Ah, funky funky:
"if you can sell a quarter of your IPO to price-insensitive long-term investors with no fees, that is just a good deal."
If Google gives Anthropic the same amount of money ($74), it gets a share of Anthropic stock, and if the stock goes up Google will make money. But Google also gets something else. Anthropic has agreed to pay Google something like $250 billion for computing capacity over the next seven years.
Funny circular investment: an Anthropic share for Google is worth more than it is for you:
In some loose sense, the money that Google gives Anthropic for stock comes back to Google as revenue. Plus it gets the stock. [...] Every dollar that Google invests in Anthropic gets it (1) some Anthropic stock and (2) some revenue; every dollar that you invest in Anthropic gets you just the Anthropic stock. Google’s package is more valuable than your package.
Same for all the big chips makers and "a number of other giant providers of picks and shovels to the artificial intelligence industry."
"One conclusion you could take away from this is, like, ooh the AI industry is a house of cards, ooh the revenue is all fake, ooh, ooh."
Nono, let's pretend it's all real and revolutionary:
If a $1 investment by Google or Nvidia gets them $1 of revenue and $1 of stock, then the stock can’t really be worth $1, can it? If you’re just some venture capitalist investing in the same round at the same valuation, aren’t you overpaying?
...of the $90 billion target [that will be raised], $26 billion will come in a private placement to strategic investors.
No fees. Anthropic will probably pay its underwriters fees in the ballpark of 1% of the $60 billion or so that it targets raising in the IPO, but it will pay them $0 for the $26 billion that it raises from Google, Nvidia and friends.
Amazingly efficient. Screw the (investment) banks. #1612210
Also, the supply of shares sold into private placement is effectively constrained:
No flipping. Regular investors who buy in the IPO can immediately resell their shares, but the strategic investors in the private placement are locked up for a bit. (They are not technically subject to lockup agreements, but their shares are not registered and can’t practically be sold on the stock exchange for about six months.) This constrains the supply of shares available on the stock exchange, and perhaps keeps the price up.