Beginning of the End
This is not the end, but it is the beginning of the end.
I speculated last week that Anthropic might be forced to accept a lower valuation, else postpone its IPO. That turned out to be a prescient guess given that there are already rumours in the business press that $1.1b is what institutional investors feel comfortable with. Is this the beginning of the end for AI or just a temporary blip?
Long time readers might’ve already guessed that I think this is the end for Altman and Amodei’s corporate colossi. If a business like Anthropic couldn’t run during not only optimal business conditions, but also during a time with very limited regulatory oversight and a cheerleading White House there was never a viable business there. As more and more people realise this the prospect of a successful Anthropic IPO will grow ever more remote.
But the real worry is that someone like Leopold Aschenbrenner has lost a lot of money with leveraged bets on AI companies. What happens if someone had a margin call and is forced to sell their Coreweave shares? What happens when Softbank has to mark its balance sheet to market?
OpenAI has already been forced to reduce its valuation and raise less less cash than it originally wanted. And it might take time for everyone to figure out what has been lost and who is owed what, but odds are that the Anthropic IPO fails to recapture the glory of the earlier AI enthusiasm.
People have stopped giving these companies the benefit of the doubt, and they will never get that back. And the bubble was built on the benefit of the doubt.
If you liked this post you can read a previous post about Anrthopic's IPO here or the rest of my writings here. I also have a section for longer reads I call essays here, I particularly recommend my series called The Bird & The Technoking exploring Elon Musk's takeover of Twitter, and its political and cultural implications. It'd mean a lot to me if you recommended the blog to a friend or coworker. Come back next Monday for a new post!
I've always been interested in politics, economics, and the interplay between. The blog is a place for me to explore different ideas and concepts relating to economics or politics, be that national or international. The goal for the blog is to make you think; to provide new perspectives.
Written by Karl Johansson
Cover photo by Skyler Ewing from Pexels, edited by Karl Johansson
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