Anthropic should prioritize compute runway over IPO valuation

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 53:43

   you said $1 trillion for Anthrop a couple weeks ago. What are you thinking here? Do you think they have significant headwinds, or do you think this is going to be a blockbuster IPO? Where are you at? here in october of 2026 no my my comments are not because i'm negative on the company i think i was i found the revenue breathtaking i mean it's incredible like 16.8 billion in a quarter for a three-year-old company it's just ridiculous you've never seen anything like it i don't know how to process it i think their products are exceptionally good i think they're doing the hard work, and to OpenAI's credit, they are as well, of walking down the price curve so that they're less and less at risk of open source. I still think that there's a bunch of cannibalization that has to happen on the token side. I also think the big thing that has to happen in AI

2. 54:36

   is we're effectively like in 1999 and 2000 in the internet media world where everybody just works on CPM, you know, that time it was cost per thousand ads. Right now it's cost per million input tokens. We will move to CPC and CPA, right? And so when Google invented and scaled AdWords and AdSense, the market exploded, right? Because we went from buying a thousand ads to just getting an outcome. Right now we buy a million tokens, we will eventually move to an outcome.

3. 55:08

   And I think when that happens, this market will just go absolutely batshit crazy. So So these guys are going to do great. They're a great company. Here's my very specific thing about why I think they should price it to clear the market for $200 billion. And I'm very specific about that number. They need, in my estimate, at least $200 billion. And I think if you want to be super safe, a quarter trillion gets the job done. And again, what does the price need to be to attract that incremental dollar off the sidelines?

4. 55:42

   Can they raise 80 billion in an IPO at 1.78 or 9 trillion? I think so, handily. Can they raise 100? Maybe it's pushing it. 150, I think you need to be back down to 1.5. So you're saying you want them to raise more money at a lower valuation so they have a war. 150 billion at 1.5 trillion is not enough. It's not enough. $200 billion barely gets them a few gigawatts. And that is the bottom line math. If Anthropic is going to go through and survive an eventual correction, I think it's much better for them to have 200 to $250 billion today, than to try to ring the bell at 1.9 or 2 trillion for 80 billion.

5. 56:29

   file a mixed shelf which takes about six months hope the markets are in line and I just think there's more risk in the future than there is today right now and so why take the risk price it to clear the market how much are you saying they should raise Shmoth 200 billion minimum but I would like a quarter trillion if I was the anthropic shareholder which means I don't think you can raise a quarter trillion at two trillion I think you can raise a quarter trillion at a trillion What do you think, Ben? You go with Chamath, raise more cash now and have the rainy day fund, have the resiliency or go for the valuation optimization as founders are one to do these days and many investors are one to do.

6. 57:12

   As a former CEO who almost died 17 times by running out of cash or potentially running out of cash, I kind of like I agree with the sentiment, which is the only thing that's going to or the thing most likely to stop the company is financing risk. And so why take it? You know, like you've got all the other risks, supply chain risk, you've got competitive risk, you've got the, you know, Chinese open source model risk, you've got all this stuff.

7. 57:43

   And then the founders don't care. Yeah, and the founders don't care. They all own two and a half percent each. So it's not like they should be optimizing. They seem to not care about money, which I think is very positive attribute about the entire founder group and anthropics. So in part, that's why they're so successful is that they don't care about the money. Get the tonnage of dollars inside the company.

8. 58:00

   Having said that, you know, like what the safe amount of money is, is, you know, it's a little, it's always a little bit in the eye of the beholder, like how much, you know, in the, in the dire scenario, like what exactly happens, I'm not deep enough on to say whether it should be 250 million or 150 billion. I think the number has to work backwards from compute in order to basically get through a three to five year window. And I think if you you have to get out of spot, because as Sachs just said, it's too expensive for Ant, they shouldn't be spending 50 billion when they could be spending 20. But if you had 200 billion, you have a path to five to 10 gigawatts that you can finance completely on your own, with the magic boxes from the core weaves and the like.

9. 58:47

   i would optimize for that optimize for surety of compute and everything else will solve itself and in a five and ten year window they'll achieve the upper bound of their capability at 50 60 70 billion they may not survive the pricing implications of what happens in the spot market over the next two or three years and and then they'd have to raise a down round yeah and elon's deal with them is i think either party can cancel within 60 or 90 days somebody can look it up what is it the fact that elon did that deal tells you spots going up not down and that he has been going up yeah and he may want this is my point himself yeah he he's not dumb he's the smartest of the smart he's doing spot because he's like i may cancel on you and anthropic's probably thinking oh this is great i can walk away 90 days wrong buddy is the opposite you

10. 59:37

    want the core weave deal they should have got the core weave deal uh i'm sure they did the core wave deal while they could but yeah they need to put a lot of money in a magic box yeah they've got deals with everybody i think yeah i think just by the way like according to semi-analysis