Very few podcasts will actually make you smarter AND make you laugh. No politics, no egos, just tech. The biggest news this week: - Anthropic Files S1 Ahead of $2TRN IPO - Instinct's Rumoured $30BN Fundraise - Microsoft Lays off 27,000 While Meta Taps Equity Markets for $95BN Capex Spending Spree My notes with @jasonlk and @rodriscoll 1. Analysis of Anthropic S1 Anthropic's S1 beat expectations on margins and operating income, even after stock-based compensation, leaving the burden of proof on the naysayers. It also looked strong on customer concentration, compute efficiency and cash. Some questions remain, including the undisclosed Q3 revenue number. 2. Is the Value Extraction Requirement From the Latest Models a Benefit or a Curse of Anthropic? Eighty percent of Anthropic's revenue comes from models less than six months old, and 70 to 80% of compute costs go to training. Models are expensive to build and highly profitable to serve, but only for six to twelve months. Few companies can write a $10 to 12BN compute check, so this short shelf life can favour Anthropic if it stays aggressive. 3. Brutal Reality Is Microsoft Have Just Admitted They Don't Want 27% of Their Workforce Whatever gets said on LinkedIn, Microsoft's move says it does not want 27% of its people. That is a worse scarlet letter than a pure layoff, because the company has told these employees they do not meet its minimum bar. 4. Chinese Open-Source Models Have Peaked and Will Decline From Here Chinese open-weight models are close to finished in the US, and this is the beginning of the end for them. Despite DeepSeek's latest raise, it is starting to be banned across all federal agencies. 5. Why No CIO Will Take a Chance on a Chinese Model Even if confidential data reaches Alibaba servers in Asia only one time in 100,000, without consent, no CIO or CISO will approve the model. If it keeps happening and Alibaba stays silent, anyone using these models will lose their job. 6. Why OpenAI Is an Underappreciated Asset to Invest in Today OpenAI is mispriced at the $1.25 TN round. Brief market panic has created a dislocation like Anthropic's round at around $183BN, even though OpenAI has closed all its competitive gaps. 7. What Is the Upside of OpenAI at $1.25 Trillion? OpenAI and Anthropic are both expected to become $10 to 20TN companies. Anthropic takes only 0.1% of Fortune 500 budgets today, and even conservative estimates put that at 2 to 3%. Because OpenAI is not priced to perfection, the worst case is doubling the money. (links in comments)