Complex Systems with Patrick McKenzie (patio11)

Patrick McKenzie (patio11) is joined by returning guest Zvi Mowshowitz, AI watcher extraordinaire, to read Anthropic’s S-1 and what it shows about the AI industry. They cover a founder-controlled structure built on a single Class F share that holds 50.1% of the vote, an uncapped 3:1 employee donation match that may be the most expensive perk ever offered, and about $900 billion in forward compute commitments. They also discuss why softer Q3 revenue points to a shortage of GPUs rather than of customers, the bubble and circular-financing bear cases, and who should be blamed when AI-assisted hackers take $5 billion from Binance.

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Full transcript available here: https://www.complexsystemspodcast.com/reading-the-anthropic-s-1-with-zvi-mowshowitz/ 

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Links:
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Timestamps:
(00:00) Intro
(01:35) How the S-1 talks about existential risk
(07:45) Anthropic has long had an attitude
(12:20) Anthropic’s uncapped donation matching
(14:18) Postscript: what the matching program will actually cost
(16:00) Sponsor: Mercury
(18:29) Revenue growth and cohort economics
(22:25) Postscript: Q3 was a supply story, not a demand story
(24:55) Is it a bubble?
(28:27) Sizing the market for tokens
(31:02) The commodification bear case
(31:56) Cash efficiency and $800 billion in compute commitments
(36:44) Postscript: what happens if the commits go bad
(39:20) Flexing compute between training, inference and subleasing
(43:37) Reading an S-1, with and without an LLM
(46:49) Circular financing and the dot-com comparison
(50:08) Wall Street versus the tech industry
(52:02) The three AI pills
(54:53) Industrial revolutions and how weird the future gets
(57:31) AI mathematics and the bitter lesson
(01:00:52) Capabilities nobody trained for
(01:04:40) Capabilities versus diffusion
(01:07:12) Token spend at the frontier
(01:09:09) Final thoughts on the S-1
(01:11:48) The Hackening and who bears responsibility
(01:17:49) Trapdoors and irreversible decisions
(01:19:12) Wrap


Creators and Guests

Host
Patrick McKenzie
I work for the Internet. Previously: sold two small SaaS companies, worked at Stripe, and helped build some pandemic response infrastructure.
Guest
Zvi Mowshowitz
Blogger world modeling, now mostly AI and AI x-risk, at Don't Worry About the Vase (https://t.co/O9LbMQjKoo or WP/LW), founding Balsa Research to fix policy.

What is Complex Systems with Patrick McKenzie (patio11)?

We live in a world where our civilization and daily lives depend upon institutions, infrastructure, and technological substrates that are _complicated_ but not _unknowable_. Join Patrick McKenzie (patio11) as he discusses how decisions, technology, culture, and incentives shape our finance, technology, government, and more, with the people who built (and build) those Complex Systems.