Kind: captions
Language: en
The consensus is in law, Anthropic will
The consensus is in law, Anthropic will
probably win a good slug of this case,
probably win a good slug of this case,
which is different than saying they're
which is different than saying they're
going to win the fight. The idea that
going to win the fight. The idea that
you can just have all this [ __ ] for free
you can just have all this [ __ ] for free
is at some point going to stop cuz
is at some point going to stop cuz
someone's going to have to cover their
someone's going to have to cover their
nut. This week, Anthropic sues the US
nut. This week, Anthropic sues the US
government. Oracle and Open AI end plans
government. Oracle and Open AI end plans
to expand flagship data center. Meta
to expand flagship data center. Meta
moves in to absorb the surplus AI data
moves in to absorb the surplus AI data
center capacity. Crowd Strike. They beat
center capacity. Crowd Strike. They beat
expectations but trade down. And then
expectations but trade down. And then
finally, we have our stock picks. What
finally, we have our stock picks. What
to buy, what to sell, public market
to buy, what to sell, public market
predictions coming up.
predictions coming up.
>> I think getting rid of juniors is where
>> I think getting rid of juniors is where
we get budget for these data centers in
we get budget for these data centers in
part.
>> This goes really cold. You can have
>> This goes really cold. You can have
dispossessed urban poor forever and
dispossessed urban poor forever and
nothing happens. But if you piss off the
nothing happens. But if you piss off the
20some year old middle class, the
20some year old middle class, the
overeducated elites, they tend to cause
overeducated elites, they tend to cause
trouble. The truth is open AI and have
trouble. The truth is open AI and have
the most amount of surface area to
the most amount of surface area to
attack [music] of any company in the
attack [music] of any company in the
world right now.
world right now.
>> The era of gentle deceleration has
>> The era of gentle deceleration has
ended. It's dead. Ready to go.
[music]
Boys, we have a big week of news. As
Boys, we have a big week of news. As
always, we're going to start with this
always, we're going to start with this
week in anthropic. So, we have gone from
week in anthropic. So, we have gone from
couple of hundred million dollars in
couple of hundred million dollars in
lost contracts with the Pentagon and
lost contracts with the Pentagon and
with the DoD to potentially billions of
with the DoD to potentially billions of
dollars at risk. If we start here and
dollars at risk. If we start here and
the billions of dollars at risk, how did
the billions of dollars at risk, how did
you analyze that? And maybe Rory, the
you analyze that? And maybe Rory, the
wonderful context giver, if you want to
wonderful context giver, if you want to
provide some context.
provide some context.
>> Yeah, I I will. I think that Antropic
>> Yeah, I I will. I think that Antropic
in my view correctly sued the federal
in my view correctly sued the federal
government in both California and
government in both California and
subsequently in DC just for procedural
subsequently in DC just for procedural
reasons. Basically saying that the
reasons. Basically saying that the
government's designation of them as a
government's designation of them as a
supply chain risk was incorrect. badly
supply chain risk was incorrect. badly
done and you know didn't would not
done and you know didn't would not
should not legally stand up and the
should not legally stand up and the
reason they're suing immediately versus
reason they're suing immediately versus
talking is they're stating that quite a
talking is they're stating that quite a
lot of revenue could be at risk for them
lot of revenue could be at risk for them
because the department of war and the
because the department of war and the
government I think I should said that
government I think I should said that
the administration has articulated a
the administration has articulated a
very aggressive definition of supply
very aggressive definition of supply
chain risk. If you recollect last week I
chain risk. If you recollect last week I
was not entirely pro the entropic
was not entirely pro the entropic
position and I stand by that but I think
position and I stand by that but I think
the government is now overreaching as
the government is now overreaching as
well. So, like all good disasters, both
well. So, like all good disasters, both
sides are doing things wrong. But it's
sides are doing things wrong. But it's
totally rational for the government to
totally rational for the government to
say, "You want $200 million of revenue
say, "You want $200 million of revenue
from us and you want to get in our
from us and you want to get in our
shorts and tell us what to do and we're
shorts and tell us what to do and we're
the Department of War and we ain't going
the Department of War and we ain't going
to do that. So, you're not getting your
to do that. So, you're not getting your
200 million." That's totally fair. But
200 million." That's totally fair. But
designating a supply chain risk has a
designating a supply chain risk has a
series of escalating consequences. At a
series of escalating consequences. At a
minimum, it implies no one can use them.
minimum, it implies no one can use them.
No one can use them selling. No other
No one can use them selling. No other
company selling to the Department of War
company selling to the Department of War
can use them for those contracts
can use them for those contracts
which is one step more. But again, I see
which is one step more. But again, I see
how the Department of Defense might get
how the Department of Defense might get
to that place. But then you're seeing
to that place. But then you're seeing
the government articulate these really
the government articulate these really
expansive definition can ask which is
expansive definition can ask which is
throw them out entirely of every
throw them out entirely of every
government contract which seems an
government contract which seems an
overreach and then even more overreach
overreach and then even more overreach
and it's actually not happening because
and it's actually not happening because
the various cloud providers have pushed
the various cloud providers have pushed
back in it. There was one version that
back in it. There was one version that
said if you use Antropic at all
said if you use Antropic at all
Microsoft or Amazon then we won't use
Microsoft or Amazon then we won't use
you at all in the US government and
you at all in the US government and
that's an element of frankly almost
that's an element of frankly almost
ludicrous overreach. So what's happening
ludicrous overreach. So what's happening
here is
here is
basically Entropic and Department of War
basically Entropic and Department of War
are trying to figure out, you know,
are trying to figure out, you know,
where in the spat how big is the blast
where in the spat how big is the blast
radius of consequences from this $200
radius of consequences from this $200
million contract. And my perspective it
million contract. And my perspective it
get there should be consequences, but
get there should be consequences, but
having it be this big a blast radius
having it be this big a blast radius
doesn't really stand up. And I think the
doesn't really stand up. And I think the
consensus is in law, Anthropic will
consensus is in law, Anthropic will
probably win a good slug of this case,
probably win a good slug of this case,
which is different than saying and
which is different than saying and
they're going to win the fight.
they're going to win the fight.
>> Well, look, I mean there's there's
>> Well, look, I mean there's there's
something to me that's minorly
something to me that's minorly
interesting. Um, and then more
interesting. Um, and then more
interesting. The minorly interesting
interesting. The minorly interesting
thing is how hard the hammer came down.
thing is how hard the hammer came down.
I mean, they they're going to lose like
I mean, they they're going to lose like
the the the the like it it's like
the the the the like it it's like
tariffs. Even if for some reason um
tariffs. Even if for some reason um
anthropic wins their case, they'll just
anthropic wins their case, they'll just
the the the DoD will just come the
the the the DoD will just come the
Department of War will just come back
Department of War will just come back
with another issue just like tariffs.
with another issue just like tariffs.
They'll find another justification
They'll find another justification
to block anthropic or even at a a
to block anthropic or even at a a
minimum I think the real panic I I think
minimum I think the real panic I I think
maybe what they didn't realize at at and
maybe what they didn't realize at at and
then I'll talk about to me what's more
then I'll talk about to me what's more
interesting, but I think what they
interesting, but I think what they
didn't realize is what a blocker it
didn't realize is what a blocker it
would be with their customers. it. This
would be with their customers. it. This
is just a classic B2B sales issue. Uh
is just a classic B2B sales issue. Uh
you know, you walk into these big deals
you know, you walk into these big deals
and they said it in the complaint and
and they said it in the complaint and
we're struggling
we're struggling
to close deals because prospects are
to close deals because prospects are
worried that just some of their business
worried that just some of their business
has exposure to the federal government
has exposure to the federal government
and the department of war. And then
and the department of war. And then
their competition open XI said we don't
their competition open XI said we don't
have these problems and you and they may
have these problems and you and they may
steal the deal. Like they literally said
steal the deal. Like they literally said
in the in the complaint, this is issue
in the in the complaint, this is issue
and this is classic B2B stress. Like you
and this is classic B2B stress. Like you
don't it only has to be the risk only
don't it only has to be the risk only
has to be ambiguous in a B2B deal for
has to be ambiguous in a B2B deal for
you to lose and go with another leader.
you to lose and go with another leader.
It just has to be it's a little bit less
It just has to be it's a little bit less
secure or they went down for two days or
secure or they went down for two days or
the the database was left open. And so
the the database was left open. And so
there was a classic B2B panic and I
there was a classic B2B panic and I
don't want to get into politics but I I
don't want to get into politics but I I
honestly don't I mean the the government
honestly don't I mean the the government
is saying listen we need you for war and
is saying listen we need you for war and
in fact it's more than that. The
in fact it's more than that. The
government is saying we used Palunteer
government is saying we used Palunteer
without anthropics knowledge to conduct
without anthropics knowledge to conduct
a war in Venezuela and depose a
a war in Venezuela and depose a
government. We did that without
government. We did that without
anthropics knowledge. So it it happened.
anthropics knowledge. So it it happened.
But the government's going to say,
But the government's going to say,
"You're either going to agree to this or
"You're either going to agree to this or
we're going to freeze you out of the US
we're going to freeze you out of the US
economy." And it doesn't matter what a
economy." And it doesn't matter what a
court says because they'll come up with
court says because they'll come up with
another justification. There'll be
another justification. There'll be
another one. There'll be a a a different
another one. There'll be a a a different
type of supply chain risk. There'll be
type of supply chain risk. There'll be
it'll be it'll be endless until they
it'll be it'll be endless until they
bend to the will, I think.
bend to the will, I think.
>> Yeah. But you may be right in terms of
>> Yeah. But you may be right in terms of
what they the government will do. But I
what they the government will do. But I
just, as I say, having been critical
just, as I say, having been critical
last week, I want to say it's wrong
last week, I want to say it's wrong
to try and drive a widely successful
to try and drive a widely successful
American tech company out of a good slug
American tech company out of a good slug
of the economy simply because they don't
of the economy simply because they don't
want to serve this one particular need.
want to serve this one particular need.
And it's interesting if you read the
And it's interesting if you read the
complaint, a lot of what Tropic is
complaint, a lot of what Tropic is
talking about is literally their first
talking about is literally their first
amendment rights. This is not a
amendment rights. This is not a
contract. What they're basically saying
contract. What they're basically saying
is we on Tropic articulated our less
is we on Tropic articulated our less
than love for some of the things that
than love for some of the things that
the Department of War might use this
the Department of War might use this
technology for and you're trying to ruin
technology for and you're trying to ruin
our business simply because we use those
our business simply because we use those
words and that's our first amendment
words and that's our first amendment
right and that's unamerican. And so
right and that's unamerican. And so
while I think you are entirely correct,
while I think you are entirely correct,
it's a really tough position for
it's a really tough position for
entropic to be in. And I as I said many
entropic to be in. And I as I said many
I don't know if they should depict this
I don't know if they should depict this
fight. I also think it's particularly
fight. I also think it's particularly
unfair of the US government to try and
unfair of the US government to try and
be this sweeping in their actions
be this sweeping in their actions
against what is one of the great
against what is one of the great
American success stories. If AI really
American success stories. If AI really
is all about the leading edge of the
is all about the leading edge of the
economy, right, it's probably a mistake
economy, right, it's probably a mistake
to pound the crap out of one of the two
to pound the crap out of one of the two
leading companies in that space simply
leading companies in that space simply
because at the margin you find them
because at the margin you find them
slightly sanctimonious, which many
slightly sanctimonious, which many
people do, and you don't like their
people do, and you don't like their
politics. you don't have to buy from
politics. you don't have to buy from
them and you know put your $200 million
them and you know put your $200 million
in in another place maybe don't let them
in in another place maybe don't let them
into department war at all but stop
into department war at all but stop
trying to cut them off at the knees
trying to cut them off at the knees
across the entire B2B infrastructure I
across the entire B2B infrastructure I
think it's a little bit of an overreach
think it's a little bit of an overreach
but I think you're right Jason me
but I think you're right Jason me
thinking that is very different than
thinking that is very different than
them changing their mind there's a style
them changing their mind there's a style
in the administration that's prone to
in the administration that's prone to
overreach and I'm sure Antropic deeply
overreach and I'm sure Antropic deeply
regrets getting down in the mud pit
regrets getting down in the mud pit
wrestling with this particular opponent
wrestling with this particular opponent
cuz it sucks.
cuz it sucks.
>> What actually happens here like
>> What actually happens here like
realistically years time does one cow
realistically years time does one cow
and give up play out the realities for
and give up play out the realities for
me?
>> I think the interesting thing I I I
>> I think the interesting thing I I I
think on the merits of the lawsuit that
think on the merits of the lawsuit that
I think Antropic will probably prevail
I think Antropic will probably prevail
and may even prevail quickly on some of
and may even prevail quickly on some of
the you know I think if I read the
the you know I think if I read the
lawsuit last I think they've actually
lawsuit last I think they've actually
moved for immediate redress. I think,
moved for immediate redress. I think,
you know, to basically get it reversed.
you know, to basically get it reversed.
I think they might prevail on some of
I think they might prevail on some of
the things. If I was to be logical just
the things. If I was to be logical just
based on prior I they might prevail on
based on prior I they might prevail on
some of the law. They won't clearly get
some of the law. They won't clearly get
a $200 million revenue deal with the US
a $200 million revenue deal with the US
Department of War. But in a perfect
Department of War. But in a perfect
world, if they bend the knee, prevail on
world, if they bend the knee, prevail on
the law, what we've seen in multiple
the law, what we've seen in multiple
other situations is you end up with some
other situations is you end up with some
kind of, you know, acquiescence to the
kind of, you know, acquiescence to the
administration in return for leave us
administration in return for leave us
alone to pursue the rest of our daily
alone to pursue the rest of our daily
business, our B2B business. We're not
business, our B2B business. We're not
going to say, the administration is not
going to say, the administration is not
going to be saying to Microsoft, hey, if
going to be saying to Microsoft, hey, if
you use Entropic anywhere, you don't get
you use Entropic anywhere, you don't get
any government business, which is the
any government business, which is the
most overreaching version of this. And
most overreaching version of this. And
in return for that entropic, we'll
in return for that entropic, we'll
probably have to bend the knee and be
probably have to bend the knee and be
slightly supplicant. That's my gut.
slightly supplicant. That's my gut.
They'll win the law just like many of
They'll win the law just like many of
the other institutions have won some of
the other institutions have won some of