Anthropic is planning to potentially raise money at a $1 trillion valuation.
And on the same day, we have Cloudflare, who is cutting more than 1100 jobs in kind of what they're calling an AI native reset.
This is similar to what we've seen from.
Coinbase and what we've seen also from eBay.
Snapchat has canceled their 400 million perplexity deal because their Q1 revenue for ad sales was 153 billion lower than they expected.
And we also have a bunch of new texts and information from Elon Musk versus Sam Altman lawsuit.
And a couple of really interesting revelations come out of that.
One.
Apparently, Microsoft was worried that open AI was going to quote unquote storm off to Amazon before they gave them a billion dollars.
They're worried, if they didn't give them enough money, that they were going to go leave them and go somewhere else, and so that's kind of what prompted microsoft put a billion dollars in.
Of course, that was probably the greatest investment in microsoft history, so ended up being a great thing for them.
We also learned that Microsoft was deeply skeptical of OpenAI ever achieving AGI before they put that billion dollars in.
And one last juicy thing that we find is there's a bunch of text messages about 78 text messages between Miriam Marotti and Sam Altman after Sam Altman got kicked out, basically him trying to get himself rehired and trying to get the then CTO of OpenAI to bring him back.
And there's a bunch of viral videos that people are making of this where they're like turning into emo punk songs.
And anyways, it's hilarious.
And oh, last thing we got to talk about is Apple's camera equipped AirPods.
They're getting near to be in production and they'll have Siri and AI built into the AirPods.
I'm super stoked about that.
Maybe the most stoked about all of these announcements.
Let's get into all of it on the podcast.
Let's kick this off with the big story, which is Anthropic, coming in for a 1 trillion round of funding.
According to the Financial Times, they've reported on this.
According to the Financial Times, a lot of the demand on this is coming from number one sovereign wealth funds in Asia and the Middle East, and number two from Google and Amazon.
Now, when you do a colossal round like this at a 1 trillion valuation, you have to have big companies or funds backing you.
So this seems to be the source of where a lot of this is coming from.
Some people are saying hey look, this is Google and Amazon trying to get in and double their money really quickly before the IPO happens, or whatever multiple they think they're going to be able to pull off before an IPO happens.
The IPO is slated for the end of 2026.
So at the end of this year, could be in Q3 or could be in Q4.
They're going to be trying to IPO, according to what we're seeing from Goldman Sachs and JPMorgan Chase.
Both of them are pitching an anthropic IPO between 400 and 500 billion dollars.
So they are looking to pick up a lot of money.
Something that's interesting to me though, with all of this is, on the same day we're getting a lot of this news out, we're also getting news that SoftBank apparently, is going to cut its opening eye margin loan target by 40.
So they're bringing that down from $10 billion to $6 billion.
Something a lot of people are talking about though, is with the Goldman and JP Morgan 400 to 500 billion IPO that they're looking at.
The secondaries market is currently pricing private shares of Anthropic at about 2x that.
So there's a couple different theories right now.
Either number one.
The secondaries market is just super overvalued, which is definitely totally possible, or the bankers are trying to lowball the IPO price to try to create a rally on day one.
Personally, I'm leaning towards a day one rally scenario, but I mean...
We'll see what happens when this thing actually goes public and how much the appetite is.
Between now and the end of the year, it feels like even then a lot can happen.
Things are moving pretty quick in the AI industry right now and all around.
The next thing I want to talk about is SpaceX's TeraFab commitment.
They're going to commit 55 billion to this Texas AI chip plant and that could hit 119 billion if some of the later phases get built out.
So they could spend up to $119 billion.
That is massive.
This is all coming from a public hearing notice that was filed in Grimes County Texas, and is tied to a request for tax breaks on the project.
This is a pretty good source.
We're getting this kind of like public information.
This is all part of a earlier announcement that Elon Musk made in March of this year, when he announced that they were going to target 200 gigawatts of quote unquote Earth compute and up to one terawatt of space compute.
It's wild that we have to differentiate the two there.
The reason why I think this is incredible is because SpaceX is a private and cash generating company.
It makes a lot of its money from Starlink, but 55 billion up to 119 billion in spend on this TerraFab is absolutely massive.
And that's on top of what they're already spending on their Starship development.
So they also kind of expanded their Memphis Colossus expansion for XAI's separate kind of compute needs.
And I know that they're doing some smart things financially.
One in particular is that their first Colossus that they built for XAI
They actually just leased that out to Anthropic.
So that data center in Memphis is going to be used there.
And apparently they have kind of a 2.0 that they're using for their own stuff.
They are trying to make some money off of it, but it is wild just how much money they're going to have to spend for this massive tariff app.
All right, let's talk about Apple's camera-equipped AirPods.
This is what I'm super excited.
You've heard me rant endlessly on the podcast about how far behind Apple is because they haven't created their own AI model.
Now, I'm going to say this might be a really incredible play out of them because...
Number one.
We got the news that Apple's going to let you pick if you want Siri on your phone to be powered by Gemini, Claude or ChatGPT, so you can actually pick the AI model.
I think that's a great idea.
These models... go up and down in how powerful they are or which one's the best.
Being able to easily switch between them would be great.
I'm curious if you're going to have to log in with your premium account, right?
So it's like you pay 20 for ChatGP, you want to get premium uh, you have to log into that account.
I'll be curious to see how that goes.
This is after apple's already like kind of had these announcements about deals that they might do, like exclusively with gemini or whatever, and it feels like they might kind of just open source this to everyone to to let them use this.
But With all of that, they're also creating new tools that are powered by this new Siri, which is yet to exist.
And spoiler.
I mean, I don't know if this is a spoiler, but like I'll also throw a caveat that today Apple just got requested to spend 250 million to pay back everyone that bought an iPhone 15 and 16 certain models in the US, because they basically kind of plugged to their Apple intelligence and said that there was going to be all these really awesome AI features built in and none of them actually were there when they launched.
They're like, oh, we're just delaying it.
So they got sued for false advertising.
They got to pay $95 back to everyone that bought one of those phones.
So I'm probably going to go get my $95.
I don't know how I could have claimed that $95, but I better get paid my $95 Apple.
But so yeah, I guess that's the damper on it is.
We'll see if Apple ever ships anything AI, but assuming they're able to get their crap together.
And I mean, if they're just plugging into one of the other AI models, that shouldn't be too hard.
They have these new headphones, these new AirPods that are going to have a camera built into them.
And you're going to be able to talk to Siri through them, which is going to be, of course, running off of whatever LLM you want it to use.
And you'll be able to get information.
I think this is actually a really awesome hardware AI a device.
We've seen a lot of hardware ai devices flop, like the humane pin and the rabbit r1.
Those, in my opinion, were kind of just novelty.
If anyone bought them, it was for this novelty, but they weren't devices that were part of your day-to-day life, like a watch, And so I think any of these smart devices have to already be something that you use.
You don't want to have to try to convince people to add a new device like a pendant.
Apparently, Apple's working on like an AI pendant.
Personally, I don't think that that's going to be a success.
They're also working on smart glasses.
I think that that will work.
We're seeing that work with meta ray bands.
So if it's already a device or like an item that people wear, and you add AI into it, or if you add you know tech into it, I think that's going to work.
But if you try to make them wear a brand new necklace or something, that's just not very normal.
I don't think it's going to work as good.
AirPods are awesome.
I think these have a lot of really cool possibilities.
Apparently they're going to have low resolution cameras on them.
So it's going to be able to see what you're seeing, but it's not high resolution.
I imagine in the future it will be.
So it's not like people are going to be streaming or or like taking a lot of pictures with them, but they will be able to see what's around you.
You'll be able to talk and ask it questions and it will have a view of what's going on, which is really really useful.
And that's kind of what this the meta ray bands initially got so popular for is.
They have the cameras on there that you can.
They can look at stuff, they can record things and they can you can talk to them and it can tell you about what's going on.
So Excited for that.
Who knows when it will come out?
But very good direction from Apple.
I'm excited about that.
Okay, we got to get into some of the drama with Elon Musk and Sam Altman lawsuit and everything going out.
My favorite part about this is that we got discovery on the lawsuit.
So They got a subpoena like all of the text messages and emails from everyone at OpenAI.
And we just get such a better, deeper look at all of the drama Stuff that like it's probably not flattering or exciting or happy for, like Sam Altman and everyone else involved.
So they wouldn't really publish it otherwise.
So for that, I'm kind of happy about this whole lawsuit thing.
But one of the funny things that came out of this, I mean, funny is a relative term.
But Miriam Murady, the former CTO of OpenAI.
She was put in as interim CEO when Sam Altman got kicked out in 2023.
And there is a chain of 78 text messages between her and Sam Altman during that whole time kind of ousting, where he's trying to get back into the company and figure out how to fix things.
And she's, you know, on the board, going to all the board meetings talking to him about what's going on now and you know like why he got kicked out, and all that kind of stuff.
So we get way more insights into all of this from this kind of this text message thread that's going on.
Apparently, four OpenAI board members signed a document terminating Sam Altman, and then they named her as the interim CEO.
Ilya Suskovor had a 52-page memo that he gave to the board outlining why Sam Altman should be kicked out, and that kind of got funneled back to Sam Altman through Miriam Murady.
It's interesting, too, because Ilya Suskovor, obviously, he left, started Super Safe Intelligence.
Miriam Mirati, she left, started her own lab.
It feels like everyone kind of left except for Greg Brockman.
He's still around.
And apparently his stake in Opening Eye is worth about $30 billion today.
So he seems to be doing quite well sticking around.
I'm sure Miriam Mirati and...
Ilya Seskovor have, you know, their equity in the company is probably worth a lot as well.
But basically what we're seeing from the exchange of text messages between Mir and Mirati and Sam Altman.
A lot of them are Sam Altman saying like is there any way to fix this?
Is there any way to recover?
Who's on the call right now?
Who are you talking to?
Sam Altman kept trying to push to get Satya Nadella, the CEO of Microsoft, on the calls to try to, quote unquote, fix things.
Basically, what happened is Miria and a lot of the other board members had raised some concerns.
I mean, we've seen a lot of exposés about Sam Altman and he has some tendencies to not share everything with the board or not always be truthful with the board.
And from that, it seems like she kind of raised those governance concerns.
But then she was she became the CEO, which she didn't really want to be the CEO.
And then the board wasn't really able to defend this decision of kicking out Sam.
So he came back.
Microsoft the entire time was openly recruiting their staff in the midst of all of this.
So and there was kind of this line between Sam Altman that's like And do they want everyone at OpenAI to leave?
What if, you know, Microsoft acquired OpenAI?
Would that give them the governance that they wanted?
And then, you know, he knew that he was going to be in charge of Microsoft AI.
So then if they weren't able to acquire it, anyways, he was going to be like a competitor.
There was like this whole thing and it seemed like a giant battle at the end of the day.
They brought back Sam and a lot of the people on the board left the board or moved on and started their own companies.
But we get the text messages, which is crazy.
Okay, let's talk about what Microsoft was saying when they were about to put a billion dollars into OpenAI, which kicked off this entire campaign.
AI funding boom that we're seeing today.
Apparently, before they put the billion dollars in, they were worried that opening I was going to quote, storm off to Amazon and go and join AWS.
This is all coming out of, of course, discovery from the Sam Altman versus Elon Musk trial.
Basically, we have Sam Altman, who pitched Satya Nadella on about 300 million of Azure Compute, and that was in the summer of 2027.
And they're like hey, we just want this to fund OpenAI's next research phase and training, our model.
Apparently, the Azure chief, Jason Zander, told Nadella in August of 2017 that the deal needed 500 million or more in incremental revenue if it was going to even pencil out.
And then we have the CTO of Microsoft, Kevin Scott, who's warning Nadella in January of 2018 the next year that OpenAI.
You know they're going to go if we don't pay them enough money or give them enough credits.
They're going to go defect to Amazon and they're going to kind of crap talk Azure on their way out.
So they're like trying to manage the PR.
They're like, hey, look, we don't want them talking bad about us.
So I think in all of these emails, nothing bad, like nothing illegal or wrong was done.
They're talking about it in court, but it seems like very normal due diligence for a big compute commitment from Microsoft's part.
But the big takeaway for me that I think is interesting is that this is completely contrary to this kind of public narrative.
That look, Satya Nadella, he saw this big AI wave coming.
Microsoft was so smart in funding open AI because, you know, they knew what was kind of coming next.
Like, to some degree they saw that there was a lot of potential here, but also they were.
It feels like, hey look, here's a big customer for Azure and let's give them some money so they don't crap talk us and so they can stick around.
Not so much like this thing's going to be worth a trillion dollars one day more, just like hey, they're gonna spend a lot of money and we don't want it to be a bad PR thing.
So a bit of a different narrative than we are used to hearing.
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That's the show for today.
Have a fantastic weekend.
