The two most interesting risks to Anthropic
You're reading a newsletter from The Indicator from Planet Money.
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You → read → Money
Once a week, we curate our favorite stories and insights on business, finance, economics and why they matter.
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they → curate → economics
A TILE GAME is giving a boost to Chinese factories.
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GAME → give → factories
Our very own Jennifer Pak reported that Chinese manufacturers have not had the easiest few years with U.S. tariffs and the war in Iran pushing up costs.
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tariffs → report → costs
Well, the aged game of Mahjong is giving them a surprising boost.
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Mahjong → give → boost
That's because it's having a moment in the U.S. and some entrepreneurial citizens in China are enjoying the benefits.
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citizens → have → benefits
Mahjong sets can sell for like $300-$400 in the States … and want to know how much they cost to make?
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they → sell → much
One businessman said he used to make the game primarily for Chinese consumers.
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he → say → consumers
Now, every set is exported to the U.S.
Coming up:
- The risks to Anthropic's (and AI's) business
- Why we're saying 'buyout' and not 'layoff'
- How young people are doing with AI summaries
New's We're Watching
The two most interesting risks to Anthropic - U.S. Securities & Exchange Commission
What to Know: Anthropic gave the world 94 pages of risks to its business (slash the entire AI economy) in its IPO prospectus aka the S-1.
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Anthropic → export → prospectus
It wouldn't be Anthropic if they didn't discuss the "existential risks" to humanity and society several times.
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they → discuss → humanity
And isn't that an important risk to disclose?
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that → disclose → ?
Another that stood out: the AI boom has a glaring point of failure.
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boom → stand → failure
The majority of advanced semiconductor manufacturing is concentrated in one place, Taiwan, and if anything were to happen there, it could disrupt the entire AI economy.
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it → concentrate → economy
But I want to focus on a different risk, because it is FASCINATING!
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it → want → risk
Committing to the past at a premium: Anthropic is worried about aging out of the tech that's powering its AI, while paying the same prices.
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that → commit → prices
What does that mean?!
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that → mean → What
AI companies have to lock into pricey contracts for all sorts of softwares, hardware, data center, and squadrons of GPUs.
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companies → have → GPUs
But technology is advancing quickly right now.
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technology → advance → ?
New GPUs, for example, could come along that can do the same amount of work for way less money.
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that → come → money
Then Anthropic is stuck like CHUMPS in a contract paying a premium for old hardware, while some competitors may be doing more for less.
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competitors → stick → less
Microsoft offered buyouts to 60,000 employees, roughly a quarter of its staff this week.
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Microsoft → offer → staff
And doesn't that sound better than "Microsoft laid off 60,000 employees this week"??
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Microsoft → sound → employees
Skydance ALSO offered a buyout to employees on Monday, though it's not clear how many would be eligible.
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many → offer → Monday
So what's the real difference in offering a buyout versus just laying off staffers?
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difference → offer → staffers
There's something about a "mega-layoff" that doesn't inspire worker confidence.
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that → be → confidence
Ok, I guess.
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I → guess → ?
The WSJ reported the focus in C-suite land is on the ratio of employees to AI agents inside companies.
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focus → report → companies
Companies have to find ways to pay for the ever-increasing costs of AI … and you know … actual human workers expect to be paid.
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workers → have → AI
Andy Challenger, Chief Revenue Officer of Challenger, Gray & Christmas, a consulting firm, told the Journal that it can help staffers emotionally by making it a little easier to let go.
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it → consult → staffers
It also tends to motivate older staffers to retire a little bit early, which may be the company's goal.
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which → tend → staffers
Here's what that means
If you HAVEN'T listened: I never thought I'd yearn for the days when the internet felt wholesome.
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internet → mean → days
Where you could go to blogs and random sites and make friends across the world.
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you → go → world
Well, more than half of internet traffic now comes from non-humans, aka bots.
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half → come → humans
They're pouring into the digital veins of the World Wide Web, ignoring a lot of ads, generating all kinds of comments, nonsense and what have you.
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you → pour → what
One interesting takeaway: this shift from human-to-bot traffic changes the business model of the internet.
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shift → change → internet
If humans let bots do their shopping for them, then ads suddenly become less useful.
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ads → let → them
And if ads don't pay out for websites, then who pays for them?
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who → pay → them
If you HAVE listened: Writer and researcher Erin Kissane says she believes Dead Internet Theory came out of a human impulse to "create speculative fiction versions" of real-life societal change that scares us.
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that → listen → us
As a reminder, Dead Internet Theory is the idea that the internet becomes just bots talking to other bots.
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internet → become → bots
They're pouring into the digital veins of the World Wide Web, ignoring a lot of ads, generating all kinds of comments, nonsense and what have you.
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you → pour → what
…and 22 more, not listed.
The Aporia
