Hey Snackers,
A campaign is pushing the New York Public Library to return the set of toys that inspired A.A. Milne to write the Winnie-the-Pooh stories to the United Kingdom once and for all. The NYPL owns the actual Pooh, Piglet, Eeyore, Tigger and Kanga, and a cohort of British fans want them returned to commemorate the 100th anniversary. The United Kingdom attempting to get an institution to return an important cultural artifact to its nation of origin? Well, see now I’ve heard everything.
Stocks finished up on Monday, led by tech.
Anthropic vs. three hyperscalers in a trenchcoat
Yesterday we wrote that the week ahead would be investors’ quarterly check-in on the AI trade. We didn’t know how right we’d be: on Monday, Anthropic filed for its IPO.
A couple interesting things pop out that are relevant to companies posting earnings this week, first and foremost the unique arrangement between Anthropic and three cloud service providers (CSPs): Amazon, Alphabet and Microsoft.
Sales through the cloud marketplaces of that trio of companies constituted 48% of Anthropic revenue in H1 of this year, up from 11% in 2023.
That’s a bit of a double-edge sword; the willingness of the CSPs to shill Claude to their customers has been a significant driver of revenue growth for Anthropic over the period. On the other hand, this means that half the revenue from Anthropic’s customers aren’t actually from Anthropic’s customers, they’re from Amazon, Alphabet and Microsoft’s customers, and you can be certain that those three firms would love nothing more than to swoop in with their own models if the situation were to present itself.
But don’t just take our word for it! It’s right there in the prospectus as a risk, “customers may develop their own solutions that compete with our models, platform, and applications.”
It’s complicated, and Anthropic isn’t trying to hide that: “Our relationships with our strategic partners — whether with CSPs, who simultaneously serve as our investors, customers, distribution partners, and competitors, or with Broadcom, which simultaneously serves as a supplier and lessor — create potential conflicts of interest that are difficult to fully anticipate or mitigate.”
Essentially, not only is it complicated, but given how complicated it is we don’t even know how complicated it’s going to end up being.
That hasn’t even touched on the unique ownership structure. As a Public Benefit Corporation, Anthropic has not only the founder supervote that’s become common lately, but also a few other tiers of shareholding with various rights and profit participation:
Class T shares, for “humanity,” controlled by a long-term benefit trust that appoints four directors who are there to ensure that Anthropic advances the common good. Neat?
Class F shares, for the founders, who get the other three board seats.
Class E shares, for employees, which have no economic rights but get to break ties.
Class A shares. This means you! The economic rights, your slice of the pie. You get a vote, but one that will always be outvoted by the founders anyway.
Class N shares, which is Class A stock with no vote, the shares given to Amazon and Google.
The Takeaway
The next two weeks will be an investor roadshow for the company, and the IPO date is expected to target the week before Thanksgiving under the ticker symbol ANT on Nasdaq. Expectations for the company vary between $1.5 trillion and $2 trillion valuation. Compared to the SpaceX prospectus and the kind of language coming out of OpenAI, the document is relatively sober, even if it does contain risk factors like:
“Our most capable models have demonstrated, and future models are expected to demonstrate, capabilities that could provide meaningful assistance to malicious actors seeking to develop chemical, biological, or other dangerous weapons.”
“More broadly, the long-term effects of regular AI interaction on mental health, cognitive development, and social behavior are not yet fully understood, and if such long-term harms do materialize in the future, we could face significant liability, reputational harm, and adverse effects on our business, financial condition, and results of operations.”
“Our proprietary model weights, corporate and financial data, and other core intellectual property represent particularly high-value targets for state-sponsored espionage and theft, and security researchers have identified frontier AI companies as priority targets for non-U.S. intelligence services.”
Will that make investors skittish? We’ll find out in a few weeks!
How 'Lula's Army' WhatsApp chat helped turn Brazil election around
The BBC details how a WhatsApp chat run by a Brazilian Congressman helped Lula mount a historic comeback win in the second round of voting. The chat disseminated ready-made video and text message templates for users to share with friends and relatives, and gave specific assignments to members.
Snacks Shots
📊 Senate Check In: Democrats are now a 65% chance to win the Senate. Democrats must flip four seats and hold all their current ones to take the Senate. Current state-by-state chances of a Dem flip: North Carolina (98%), Alaska (76%), Texas (65%), Maine (59%), Ohio (69%) and Iowa (42%).
*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.
SpaceX closed a deal with Apollo that allows it to borrow $40 billion to fund the purchase of the GPUs that power the company’s AI work, CEO Elon Musk said in a social media post that was later confirmed with a regulator filing.
What else we’re Snackin’
The Financial Times digs into what is known about quant-trading billionaire Peter du Putron, who lives on an island in the English Channel, only gives people he’s meeting with the precise location of their appointment a few minutes beforehand, and whose employees say is “a bit like Lord Voldemort.”
The third largest convenience store in the US – Casey’s – is stepping up its pizza offerings, adding pan pizzas to its already existing range of pizzas. The move comes as gas-stations (where gas prices are high) are trying to lure customers away from restaurant chains (where food prices are high).
Polls consistently show that American voters hate tariffs. Bloomberg News profiled the White House official tasked with changing their minds.
Snack Fact of the Day
Deep in Antarctic waters, on a seabed that was once covered by an ice sheet, the BBC reports that scientists have “discovered sponges, sea spiders, anemones and octopuses – a surprisingly rich ecosystem thriving despite being cut off from sunlight for centuries.” Researchers are also beginning to explore fresh water lakes lodged between ice sheets and continental rock.
Tuesday
Earnings from Robinhood, Seagate, Visa, BigBear AI, and F5 slated for release after the close.