:00.440 Well, because, you know, they're paying a commission to those 0:05:00.460 --> 0:05:03.930 hyperscalers to get that revenue. They had a great line 0:05:04.089 --> 0:05:08.910 in the S1. They described the cloud providers as, quote, investors, customers, 0:05:09.130 --> 0:05:11.770 distribution partners and competitors. 0:05:11.190 --> 0:05:11.630 All at once. 0:05:11.670 --> 0:05:16.089 You know, obviously, you know, Google and Microsoft and SpaceX 0:05:16.110 --> 0:05:19.530 are all competing with them in the A.I. space while 0:05:19.630 --> 0:05:22.350 at the same time, you know, providing them this computing 0:05:22.390 --> 0:05:23.180 power they need. 0:05:23.310 --> 0:05:25.940 So partners and competitors sounds messy fast. 0:05:26.220 --> 0:05:28.620 It's very much so. And investors as well. And in 0:05:28.660 --> 0:05:32.620 many cases, if you've seen those circular financing diagrams, you know, 0:05:32.880 --> 0:05:34.440 this is this is exactly this. 0:05:34.839 --> 0:05:37.880 OK, speaking of risks, usually the risks in an S1 0:05:37.960 --> 0:05:41.450 are like. we could face new competition from similar businesses, 0:05:41.470 --> 0:05:43.950 or there could be new regulatory changes that make our 0:05:43.990 --> 0:05:46.570 product harder to get. Or I was reading Jersey Mike's 0:05:46.790 --> 0:05:50.270 S-1 filing from earlier this year. It's like food safety risks. 0:05:50.589 --> 0:05:55.270 But Anthropics Risk Prospectus was 94 pages long and included 0:05:55.300 --> 0:05:57.860 some risks I have never seen in an S-1, like 0:05:58.300 --> 0:05:59.979 existential risk to humanity. 0:06:01.200 --> 0:06:02.780 Dave, what stood out to you? 0:06:03.140 --> 0:06:05.860 Well, I mean, the length, as you say, extraordinary, right? 0:06:05.880 --> 0:06:08.820 It's a novel's worth of risks. And the breadth of 0:06:08.930 --> 0:06:12.289 it is fascinating. This is a company that has sort 0:06:12.310 --> 0:06:14.670 of threats from all sides, right? It could be from 0:06:14.710 --> 0:06:18.029 the U.S. government, which has tried to designate them as 0:06:18.070 --> 0:06:21.420 a risk and take them out of being used for 0:06:21.450 --> 0:06:25.440 government contracts over a row with the defense secretary. Then 0:06:25.460 --> 0:06:28.620 you've got, you know, rows around intellectual property rights and 0:06:28.660 --> 0:06:32.240 whether anthropics should be allowed to scrape data from certain sources. 0:06:32.630 --> 0:06:35.050 Then you have things about climate risk. Then you have, 0:06:35.130 --> 0:06:37.029 can we get enough energy? Then we have, can we 0:06:37.070 --> 0:06:39.969 just carry on being the best of this? But the 0:06:40.029 --> 0:06:42.510 most sort of, the one that gives you the most pause, 0:06:42.560 --> 0:06:45.460 I think, is just as a human being, is to 0:06:45.480 --> 0:06:47.640 sort of look and say, when they talk about existential risk, 0:06:47.660 --> 0:06:50.640 and so they're saying things like, our models pose catastrophic 0:06:50.680 --> 0:06:55.780 and existential risks to humanity, particularly if such systems are misused, replicated, weaponized, 0:06:56.360 --> 0:06:58.820 or allowed to operate of a high degree of autonomy. 0:06:58.860 --> 0:07:01.480 And there's this idea that what they're creating could just 0:07:01.580 --> 0:07:02.360 go off the rails. 0:07:02.860 --> 0:07:05.680 And Dave, you made the provocative point that including some 0:07:05.720 --> 0:07:09.500 of these caveats and disclaimers was essentially a tactic to 0:07:09.560 --> 0:07:11.340 weed out the weak investors. 0:07:11.780 --> 0:07:12.360 Explain that. 0:07:12.500 --> 0:07:12.720 Yeah. 0:07:12.740 --> 0:07:16.140 So in the introduction to the S1, there's a passage 0:07:16.180 --> 0:07:18.180 in there talking about how they like to hire people. 0:07:18.220 --> 0:07:21.020 And they describe it as the anti-sell. And they bring 0:07:21.060 --> 0:07:23.430 in a candidate and they say, well, here's all the 0:07:23.460 --> 0:07:26.090 reasons why you shouldn't work here. It's going to be hard. 0:07:26.270 --> 0:07:29.680 There's risks. It might all fail. And they say... Many 0:07:29.710 --> 0:07:32.340 candidates might leave at that point, but the ones that remain, 0:07:32.360 --> 0:07:34.140 they're the ones that we want to hire, the sort 0:07:34.160 --> 0:07:37.200 of anti-sale process. They're sort of doing the same approach 0:07:37.240 --> 0:07:39.640 here with this S1. They're sort of saying, here's all 0:07:39.660 --> 0:07:43.040 the reasons almost why you shouldn't back this, because there's 0:07:43.080 --> 0:07:45.200 all these things that could go wrong, in the hope, 0:07:45.260 --> 0:07:47.620 I think, that the investors they do get will sort 0:07:47.640 --> 0:07:48.000 of be. 0:07:47.880 --> 0:07:48.660 Along for the ride. 0:07:48.700 --> 0:07:50.700 Because one of the things the company's making very, very 0:07:50.760 --> 0:07:54.700 clear throughout this, the founders are going to have control 0:07:54.820 --> 0:07:56.260 over what the company does. They're going to have the 0:07:56.300 --> 0:07:59.580 majority of shares. They're going to call the shots very, 0:07:59.620 --> 0:08:02.140 very clearly. And this is, I mean, that's pretty typical 0:08:02.180 --> 0:08:04.920 of tech companies. We've seen founders, you know, keep control 0:08:04.940 --> 0:08:07.850 in the past. But then they also go on to say, 0:08:07.870 --> 0:08:10.390 you know, there'll be moments when we might have a 0:08:10.410 --> 0:08:12.270 model that's better than any model in the world, but 0:08:12.290 --> 0:08:14.330 we might be decided to hold that back because we're 0:08:14.350 --> 0:08:17.750 worried about the safety and that might harm us commercially 0:08:17.810 --> 0:08:21.010 as well. This company has built its entire ethos on 0:08:21.070 --> 0:08:23.270 being the safe AI company. Now, whether you take that 0:08:23.310 --> 0:08:25.530 on face value or not is a different matter. But, 0:08:25.810 --> 0:08:28.400 you know, this is a company that was born out 0:08:28.480 --> 0:08:31.200 of a group of employees at OpenAI saying, we don't 0:08:31.220 --> 0:08:32.839 like how this is going, we're going to go and 0:08:32.900 --> 0:08:34.520 start our own company. So it's in the sort of 0:08:34.540 --> 0:08:37.930 DNA of the firm. And I think this is the 0:08:37.950 --> 0:08:40.030 case of seeing how that plays out once you hit 0:08:40.050 --> 0:08:42.690 the reality of quarterly earnings and the public markets. 0:08:44.390 --> 0:08:46.990 When we come back, Dave Lee and Mike Regan on 0:08:47.030 --> 0:08:51.130 why Anthropic is going public now and how much is 0:08:51.220 --> 0:09:04.520 riding on its success. Our colleague Shireen Ghaffari made a 0:09:04.620 --> 0:09:07.439 helpful point in one of her recent articles that Anthropic 0:09:07.500 --> 0:09:11.020 is in this interesting position, right? Because on the one hand, 0:09:11.160 --> 0:09:14.180 it's pushing the industry to slow down on AI development, 0:09:14.240 --> 0:09:18.000 prioritize safety. On the other hand, it is moving full 0:09:18.020 --> 0:09:20.920 steam ahead on this IPO. A few weeks ago, New 0:09:20.970 --> 0:09:24.090 York City's comptroller sent a letter to Anthropic CEO Dario 0:09:24.170 --> 0:09:28.030 Amadei asking him to pause the IPO immediately. focus on, quote, 0:09:28.230 --> 0:09:33.089 addressing these unprecedented risks. Why isn't it doing that? Why 0:09:33.130 --> 0:09:35.070 is it pushing ahead with this IPO? 0:09:35.510 --> 0:09:39.550 Well, one really important thing, and it's pretty simple, is 0:09:39.630 --> 0:09:42.770 that there's sort of an unwritten rule in the IPO 0:09:42.809 --> 0:09:45.850 world where if you have a big IPO, you do 0:09:45.910 --> 0:09:49.570 not want to launch it after Thanksgiving. You do not 0:09:49.610 --> 0:09:55.050 want to be competing with investors Thanksgiving, Hanukkah, Christmas, New Year, 0:09:55.620 --> 0:10:01.060 kids vacation plans. So they filed confidentially over the summer, 0:10:01.100 --> 0:10:04.860 meaning they provided the SEC with this document, but the 0:10:04.900 --> 0:10:08.100 public couldn't see it until yesterday. So once they did that, 0:10:08.340 --> 0:10:10.820 the clock was kind of ticking. I think what happened 0:10:10.940 --> 0:10:13.180 is you look at the stock market on any given day, 0:10:13.220 --> 0:10:15.599 if the chip makers are selling off and the AI 0:10:15.620 --> 0:10:17.820 stocks are selling off, it had a lot of people 0:10:17.900 --> 0:10:20.160 wondering like, okay, are they really going to do it 0:10:20.220 --> 0:10:23.599 this year? Will they push it to next year? And 0:10:23.620 --> 0:10:27.080 I think had they done that, that would have been 0:10:27.120 --> 0:10:29.640 sort of a gut punch to the market because even 0:10:29.679 --> 0:10:32.780 if you look at the market reaction yesterday, it wasn't 0:10:32.800 --> 0:10:36.730 a huge, enormous rally in stocks, but it was a 0:10:36.809 --> 0:10:39.410 nice recovery in some of the chip makers and some 0:10:39.429 --> 0:10:41.710 of the other big tech companies that have been beaten 0:10:41.730 --> 0:10:44.969 down and the market indexes as a whole rallied simply 0:10:45.010 --> 0:10:47.110 because this company filed. 0:10:47.630 --> 0:10:50.270 OpenAI has indicated it isn't planning on going public until 0:10:50.360 --> 0:10:54.280 next year. Why is Anthropic ready and not OpenAI? 0:10:54.559 --> 0:10:57.280 I think with both companies, there's not necessarily a super 0:10:57.400 --> 0:11:01.920 urgency to access that equity capital. You look at Anthropic, 0:11:01.960 --> 0:11:04.330 for example, it's raised $ 141 billion. It has $ 131, almost 0:11:04.330 --> 0:11:07.969 $ 132 billion in cash and short-term investments just sitting on 0:11:07.990 --> 0:11:16.579 its balance sheet. So it has a big chunk of 0:11:16.660 --> 0:11:21.980 cash to sort of weather whatever comes in the near future. So, 0:11:22.100 --> 0:11:24.500 you know, clearly they decided, you know, let's get it 0:11:24.520 --> 0:11:26.680 done this year. I don't think we have a clear 0:11:26.720 --> 0:11:28.360 sense of why OpenAI is waiting. 0:11:28.380 --> 0:11:30.380 Yeah, I mean, I think in any of these cases, 0:11:30.450 --> 0:11:32.750 I mean, timing is everything, isn't it, as you were saying? 0:11:32.900 --> 0:11:35.730 And in the case of Anthropic, I mean, they do 0:11:35.970 --> 0:11:38.130 warn that, you know, they've had this wonderful revenue growth. 0:11:38.190 --> 0:11:41.230 I think it was 1,300% year-on-year for the first six 0:11:41.270 --> 0:11:44.090 months of this year compared to last. But they warned 0:11:44.130 --> 0:11:46.170 that that growth might not be sustainable. You know, for 0:11:46.190 --> 0:11:48.750 all we know, they've waited another year's time that some 0:11:48.770 --> 0:11:51.040 of that tailing off might have been evident in the filing. 0:11:51.059 --> 0:11:53.420 And then that makes going public much harder. Missing the 0:11:53.480 --> 0:11:56.780 window to do it can be really sort of fatal 0:11:56.840 --> 0:11:59.720 to doing it at all, actually, in many cases. And, 0:11:59.760 --> 0:12:01.920 you know, what would be interesting to see is how 0:12:02.000 --> 0:12:05.250 damaging it might be to OpenAI to go second. Because 0:12:05.290 --> 0:12:07.490 if this comes out of the gate, doesn't perform very, 0:12:07.530 --> 0:12:09.829 very well, that's going to make it all the harder 0:12:09.910 --> 0:12:10.270 for OpenAI. 0:12:10.660 --> 0:12:14.440 And there clearly is a pretty fierce competition to be 0:12:14.500 --> 0:12:19.540 first to get this capital. Two hours before Anthropix S1, 0:12:19.960 --> 0:12:23.520 Meta came out and said, we're selling a bunch of stuff. 0:12:23.660 --> 0:12:26.640 And they upped it to like $ 98 billion. And you 0:12:26.660 --> 0:12:30.819 just had SpaceX raise $ 86 billion. Alphabet sold a big 0:12:30.980 --> 0:12:34.020 chunk of stock. So there is sort of a first 0:12:34.059 --> 0:12:36.920 mover advantage because At some point, I think a lot 0:12:36.940 --> 0:12:39.219 of people on Wall Street think, well, we're going to 0:12:39.240 --> 0:12:41.960 reach the limit of demand for all this equity. 0:12:42.000 --> 0:12:45.689 Yeah. Is there investor appetite for all these equity raises? 0:12:46.270 --> 0:12:49.829 So far, yes. But I think, you know, the general 0:12:49.850 --> 0:12:52.550 thinking is at some point we'll reach a limit and 0:12:52.570 --> 0:12:54.850 we'll start to see some pushback. And we already have 0:12:54.870 --> 0:12:59.160 seen some pushback on some of the smaller data center IPOs. 0:12:59.360 --> 0:13:02.860 There was an Australian company that actually postponed its IPO plans. 0:13:03.480 --> 0:13:07.740 And there's sort of jitters around the more minor players, 0:13:07.820 --> 0:13:13.429 the neoclouds, as they're called. So these big household name companies, 0:13:13.990 --> 0:13:16.510 I think, are one thing compared to the smaller players. 0:13:16.570 --> 0:13:18.010 But at the end of the day, I mean, we're 0:13:18.050 --> 0:13:21.800 talking about hundreds of billions of dollars of new equity 0:13:21.840 --> 0:13:22.520 being sold. 0:13:23.179 --> 0:13:26.059 What would it mean if the IPO didn't meet expectations 0:13:26.179 --> 0:13:29.000 for the economy, for the stock market, for the AI 0:13:29.070 --> 0:13:32.309 companies that are reliant on Anthropic and for Anthropic itself? 0:13:32.570 --> 0:13:34.850 I think it would be seen as a big signal 0:13:35.309 --> 0:13:39.329 that the returns on this aren't going to be where 0:13:39.370 --> 0:13:43.210 we perhaps thought they might be. I think what's going 0:13:43.230 --> 0:13:46.980 to be an interesting litmus test for some of that 0:13:47.000 --> 0:13:49.459 would be when the tech companies report earnings in the 0:13:49.500 --> 0:13:52.679 next week or so. Because that's the other end of this, right? 0:13:52.700 --> 0:13:54.880 It's all well and good sort of backing the companies 0:13:54.900 --> 0:13:56.550 that are building the technology. But when you get to 0:13:56.590 --> 0:13:58.989 the ones that are deploying it, if they're not seeing 0:13:59.010 --> 0:14:02.690 the return on that investment, well, then that upends the 0:14:02.890 --> 0:14:07.790 whole concept. I think for an anthropic, what's particularly intriguing 0:14:07.830 --> 0:14:09.650 is that this is the first sort of pure play 0:14:09.890 --> 0:14:13.550 AI company, AI frontier lab to go public. I mean, 0:14:13.570 --> 0:14:16.000 we've had SpaceX, which has XAI as part of it. 0:14:16.030 --> 0:14:18.650 But when you're SpaceX, you can offset the cost of 0:14:18.690 --> 0:14:21.890 AI by putting rockets into space, right? And the other 0:14:21.930 --> 0:14:24.980 companies that are big in AI and on the market, 0:14:25.010 --> 0:14:28.380 such as Alphabet and Meta, they have legacy businesses that 0:14:28.440 --> 0:14:32.700 can support the massive expenditures on AI, which is just, 0:14:33.060 --> 0:14:35.340 especially in a company like Meta's case, just burning money, 0:14:35.360 --> 0:14:36.700 but they don't mind. They just want to get ahead. 0:14:37.160 --> 0:14:40.590 Anthropic doesn't really have that option. The product is AI, 0:14:40.620 --> 0:14:45.350 and that's the whole thing. And so I think it'd 0:14:45.370 --> 0:14:47.330 be a really interesting test to see how a company 0:14:47.350 --> 0:14:49.550 like that survives, you know, because I think it's a 0:14:49.600 --> 0:14:53.440 fair assumption that after this IPO, they will go back 0:14:53.500 --> 0:14:55.600 and try and raise more money as they go because 0:14:55.620 --> 0:14:57.910 they're just burning through so much of it. And, you know, 0:14:57.950 --> 0:15:01.770 one of the questions about all the compute they've committed to. 0:15:02.670 --> 0:15:05.480 to buying up. There's two different problems. One might be 0:15:05.520 --> 0:15:07.020 they don't have the money to do it. The other 0:15:07.040 --> 0:15:08.359 problem is they might not be able to do it 0:15:08.420 --> 0:15:11.020 because of the competition for that compute as well. So 0:15:12.000 --> 0:15:14.990 it's such a litmus test for the ability for an 0:15:15.110 --> 0:15:18.290 AI company that's just an AI company to survive. 0:15:18.850 --> 0:15:21.150 Mike, how do you think about the stakes of this 0:15:21.250 --> 0:15:24.850 IPO's success or failure, or indeed the success or failure 0:15:24.890 --> 0:15:29.280 of Anthropic as a company when you think about the 0:15:29.320 --> 0:15:30.080 rest of the economy? 0:15:30.570 --> 0:15:34.590 AI is, you know, the main driving force in the 0:15:34.610 --> 0:15:37.690 stock market and the economy as a whole. Now, to 0:15:37.730 --> 0:15:40.290 Dave's point about the, I think it was 94 pages 0:15:40.330 --> 0:15:44.550 of risk factors, you know, it's all laid bare exactly there. 0:15:45.270 --> 0:15:48.990 What could derail all this, right? The existential risk aside, 0:15:49.490 --> 0:15:51.690 you know, if we all do go extinct, we won't 0:15:51.710 --> 0:15:55.910 be worrying about the stock market. But, you know, the... Peace, finally. 0:15:56.070 --> 0:15:57.450 Right. 0:15:57.910 --> 0:16:01.970 But I think Obviously, the huge risk and the big 0:16:02.010 --> 0:16:05.030 elephant in the room is the midterms coming up. And, 0:16:05.670 --> 0:16:08.790 you know, if Democrats take control of one or both 0:16:09.050 --> 0:16:12.550 houses of Congress, how hard will they push back on 0:16:12.590 --> 0:16:16.660 this massive investment being done in data centers? How loud 0:16:16.680 --> 0:16:19.060 will they ring those bells about the environment, about the 0:16:19.100 --> 0:16:23.280 potential for job loss, about all these risks laid out 0:16:23.320 --> 0:16:26.580 in those 94 pages? Really, the whole letter was trying 0:16:26.640 --> 0:16:31.080 to acknowledge that backlash and claim that high ground as 0:16:31.740 --> 0:16:33.900 we're the one who's going to do this right. You know, 0:16:34.080 --> 0:16:37.780 whether that's enough to placate a Democratic Congress is a 0:16:37.780 --> 0:16:38.320 big question mark. 0:16:42.200 --> 0:16:45.060 This is The Big Take from Bloomberg News. I'm Sarah Holder. 0:16:45.570 --> 0:16:48.110 To get more from The Big Take and unlimited access 0:16:48.150 --> 0:16:54.010 to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. 0:16:54.470 --> 0:16:56.950 If you liked this episode, make sure to subscribe and 0:16:56.990 --> 0:16:59.430 review The Big Take wherever you listen to podcasts. 0:17:00.000 --> 0:17:03.320 It helps people find the show. Thanks for listening. We'll 0:17:03.340 --> 0:17:03.940 be back tomorrow.