Jamin Ball

Provable inference is coming. A very real commercial use case for zero knowledge proofs is forming! "Recently commercial efforts have reached impressive numbers, with Attestable proving Gemma 4 31B at 53–77 tok/s on a single H100" cc @attestable anthropic.com/research/prova…

Cloud Giants Update: AWS (Amazon): $184B run rate growing 39% YoY (last Q grew 37%) Azure (Microsoft): ~$138B run rate (estimate) growing 48% YoY (last Q grew 43%) Google Cloud (includes GSuite): $123B run rate growing 103% YoY (last Q grew 82%, neither are cc)

Google Cloud at a ~$123B run rate growing 103% Quarterly YoY growth trends below $GOOG

Azure at a ~$138B run rate growing 48% Quarterly YoY growth trends below $MSFT

AWS at a ~$184B run rate growing 39% Quarterly YoY growth trends below $AMZN

I would really strongly disagree here! And think it’s a big misconception about the S-1 Anthropic (like any startup) issues stock to raise capital early on. In most cases, that stock is preferred stock granted to institutional investor in return for capital. In other cases (again, exactly like how any other company would do it) capital is raised in convertible notes or SAFEs. These instruments don’t have a price, but instead peg a valuation (or a discount) to a future round. Discounts are the absolute norm. Company gets cash now, investor says to compensate me for giving you cash now price the security at a discount to the next round. Again, highly normal. If a convertible didn’t have a discount, there’s zero incentive for the investor to fund now. They’d just wait and fund the money when there was a known price in future. If company wants cash earlier, converts come with a discount. Doesn’t make sense to tell an investor “pay the same price now that a future investor will pay later when company is more de-risked” Ok - so back to Anthropic. They also, like most companies, raised money in a combination of straight equity, convertible notes, SAFEs, etc. For some of the strategic investors (Amazon, Google, etc), they funded a lot of capital in convertible notes or SAFEs. Why not just straight equity? A few reasons! (This next part is more of my own speculation) - public companies want to stay below certain ownership levels in other companies to avoid triggering “control” questions by the FTC. Notes / SAFEs don’t come with shares. They’re a promise for future shares. Large strategics can then stay under ownership thresholds in 3rd parties - maybe Anthropic didn’t want to give governance to the strategics. Notes / SAFEs could allow the company to convert the equity into non voting stock vs voting stock - maybe the strategics preferred converts! These securities would sit senior to preferred equity on a cap table. Anthropic was a risky early stage startup. Maybe the strategics wanted to be senior on the pref stack in case something went wrong. They’d be first to get their money back ahead of preferred investors if so All of this to say - converts / safes are a very normal form of fundraising Now - everyone is looking at the CURRENT p&l and saying “wait a second! Look at the value of the convertible notes / Safes! Anthropic gave away all that value at a huge discount!” No…not true… Anthropic raised these converts / SAFEs back in time when that was about what their current equity was trading at! It just so happens that the Anthropic equity has appreciated a lot since then…Because those securities haven’t converted to equity yet, there is a mark to market change in value. It’s like saying “ah! Anthropic issued stock back in 2023 at such a discount to their current share price! So crazy! They could only issue stock back in 2023 by offering crazy discounts!” Kind of nonsense…when companies do well, share price goes up and historical prices always look cheap. In summary - Anthropic issued converts / safes to strategics (speculative rationale listed above). They received cash in exchange for a promise of future shares. Those future shares were priced roughly where the equity was priced at the time. This then becomes a liability on the balance sheet (promise for future shares). That liability goes up in value as share price goes up (even though conversion price fixed at time). As the liability goes up, there needs to be a reduction in equity value somewhere for the balance sheet to tie. That reduction is in the form of retained earnings (which comes from income statement). So we now need an accounting entry on the income statement (ie reduction) to reflect the increase of the liability. Net income needs to be reduced by the increase of the liability. The Anthropic net income for H1’26 was ~($80b). But just about all of that was this increase in liability of marking the convert and note to market. They didn’t lose $80b.