00:00Enthropic started off the year at a $9 billion run rate.
00:04They put out a press release yesterday that they are at a $47 billion run rate.
00:09In a span of five months, the revenue ARR has grown 500%.
00:16So I think that says it all in terms of what's justifying this enthusiasm.
00:22Now, are all of them long-term winners?
00:25I would bet no.
00:26But right now, market is rewarding AI narratives.
00:31And we saw that with Dell last night.
00:34Any company that has an AI story is getting bid up.
00:37And obviously, you have to show it in the numbers, in the guidance, in the acceleration.
00:43But the CapEx numbers are going up because of this 5x increase in Enthropic's ARR.
00:50And so right now, there is a frenzy in terms of building the AI infrastructure
00:54because there is clear monetization that Enthropic is showing in their revenue numbers.
00:59Okay, let's be clear.
01:00Enthropic is private.
01:01And this fundraising round keeps them private.
01:04But everyone's anticipating that at some point, they will go public.
01:07Do they need to go public?
01:09Because they've held on this long and they haven't had to go public.
01:13Do they want to go public?
01:14I think so.
01:15They're investors, clearly the ones who financed this $65 billion round and the earlier ones.
01:24You know, when you talk about a company close to a trillion dollar market cap in the private market,
01:30I mean, I go back to Uber's, you know, IPO.
01:33Uber wasn't as big as Enthropic and OpenAI are.
01:36But, you know, they obviously had a lot of growth behind them when they went public.
01:43The company wasn't profitable.
01:45And, you know, there was a lot of concern about the cash burn.
01:49I feel something similar may happen here, even though these companies are growing very fast.
01:54And clearly, you know, they are part of this big technology shift that is underway.
02:01But at some point, I think people will start to focus on their profitability.
02:06And that's where, you know, this business model being so capital intensive,
02:11unlike the software companies that, you know, we've seen in the past,
02:16I think the concern around profitability will surface.
02:19But for now, everyone is focused on the top line growth and, you know,
02:22the ARR kind of increases that we are seeing with all of them, really.
02:28Because CodingAgent, as a use case, is huge.
02:32And it is a big addressable market.
02:34And everyone wants to cater to that.
02:36Is having access to computing power becoming the biggest competitive advantage
02:40when it comes to building out AI?
02:42Well, that's what Jensen Wong says.
02:45Computers revenue, I'm paraphrasing him.
02:48And I think right now that is the case.
02:50Look at what SpaceX is doing with XAI data centers.
02:54They were training their own model.
02:58Now with their S1 filing, they're saying they will be renting that compute to, guess who?
03:04Anthropic.
03:05And they will generate 15 billion revenue per year out of just renting the compute
03:11because they build the data centers that no one else has.
03:15They have the compute.
03:16And even though they are behind when it comes to training their own models,
03:20but they can rent it out the compute in the meantime and generate 15 billion dollars in revenue out of
03:25that.
03:25Alex mentioned it earlier that Anthropic raising at a $965 billion valuation makes it bigger than OpenAI.
03:33It feels like this is OpenAI's race to lose at this point.
03:37I mean, clearly, I think they are under a lot of pressure.
03:41And in terms of who files for going public first, my guess is OpenAI would want to do it first
03:50because they want to own the narrative as opposed to Anthropic going first
03:55and everyone realizing, you know, obviously Anthropic is growing faster than OpenAI right now.
04:03And if they take all the liquidity away, then OpenAI coming in later will struggle, you know,
04:10in terms of just making sure that they have investors excited about investing in OpenAI.
04:15And Mandeep, one more question for you.
04:17Apollo is reportedly helping finance AI chip purchases.
04:21What does that tell us about how capital intensive this race has become?
04:25Well, so for all the neoclouds, whether it's CoreWeave, Nebius, outside of the hyperscalers,
04:31whoever is renting the GPUs, they don't have the balance sheet to buy, you know, these expensive chips or servers.
04:40And so in those type of instances, that's where the PE guys like Apollo, Blackstone, they come in
04:47and they're helping finance those deals because, you know, there are a lot of neoclouds that are growing very fast.
04:55And for them to sustain this kind of growth rate, they have to keep building the infrastructure,
05:01keep getting the chips, and these are getting financed by the likes of Apollo.
05:05So,
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