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).

[0]: https://claims-market.com/pricing

There seems to be a huge gap between bid and ask there (40%!!). That's a huge arb. I wonder what the liquidity is like for these claims.

Most of the FTX assets are worthless altcoins that are being marked to market at ridiculous prices that you could never liquidate at.

Anthropic is definitely claimants best hope at a reasonable recovery.

Related from December (but unresolved there): Will Anthropic return the $580M in Series B funding led by SBF? https://news.ycombinator.com/item?id=34111082

Related from June: FTX Halts Sale of Its $500 Million Stake in AI Startup Anthropic https://archive.ph/WR94S

Seems like FTX owns that stake, not Bankman-Fried and Ellison? Nishad Singh was apparently involved too: https://www.reddit.com/r/CryptoCurrency/comments/yz7xpx/inve...

Why would an investment ever be "returned"?

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.

> Why would an investment ever be "returned"?

Because the money used for the investment was stolen.

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.

FTX was an investment company. Of all the fraud that company did do, this is like the one thing they were supposed to be doing.

And it's up, so if you think they should renege investments, start with the ones that failed and not the profitable ones.

They attempt to sell the shares of the company it invested in.

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.

I asked Dario this on stage last week. He said the shares are owned by the bankruptcy estate and are being sold/disposed of through that mechanism.

(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].

[0]: https://www.bloomberg.com/news/articles/2023-06-27/bankman-f...

Well, the catholic church does run bunches of schools and orphanages. So quite interesting, indeed!

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!

The downside to the whole FTX coming good from this bet is SBF will claim his methods were valid!

He can say whatever he wants. His credibility is in the tank given that he stole from his only cheerleaders.

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.

Claude 2 is probably the closest competitor to GPT-4 at this point. If you haven’t heard of them before it’s because you weren’t paying attention.

+1 - Anthropic is doing cool stuff. I recommend playing with it. You can upload files directly and it has token limit of 100k.

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.

/s

Altman scared the fuck out of me a decade ago.

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?

Or do they get a pass?

Yes, you are. Now, what are you talking about?

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”.

[1] https://en.m.wikipedia.org/wiki/Loopt

[2] https://en.m.wikipedia.org/wiki/Socialcam

[3] http://www.paulgraham.com/relres.html

I completely missed the Socialcam era apparently. First I've heard of it.

>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.

Anthropic is known for having a model with a context nearly 3x that of ChatGPT. You must not be following LLMs very closely

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?

Don’t worry, GPT-4 is still the best.

Water cooler chat is that it’s a 1.5 terraweight, 16-way mixture model that is running at a loss on inference for paying customers.

If that’s true it fucking better be.

This should not have stopped any of FAANGs from competing, and yet they are still far behind OpenAI - more than a year after GPT-4 was trained.

Claude is pretty amazing actually. With it's 100k context widow it can do some interesting things

>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.

> Google Cloud boosted its operating profits to $395 million for the second quarter

From https://www.geekwire.com/2023/google-cloud-posts-second-stra...

Yes, Google has killed a lot of products... but none of those ever came anywhere close to turning such a profit!

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.

Do you have a reference to some of those "all accounts"? Doesn't need to be all of them, just a couple of the most credible ones would be great.

Do you have any evidence for this? Seems like a pretty severe accusation.

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.

Why wouldn't google cloud exist in 5-10 years? The scale of the project isn't the same as google reader or of their other cancelled projects.

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.

Google is hiring 15 year olds?

"in a year or two".

Google hires 17 year olds?

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.

What do the betting markets think about the continued existence of Google Cloud?

https://manifold.markets/OliverMattos/will-google-announce-t...

> the betting markets

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.

I would say it's less wether or not Google Cloud will exist in 5-10 years (which is still a valid concern).

But will specific parts of Google Cloud continue to exist or increase in cost. Things that have happened to GCloud very recently.

It just isn't worth the risk to invest in google cloud.

> But will specific parts of Google Cloud continue to exist or increase in cost. Things that have happened to GCloud very recently.

Like what exactly?

I would ask, what are they using instead and what would they get by switching to Google Cloud that they don't already have?

> Question: why isn’t Anthropic using Google Cloud, given who their past investors include?

They claimed to use it back in February: https://www.anthropic.com/index/anthropic-partners-with-goog...

„Anthropic, an AI safety and research company, has selected Google Cloud as its cloud provider“

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

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.

Or it shows that they don't want to abuse their position?