I'm surprised I don't see a thread about their IPO yet. Their S1 came out last week, and it's better than I thought it would be, but it still leaves a lot of questions, IMO. One big one is their Q3 numbers, as many people are speculating that their revenue growth stalled out after token maxing ended and companies started looking for ways to reduce their AI spend.

We don't know the IPO price yet, but I suspect we'll have the typical IPO pop as soon as it goes live, before it drops down back. Basically, following a similar curve as SPCX. Long term (like 5 years out), I just don't see how they can make their revenue commitments. I do see a big value in AI, especially for coding and agents, but the open models can do what most people need, which will make it hard to justify all the spend. They should be able to raise enough capital, plus their current cash, to keep things going for at least 5 years, but after that I have big concerns with the company, unless they figure out how to dramatically cut their costs (or can somehow get regulations to block competition).

Also, I think all the ridiculous warnings in the S1 about the harms of AI could come back to haunt them. If there is a major security breach, and they get sued, they won't really be able to blame it on the user as they've basically said their own products are likely to cause this stuff.

I'd argue it's the opposite on the risk factors. That language is there to protect them.

Every company has to list what could go wrong before it sells stock. Drug companies say the pills might hurt you, airlines admit planes crash, banks say they might get hacked, and so on. The whole point is that if you warned people and it happens anyway, they can't claim you hid it.

And customers who get hurt wouldn't be suing over the S-1 anyway. They'd sue over their contract, and every software contract already says you're responsible for how you use the thing.

If anything, the unusually detailed warnings tell me their lawyers are trying very hard to make sure nobody can say investors weren't warned.

I guess I wasn't meaning investors suing, I was meaning the victim of something like a cyber security attack (who has no contact with Anthropic). Take the recent Hugging Face attack. OpenAI was able to say, "We didn't know our models could do that." Anthropic won't be able to say that if one of their models breaks out and hacks someone, because they say they know their models can do that. They will have to explain why, despite knowing it was a possibility, they didn't put more guard rails into it. The same if someone uses their models to help generate some sort of weapon that is used in an attack. They specifically called that out as a possibility, so if that happens, the victims will be able to sue saying that Anthropic knew that could happen, yet continued on.

I see what you're saying. I still think if they can show they saw the risks coming and were taking steps to deal with them, that's a pretty good CYA, even if those steps didn't hold up. The test is usually whether you took reasonable care, not whether it worked.

AustinAg2K said:

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I'm surprised I don't see a thread about their IPO yet. Their S1 came out last week, and it's better than I thought it would be, but it still leaves a lot of questions, IMO. One big one is their Q3 numbers, as many people are speculating that their revenue growth stalled out after token maxing ended and companies started looking for ways to reduce their AI spend.

We don't know the IPO price yet, but I suspect we'll have the typical IPO pop as soon as it goes live, before it drops down back. Basically, following a similar curve as SPCX. Long term (like 5 years out), I just don't see how they can make their revenue commitments. I do see a big value in AI, especially for coding and agents, but the open models can do what most people need, which will make it hard to justify all the spend. They should be able to raise enough capital, plus their current cash, to keep things going for at least 5 years, but after that I have big concerns with the company, unless they figure out how to dramatically cut their costs (or can somehow get regulations to block competition).

Also, I think all the ridiculous warnings in the S1 about the harms of AI could come back to haunt them. If there is a major security breach, and they get sued, they won't really be able to blame it on the user as they've basically said their own products are likely to cause this stuff.

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This is why Alex Karp thinks the government is ultimately going to take this over. The liability is too great. They've arguably already lost control of it.

I'm no way saying that the government will somehow do a better job of this but the government can absorb liability that the private industry can't.

I'm staying away from it as an individual investment until we know what's going to happen although I assume I will end up with some in a fund, regardless.