Introduction to the AI Power Grab
The AI landscape is undergoing significant changes, with Anthropic, OpenAI, and the B2B software transition being at the forefront. Recently, Anthropic picked a fight with the Pentagon and lost, at least for the moment. Meanwhile, OpenAI closed a $110 billion private funding round, four times the size of the largest IPO in history.
Anthropic vs. The Pentagon: A Three-Way Disagreement
Anthropic had a $200M contract with the Department of Defense, but negotiations broke down over two clauses Anthropic wanted to impose: no mass surveillance and no autonomous weapons. The Pentagon’s counter was that they want to do anything that’s legal, leading to a significant gap that didn’t close.
Rory’s Take on the Situation
Rory believes Dario was right to walk away from the deal but naive to have entered it in the first place. Anthropic’s entire organizing principle is built around being trusted with AI, which is what has kept all seven founders together.
Jason’s Take on the Situation
Jason thinks Dario had no choice but to walk away, as his team would have quit if he had accepted the Pentagon’s terms. The real reason Dario walked away was not just personal principle, but also because he couldn’t face his team and say they would make autonomous weapons safer.
OpenAI’s $110B Round: The Structure Matters
OpenAI closed a $110 billion private funding round, with Amazon committing $50B, of which only $15B is upfront. The remaining $35B will come in upon IPO or AGI. This structure is interesting, as Amazon’s own free cash flow has collapsed, meaning they cannot fund their full commitment even if they wanted to.
Harry’s Read on the Situation
Harry believes the next round for OpenAI, Anthropic, and SpaceX will be public offerings, as the private capital pool is essentially exhausted. He’s calling OpenAI at $1.5T by October.
The B2B Apocalypse: We Got the Mechanism Wrong
Jason came in with a strong view that almost every public B2B software company is going to miss numbers for the rest of the year, and it’s worse than it looks. Rory pushed back, not on the conclusion, but on the mechanism, which is what matters.
