Equity Monday: Everyone loves Anthropic

Equity is back from Disrupt and fired up for the rest of the year. Here’s what Alex got into today: Stocks are not peppy to start the week, while crypto prices have also moderated in recent days. Alex could not not talk about the Cisco-Splunk deal, mostly to promise that he’ll finish that post today come hell or high water. The Amazon + Anthropic news is the biggest item of the day. A $1.25 billion deal that could stretch to $4 billion is no small fee. And with Google and Amazon and Anthropic tied up and Microsoft buddied to OpenAI we could be seeing big tech choosing sides in the LLM model war. Meta is building AI chatbots, while Apple is working to build more stuff in India. To close out, Correcto’s neat round, and the finalists from Startup Battlefield 2023 — more on the winner of Battlefield here. For episode transcripts and more, head to Equity’s Simplecast website. Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews founders and more! Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:10Speaker 00

  Hello and welcome back to Equity, the TechCrunch podcast where we unpack the numbers and the nuance behind the headlines. This is Alex. Good morning. If my voice sounds a little bit tired, that's because last week we were all very busy in San Francisco at Disrupt. If you want the full skinny on what went down, well, we have an episode up from, I think, Friday, going over observations and learnings. It's a real deep dive and I really recommend it. Anyways, today it's September 25th, 2023, and on the show today, we have global markets, Cisco and Splunk, why everyone loves Anthropic, Apple and India, and then a really cool startup called Correcto.

• 0:51Speaker 00

  Starting as we always do with a look at the world of money and stocks today are mixed in Asia, where embattled real estate developer Evergrande continues to immolate. This time, it delayed a debt restructuring meeting due to what appears to be weaker than anticipated sales. Stocks are down sharply in Europe today and are set to fall at the open here in the US. Now, that's the bad news. Here's the good news. Earnings this week, just two names, Too Simple on Tuesday, and then Micron Technology this Wednesday. Basically, it's a blank on earnings this week, which is great, because this is also the very last Equity Monday of Q3, which means next week we'll start Q4, which means, well, we're right

• 1:35Speaker 00

  back to the start of earnings season. And then from stocks to silly stocks, let's talk about crypto. Crypto prices are off a bit since we last checked in, with Bitcoin falling 4.3% in the last seven days and 2% in the last 24 hours to just over $26,000 per coin. Ether is off a similar 1.5% today and 5.2% in the last week to about $15.70 per token. And just in case you were curious, I looked it up. The next Bitcoin halving is 227 days away. Look forward.

• 2:10Speaker 00

  Next up, my favorite part of the show, what I call big news that matters. And the biggest news last week was Splunk. Last week, Cisco announced that it would buy Splunk for $28 billion. And TechCrunch's own Ron Miller wrote that the deal will give Cisco, and I quote, "an observability platform that can fit nicely into its security business to help other customers better understand security threats, while also helping parse oodles of log data to resolve problems like helping understand system failures or troubleshoot issues across a broad array of enterprise systems." I don't know what that means, but it sounds like enterprise goodness. But at $157 per share, the question is whether or not Splunk is worth the cost. I'm still running all the math on that.

• 2:54Speaker 00

  More to come when I finish the post, but I wanted to raise the Cisco-Splunk deal here today, in case you missed it last week, over the even bigger news that Biotix AI won Battlefield 2023 at Destruct this year. Link to that in the show notes on the site, and I guess shout out Splunk. And then, everybody loves Anthropic. This is the biggest news of this morning. Amazon is going to invest $1.25 billion into Anthropic to start, and the e-commerce giant can boost its stake in the generative AI LLM company to $4 billion in time. Now, Google is also an investor in Anthropic, and TechCrunch did report earlier this year that Anthropic was looking to raise $5 billion this year.

• 3:37Speaker 00

  Well, if you throw in 1.25 billion, you're making real progress. What's Anthropic been up to? Well, earlier this month, it did launch its first consumer-facing premium subscription plan of Chatbot Claude 2. That's a mouthful. And it also plans to build a, quote, "frontier model," maybe called Claude Next, that's around 10 times more capable. That's according to a 2023 investor deck that TechCrunch got its hands on earlier this year. Google and Amazon are clearly betting on Anthropic, while Microsoft is mostly aligned or investing in OpenAI. And of course, these big tech companies would dispute that framing, saying that, "Oh, we work with everybody." But with the amount of money flying around and the sides that are being drawn up, it's

• 4:20Speaker 00

  pretty clear that generative AI model companies are a proxy battle in a larger war between big tech companies. Other big stuff you need to know. First up, Meta is building AI chatbots that it calls "gen AI personas," according to the Wall Street Journal. My question is just this: how much do people really want this sort of service? Snap, a rival social network, has some early experience with AI bots of its own, and I'll just say the results have been both up and down. And while ChatGPT has proven to be super popular, it's not a pal. It's not a friend. Do people want AI pals with current tech? It does seem a little bit reductive unless those models were trained on your personal data,

• 5:02Speaker 00

  which, frankly, sounds a little bit like a privacy nightmare. We're gonna have to figure out a lot of stuff with personal data and AI help. But Meta's not alone in pushing the boundaries here, in a good way. Microsoft announced new copilot tech for Windows 11 itself that I think might be super cool, but I've yet to dig into too deeply. But with Meta and Microsoft both announcing big things recently in the world of generative AI, well, the tech is coming to a platform near you. Next up, Bloomberg reports that Apple made around $7 billion worth of stuff in India in its last financial year, and a source said that that figure will scale to around $40 billion in the next four or five years or so. This is continued decoupling by major tech companies from China,

• 5:47Speaker 00

  a fraught market where some businesses are pulling back. But to put that new India number in perspective, Apple generated revenues of about $82 billion in its most recent fiscal quarter, which puts the $40 billion number into context. It's material, but less than half of Apple's most recent quarterly's revenue in a half decade. It's gonna take a long time for some companies to de-risk their China positions.

• 6:15Speaker 00

  Scooting along, how about a really cool company called Correcto? Now, the generative AI boom, TechCrunch writes, has put a spring into the step of Correcto, a Madrid-based language-writing tool startup focused on Spanish speakers that today announced a $7 million seed round. That transaction was led by London-based Octopus Ventures with Coria Venture Partners. And River Park Ventures also kicking in capital. Now, Correcto's initial launch was a Chrome extension. They put out just to test demand. Since then, they've also put out a freemium web app, which they say has seen 120,000 downloads and about 70,000 active users. Now, this is not an LLM that will write text for you,

• 6:57Speaker 00

  but instead is a little bit more like Grammarly for Spanish. And I looked it up today. There's more than half a billion Spanish speakers around the world. So this market is hardly small, or in venture speak, there's plenty of TAM. And frankly, it's cool to see some AI tech that isn't generative AI tech, right? I love that.

• 7:18Speaker 00

  Closing up, Disrupt was last week. It was good fun to see so many folks IRL. I just want to throw in a takeaway that I've been thinking about a lot over the weekend, which is that, you know, on Twitter or X, whatever, we often see venture capitalists and founders being all like, oh, my gosh, you'll never raise a dollar again. The market's over. Tech is doomed, whatever. In person, founders and entrepreneurs are just super busy. And it was really great just to hang out with them, listen to them, talk to them, see what they're working on, see what's getting them excited. Startups are going to be fine. So if you're a little bit bummed out about the tech world and think that maybe we're in for a long trough, I wouldn't worry about it too much. A lot of smart people are building really fast and really hard, and I think we're going to be okay. By the way, congrats to this year's Battlefield finalists.

• 8:00Speaker 00

  There was Parallel Health, which is precision skin healthcare, which I absolutely think is awesome. There's MagnaStar, which we said wants to solve the satellite signal interference problem for the full space industry, which I didn't know was a problem, but apparently it is. That's cool. Electrified Thermal Solutions, they're doing thermal batteries. I have a lot to learn about there, so I shall annoy Tim until he explains it to me. Then there's Biotics AI, AI-powered fetal screenings. If you've ever been to one of these, you know why AI might fit in there. They're a little confusing. And then Ally Systems or Ally Systems, AI applied to the world of physical production. I missed the finals because I was stuck backstage at my stage. So it's really cool to kind of this morning, catch back up and see what I missed because Disrupt is a big event. There's a lot going on. You can't see all of it.

• 8:44Speaker 00

  So shout out to the finalists. And with that, guys, we can wrap up.

• 8:50Speaker 00

  That is our show for this fine, fine, fine Monday morning, but if you need even more equity before we are back in your ears on Wednesday and Friday, we are EquityPod on both Twitter and Threads. We also have two sister shows, Chain Reaction and Found. Give them a listen, they're well worth your time and we'll talk to you very soon. Bye. Equity is hosted by myself, editor in chief of TechCrunch Plus Alex Wilhelm, and TechCrunch senior reporter Mary Ann Azevedo. We are produced by Teresa Locan Solo with editing by Kell. Bryce Durbin is our illustrator and a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening and we'll talk to you next time.