Anthropic Joins Defense Industry - Raising at $40B Valuation
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Welcome to the AI Chat Podcast. Today on the podcast, we're going to be talking about some really interesting news that has to do with Anthropic. They've been doing some really big stuff, really big stuff.

raising money and building new products, making new partnerships. We're going to get into all of it, including some partnerships with Palantir, AWS, and some contingent money. We'll talk about the contingencies with Amazon. So let's get into all of it. Before we do, I wanted to mention, if you haven't already joined the wait list for my AI startup, AI Box, we are launching a new product very shortly, and you can get on the wait list at AIbox.ai, a really cool new AI playground.

on this going to completely change the game. So if you're interested in that, the link is in the description and I would love to see you on the waitlist. So let's get into the podcast today.

So the first news is Amazon or AWS or Anthropix, sorry, is raising money. And they've been talking with a bunch of people about this $40 billion valuation. We've had the information kind of break that that's like the valuation that they're raising money at. Now, it wasn't exactly clear who they were raising from and how much they were raising from. It appears that they are going back to a trusted investor, Amazon, who previously has done some of their biggest investments, Amazon and AWS,

last or about a year ago, essentially invested $4 billion, but it wasn't just all at once. It was kind of depending on certain benchmarks and different things, they would unlock certain amounts of money, but the overall package was up to $4 billion. So that's

That's one of their biggest investors. And it looks like they have gone back to Amazon for kind of this big deal. But there is a contingency, and that is that they're only going to be making this investment if Anthropic is using Amazon-developed silicone, which is, of course, hosted over on AWS, to train their AI models. Now, Anthropic and a lot of the other AI companies have traditionally preferred using NVIDIA chips. NVIDIA is making some of the, you know,

most cutting edge advanced chips that are the fastest, best, et cetera. But Amazon obviously is trying to break into this space, right? They have a huge captive audience with AWS. And if they could crack into what NVIDIA has been doing with all of their H, you know, their H100s, 200s, whatever, all the NVIDIA GPUs and all the money that NVIDIA is making from companies training AI, that's,

they could really boost the bottom line. So this would make a big difference. Now, the problem is it's really hard for, you know, when there's kind of a clear winner, NVIDIA in this space, it's hard to convince all these AI companies to come over. So if they could get Anthropic as kind of their, you know, signature anchor customer being like, hey, look, one of, you know, the second biggest AI company out there right now is essentially using us. That's going to be a really big boost for,

Amazon. So it seems like this is the deal, um, because anthropic right now they're projected to burn through about $2.7 billion this year, just as they're scaling, they're training all their AI products.

And so, yeah, it'll be interesting to see if they can close this $40 billion. To date, Anthropic has raised $9.7 billion, but that's a little bit misleading because, you know, a couple billion of that is actually in, you know, investments that AWS and Amazon are going to make in the future as part of their original $4 billion package. So really, I think cash that they've taken in is a little over $7 billion. Now,

Now, this is only about half of OpenAI's total they've raised collectively. So there's a lot of competition. All right, let's get into the next thing that Anthropic is doing. And that is that they are partnering with Palantir to do AI for the defense.

So this is kind of something that's been kind of controversial with a lot of Silicon Valley startups. Google famously had a moment where they withdrew from all of their contracts with the U.S. government, you know, over essentially a lot of their employees not wanting to work with the Department of Defense. And it's...

It's kind of an interesting thing that's been controversial. There's been a lot of companies lately that have kind of made it a little bit more popular or trendy, and specifically Palmer Lucky over at Andrel has made this kind of, you know, he kind of framed this as a patriotic thing to work with the United States government if you're a US-based company and help defend against fraud.

foreign ally or adversaries talking about, you know, the need to work with the defense. And it feels like we've seen an overall trend towards this from a lot of industries after Russia's invasion of Ukraine and seeing how, you know, there's a lot of our allies and people that we're closely allied with that we would like to help support. And, you know, you definitely don't want to have the weakest military because our

tech and our innovation from our country isn't backing our defense. So anyways, there's all of that. But in any case, Anthropic is now jumping into it specifically to provide US intelligence and defense agencies the CLAWD AI models. What's interesting about this is like

Palantir has a really impressive AI kind of hub where defense people can go on. There's a lot of different features and tools, but one demo I've seen that's really interesting is essentially it's kind of like a critical risk and battle management sort of thing where you hop on there and it knows based off of all of the sensors and tech and intel how many tanks and how many...

you know, where the other opposing armies and forces are and what the landscape is all around it. And you kind of see it pulled up on a map and you, you know, say, Hey, like these troops are moving this way based off of this direction. What's the, you know, the best thing for us to do now, what's interesting is I'm assuming that anthropic can power a lot of the re maybe not the reasoning, but a lot of the they'll have a custom in-house AI that can do a lot of that. I would presume, but.

It can power a lot of the responses. It can power a lot of the tools that they're already using. So I'm assuming they're going to be plugging Anthropic and Clod into a kind of existing tools that are already there instead of using something like, you know, ChatGPT or maybe open source models.

And we actually have Meta that has recently announced they are also going to be working with the Department of Defense and providing their AI models for kind of defense uses as well, which is interesting because you're open source. And I guess just diving one click deeper into that, it's been rumored that China's army is actually already using Meta's open source tools to power some of what they're doing with their departments, their defense tools.

So it's really interesting. And this is kind of the big thing that a lot of people have been sounding the alarm bells on is if our foreign adversaries are using USA built tech. Obviously, there's a lot of Chinese LLMs as well. So I'm not sure, you know, meta isn't like the most powerful right now. It seems to be opening either still leading the way. But anyways, there's definitely that conversation in that discussion. But also it's like, can you actually stop them from using AI technology?

So anyways, lots of conversations around that, but it would appear like the trend in the industry is that we're moving towards more people

More AI companies working with the defense industry. So this is what Jensen said about all of this. He said, we're proud to be at the forefront of bringing responsible AI solutions to US classified environments, enhancing analytical capabilities and operational efficiencies in vital government operations. Access to Claude within Palantir on AWS will equip US defense and intelligence organizations with powerful AI tools that can rapidly process and analyze vast amounts of complex data. This will dramatically improve performance

intelligence analysis and enable officials in their decision-making processes, streamlining resource intensive tasks and boost operational efficiencies across departments. Okay.

This is interesting. And this is actually like a trend we've been seeing for a while. So just this summer, Anthropic, they brought all of their cloud models to AWS's GovCloud, right? So this is just for the government. And this was, a lot of people just felt like this was them kind of signaling that they wanted to expand their public sector client base. Because yeah, essentially, CloudGov is AWS's service design for the US government and all of their kind of cloud workloads and all that. So yeah,

This is really interesting. I'm excited to see where this goes. I think there's going to be a lot of competition here, as I mentioned, with Meta already jumping into this. This, to me, seems like a real big game changer, having a big company like Anthropic that's so focused on trust and safety getting into this space with the U.S. government, specifically in defense. So I feel like it could be something that kind of turns the tides on this trend of

of these AI companies and these tech companies working more and more with the U.S. government. And obviously there's a lot of money there, but also, you know, a lot of people say this is the patriotic duty of these companies to help, you know, the government in the country that they are,

based out of. So this is going to be interesting to see what happens. And I'll definitely keep you up to date on everything happening in the defense and in AI and all of the latest news coming out of Anthropic. Thanks so much for tuning into the podcast. If you enjoyed it, honestly, it would really mean a lot to me if you could leave the podcast a review. I appreciate those so much and I hope you have a fantastic rest of your day.