Because of its investment, FTX owns shares in Anthropic. In bankruptcy, those shares will be sold in some form to new investors in exchange for cash, at whatever the current value is. Just like any other asset.
In theory, I suppose that new investor could be Anthropic itself doing a stock buyback, but that would be extremely unusual. Buybacks are for mature companies with excess cash, not growing startups.
Let's say for sake of argument the investment by FTX was made at a valuation of $1B and Anthropic is now worth $10B.
Could Anthropic now say, "Oh no, that money was stolen, the investment was never valid, we're returning every last cent." and essentially do a huge share buyback at a steep discount to current valuation?
I guess that's not how corporate liquidation work.
A liquidator will evaluate the assets current market value and try to liquidate them in the most advantageous way for creditors.
Which means: they'll try to get at least the valuation that Anthropic got from the AWS deal. The problem is: they need to find someone willing to buy these shares at this price. If they do so, FTX creditors will be happy.
As a very crude analogy, if someone got access to my brokerage account and used to money in that to buy a Ferrari and got caught, do I get my money back or get the Ferrari (and presumably have to sell it)?
Bankruptcy court can do clawbacks, I'm curious how that could apply for an investment scenario though.. it's not exactly paying a creditor or buying a Porsche just before a bankruptcy...
Regardless of what's legally possible, it doesn't seem like an option that new FTX management would want to exercise, since they're trying to maximize the value of remaining assets for creditors.
Clawbacks would make sense for a charitable donation or shares that have gone down in value. For an investment that's increasing in value, it makes more sense to sell it at market.
Funny that FTX customers might end up having a non-trivial amount of cents on the dollar added to their claims by a lucky investment out of the many shotgunned by SBF and crew.
Could be made whole even? Hasn’t majority of the 8b lost by FTX been recovered by now - maybe this is enough to fill the remaining gap (on some timeframe)
Probably a little ambitious. Claims trading is currently priced at ~35c on the dollar[0], which isn't great but certainly better than what claims were trading at to begin with (~10c on the dollar).
Google invested 1B to Lyft, but Lyft used AWS for cloud compute. (I left Lyft in 2021, could be different now)
Investment department and cloud compute departments are very different entities and if the investment to Antropic was not a part of the Google cloud expansion strategy moving to a new cloud is such a pain, that noone will do it.
Opposite example is Kaggle. Google bought it as a marketing tool for Google Cloud => all the years since acquisition Kaggle team worked on adding differnt Google Cloud features to the platform
>Question: why isn’t Anthropic using Google Cloud, given who their past investors include?
They also have a fiduciary duty to their other investors, and going all-in on Google cloud would be a pretty big risk (relative to other cloud providers) given the uncertainty about whether it'll still exist in 5-10 years.
To you and me, that's a lot of money, for Google's size that's really not a lot of money. The fact that it just became profitable certainly helps the beancounters decide to keep it around though.
Being in Silicon Valley has warped my sense of money so much.
When I read $300m, what I read is "when you factor in office costs & health care as well as salary/stock grants, an average FAANG software engineer must be ~$1m. That's only 300 employees!"
It's a crazy way to think. Suddenly all prices that end with `m` and not `b` seem pointless.
Google includes the income from paid Gmail accounts in their cloud revenue. From all accounts, that is all of the profit and in fact it generates more profit that offsets the cloud losses.
I think that's true and Google cloud as such is unlikely to completely vanish (it may or may not morph significantly and any given service or price isn't necessarily safe)
Still, for proper context, google reader may be small but google stadia was big by any scale, with significant datacentre investment, dedicated consumer hardware, exclusive publishing deals, marketing campaigns, etc. And 10 years isn't as long as it used to be in the IT world :)
Stadia existed for a total of 3 years. And downsized significantly after only two.
Google cloud (it's earliest form anyway) launched in 2008. It's older than Drive and Photos. In a year or two, there will be Google employees younger than Cloud is.
I've seen 18 years old full times (some that never went to college). I wouldn't be surprised to see a 17 year old intern or full time if they graduated college early.
For context, there are 5 people and 1 bot betting, and it's not real cash or even something with a cash equivalent, and the bet amounts are less than what you get for free on sign up -- not exactly what I'd call a "market". And the bet is that they'll close Google Cloud in 2 years, not 5-10 years as is being discussed.
It's plausible that FTX customers will be made whole from the Anthropic investment profits in addition to the $7bn or so recovered so far...that'll be wild!
(Just speculating) They'll probably out SBF and Ellison through legal financial means at one point. Looks like a heavy burden to carry from this point on.
If they don't, Eric Schmidt - SBF family connection will start to look suspicious.
It doesn't look like SBF owns the stake, rather FTX does. Creditors seemed to have gotten lucky that that the bankruptcy handlers aborted the sale of their stake a few months ago[0].
Google VC doesn't push Google products in an effort of remaining neutral and getting access to the best deals. It's a strategic mis-step for Google the company, but a win for Google the VC arm. Also shows Google's internal dis-organization.
Not good for a company to receive funds from investors that we now know stole and grifted from their customers.
Wonder if this company is all just smoke and mirrors at this point. Never heard of this company prior to the Amazon investment.
Kind of reminds me of the Amazon and Rivian partnership. This nobody EV company gets an investment from Amazon, interest/hype boosts potential revenue/preorders. Valuations spike to billions. IPO debuts at ~$120/share. Insiders sell shares. Hype wears off. Now it’s trading at ~$21/share.
I’m no fan of the people you’re talking about myself.
But once we start going down that road we run smack on into companies with like the sovereign wealth fund in Riyadh or (to my embarrassment) Thiel or any number of people who make SBF look like the clueless, entitled, amoral but ultimately strictly small-change knucklehead he is.
There are some truly scary people invested in important companies. Do we hold all the founders to account for that or none of them? It’s not fair to pick and choose.
Yeah, we should totally put our trust in founders who would gladly accept money from immoral sources.
We need to understand that society only values who moves first. The early bird gets the worm. If they want to play the game, they need to raise funds from people who truly understand power and money, regardless of the human cost.
>Yeah, we should totally put our trust in founders who would gladly accept money from immoral sources.
You shouldn't put your trust in founders period. Or companies. Or famous people. Or anyone that you don't actually know. They're people or run by people with goals that greatly differ from your personal goals.
What you're asking is that they put on a veneer of morality and then once you're really convinced they're on your side they'll stab you in the back. Like with the old poster child Google.
And if I had told anyone five years ago that there would be eyeball scanners building a privately-held biometrics database at a level recently considered extreme for violent criminals? What letter anon would that have sounded like? I would have been like easy there mom, no one is doing that.
Are we allowed to talk about Loopt and Greenpoint and OpenAI and Autodesk and Siebel taking a year in Thailand while Socialcam flew into the side of a mountain on HN?
The broader point is that I think a lot of successful tech figures get a pretty unfair rap on HN. Few if any of these folks are stirring candidates for the Nobel Peace Prize, but Bezos or Mark or Elon or even Gates being uniquely bad?
Altman, with the full weight and backing of YC in its prime and a clear first-mover advantage got bailed out of the Loopt debacle [1] in a deal with Green Dot that maybe scraped above the “fire sale” line and is trivially the most celebrated person in the program to not merit an “I made something people want” shirt. pg helped, Conway helped, they got it sort of cashed out in a way that didn’t exactly fuck anyone sideways (other than Green Dot). He proceeded to fail upwards through preferential access to pre-IPO AirBnB shares and shit, became the leader of YC, and is now busily turning the world into Blade Runner 2023.
Seibel was running Socialcam at a time when anyone working at or near FB knew it was a ranking glitch, pawned it off on Autodesk for 60MM [2] saying with a straight face it was the next YouTube, and promptly started inconsistently replying to emails titled “Where the fuck are you?”. Also ran YC.
Are these guys uniquely bad? Debatable, this is how the game is played apparently. But it would be nice to enjoy your ill-gotten gains without a relentlessly resourceful [3] PR campaign about how we’re dealing with some real humanitarian visionaries.
All I’m proposing is that if we trash Elon, then Altman doesn’t get a free ride.
n.b. A lot of that is me claiming things (that I heard from people in the room) that are merely alluded to in primary and secondary sources, so it’ll be up to you to judge if it has what they call “the ring of truth”.
As someone who had been rabidly following developments in the space until earlier this year: I’ve fallen a bit behind.
I’be been walking around with the (seemingly misguided) view that the bigger LLaMA 2 models were sort of neck and neck with like 3.5-turbo, Claude, and the rest of the first string modulo GPT-4 that had a pretty steady if eroding lead.
What’s the lay of the land in 9/23? Or better yet, what do I need to bookmark to get the inside baseball?
This should not have stopped any of FAANGs from competing (especially Google), and yet they are still far behind OpenAI - more than a year after GPT-4 was trained.
- Eric Schmidt (former Google CEO/Chairman), Series A
- Sam Bankman-Fried (FTX), lead investor in Series B
- Caroline Ellison (FTX), Series B
- Google, Series C
https://www.crunchbase.com/organization/anthropic/company_fi...
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Question: why isn’t Anthropic using Google Cloud, given who their past investors include?