Anthropic Secures $2.75 Billion Funding from Amazon, Surpasses GPT4

0:00We have some major news this week out of Anthropic that Connor and I are dying to tell you about. So there's a few things. One of the biggest things is that Claude's new LLM is beating OpenAI on certain benchmarks, GPT-4. This is actually very hard to do. It's kind of been interesting and something I've almost laughed about over the last year that everyone that comes out with an AI model, they like put the benchmarks of themselves versus GPT-3.5 because no one even wants to compare themselves to GPT-4. we're now getting to a point where these models are getting better than gpt4 of course open ai is probably going to launch gpt5 soon so you know like you know hold your horses but um this is amazing claude is doing it claude's an amazing model in addition to this they announced something absolutely insane which is a 2.5 or 2.75 2.75 billion dollar investment from amazon so yeah connor what have you been seeing here jen where do you even begin on this anthropic uh is having itself a week uh you know or this this past week it was just bonkers i mean so first of all jayden we were talking about it was kind of a weird quiet week for a little while there and then amazon kind of comes out and tells the world that they're doing 2.75 billion uh into anthropic and they might have been reading the tea leaves a little bit just because uh you and i and a lot of other people got access to claude 3 whenever that was a couple weeks ago and i'm hearing just just from anecdotally, but certainly I'm experiencing, Cloud3 is just so, so good.

1:24But here's the interesting thing, right? A lot of different places to take this because Amazon, this was its largest venture investment ever. And when you're talking about that with Amazon, that's pretty serious. And so just the implications of that for what they're offering enterprise users and through Bedrock and through their cloud provider, all that kind of stuff, they're clearly, you know, making a really, really big bet in Anthropic. Of course, Google has also made a big bet for Anthropic early on. I think, again, I think Google invested, I think it was like 300 million back when the valuation of Anthropic was very low.

1:57But the thing that I'm, again, sort of like the most interested in, in a way, is this chatbot arena leaderboard. And Jaden, you kind of hit the nail on the head, right? Like it's, you see these things and everybody's kind of creeping ahead of everybody else. But ultimately, you know, it's interesting. It gives you a good benchmark. ChachiPT4 came out a year ago, guys. So obviously OpenAI is still, you know, kind of the OG on this. But my thing for this is when I saw Claude 3 up there, it was like one of these moments in the movie where it's like, wait, there's a new leader for the first time in 40 years.

2:31It just felt like that moment. And so when I saw that, that was interesting, but even maybe more interesting was that's Opus, right? That's the paid version, which I pay for. But then there was also Haiku, which is their small, they have Opus, Asama, and Haiku. And Haiku was beating an old version of GPT-4 as well. And when you think about the efficiency of all this, and Jaden, I know with AI Box, by the way, I love the new AI Box hat, got to get that merch out there. But something like, you know, for developers, when they see something like this, a small, really reliable model that's way more efficient and way cheaper, even that feels really exciting no yeah 100 i think for me what is amazing like you mentioned is of course we're having these models that are getting better and better and more and more powerful so this is this is cool and yeah seeing claude beat gpt4 that's also very cool we've actually talked about this on the podcast before we've both been very impressed with claude as of recent and like who knows what's coming down the pipe sam altman recently said uh that gpt4 sucks um so you know that's kind of funny as they're obviously prepping for five so who knows what's on the horizon but as it stands today, I think your best bet is if you want the best results with the best tone I found, it's Claude.

3:49And that's surprising. I feel like I'm very impressed by the company, right? They've been able to stay very relevant and up there. So that's amazing. But the other thing that you brought up that I'm really excited about is the size difference. A lot of times right now, we're just talking about who's the best and benchmarking the best models. And people aren't talking as much about like, what is the most efficient model? What model can run on a device on your phone. Like, and I think that there's, there's some people working on this. It's very exciting. So when I see this, um, from, from some of Anthropics, other models, this is out, this is very exciting for me.

4:20Um, being, you know, having a software company, we're going to be embedding all of these models in, uh, this is something we look at. We think about is, you know, how much does it cost to run each of these models? Because people inevitably make products and apps on the AI box platform. Um, it's a factor like people are going to be, people will be using like not the number one model, right? So you would, you might use theoretically, right? Like a lower version of Claude because it's cheaper to run. And so people take that into consideration when they're building products. And so, yeah, I think it's an interesting element that I'm very excited about for sure.

4:52Yeah, same. And it's, it's just funny because, you know, I think Ethan Mollick had pointed to the Wharton professor had pointed out that Bloomberg had spent something like 10 million dollars on an LLM that, you know, can't even beat like 3.5 or something like that. And it's, it's this, it's this thing where I remember the original, not maybe not original, but last year's interview with Lex Friedman and Sam Altman, where they were talking about GPT-4 and saying, gosh, this kind of looks like AGI almost. And now Sam Altman is here a year later saying like, it totally sucks, which is a pretty big, now this is also what I love, just side, sidebar.

5:24What I really like about Sam Altman is his, the quickness in which he talks about things not working so you and i've talked about with um the plugins on chat gpt and how pretty quickly after that altman said i just don't know if there's a good product market fit because people seem to want gpt technology built into their uh their canva or their kayak or whatever but they don't need to go to a separate thing and i think he was dead on so just the ability for him to call out his own product now first of all it shows unbelievable self-confidence because he must know that gbt5 is coming and they i've heard may or june or something like that but with claude yeah you and i you hit the nail on the head about it being um having great tone and this is the thing that i always you know this is the ai applied podcast right and so we always try to think like how does this apply to you and i'll just say how it applies to me jade and i uh each create a ton of content i think there's a lot of people out there who do that too so when people say oh is it beating you know gbd4 i love those banners too i love headlines i'll put them up as clickbait like oh it's killing blah blah blah like i just because i love it yeah but in reality in reality gbd4 it doesn't go away even now because it has so much more so it's not about replacing right it's about you know because you don't have code interpreter or dolly or you know the ability to browse the web or any of that stuff with claude what you do have with claude is an absolutely uncanny uh tool that can match your brand and match your voice.

6:57And also, I don't know, Jaden, like it's, it's funny. I never thought that this would matter to me that much, but the user interface cloud just feels kind of like warmer and kind of a little easier on the eyes and things like that. I know that kind of sounds a little dumb, but like, you know, when you're staring at the screen as much as we are, I think it kind of matters. GBT is starting to feel a little harsh. Maybe I always have it in dark mode, but anyway, I guess for you, do you think of these things when you think about what you use how much are you um breaking up like you use this tool for this but this tool for this how do you think about that you know at 100 is is coming down to that and i think that maybe that's where we go in the future maybe there's not and i actually think that's a good future it's not just one dominant player that everyone uses for everything i personally um i have a bunch of different tasks that yeah i have like a tab of chat gbt open in my browser that i'm like i go there and use but then there's like other tasks like for example when you and I are like, oh, you know, like we want some more context on the story we're going to talk about today and we'll just go to perplexity and like we'll get some bullet points and like, oh, OK, well, what about this?

7:57And we're like sharing links and looking at it like that kind of like research thing. Yeah, that's 100 percent perplexity. And it's going to be it's going to be GPT for for like me helping me write like descriptions for my podcast or something. So I use, yeah, different tools for different things. I think this is going to be more common. And I think this is a very healthy future. I don't want this all to be consolidated into, one company dominating. I want there to be a lot of competition. We're going to get better products as consumers when this happens. As far as Anthropic goes, I think this is going to be a big player to keep an eye on.

8:28Obviously, we've all been saying this. It's one of the top funded. I realized that over the last year, Anthropic has actually closed five different funding rounds. So their five different deals are worth about$7.3 billion. So this is very impressive when we consider the fact that open ai raised 10 billion dollars from microsoft for 49 last year um and so like they're getting very close to that right 7.3 billion now it's not definitely it's not like all cash because some of it it's like they're obviously working with um amazon because they're getting like you know cloud but that was kind of the deal with open ai as well like in the 10 billion dollars they got from microsoft it's like yeah here's 10 billion dollars but you got to be on Azure and we'll build you custom stuff.

9:09But so it's kind of like these cloud providers are also like dishing out money that they know is going to come back to them. Some people say it's like, you know, it's like rigging their books or whatever, because it's like, here's some money, but you definitely have to give it back to us. And then they counted all as revenue. But you know, whatever, that's an accountant's problem, not mine. But I do think yeah, no big player, they're raising almost as much money. And the thing that I like about Anthropic, and I hate to be I don't know, a pessimist or whatever. The thing that I do like about Anthropic is that they were scrappy enough and they were able to go and cobble together a measly$7.3 billion, but they got it from different companies.

9:47And I actually think this is a big play because they got 300 million from Google's cloud platform. And I actually like this because when you have this situation, you don't have 49 % of Anthropic necessarily being owned by one company that it feels like can have maybe more control over the company than you'd like. And that's the only thing with OpenAI that's kind of tricky is like with 49 % being owned by Microsoft, they can make a lot of decisions. They have a lot of sway into what's going on there. And so I think that's something that a lot of people are paying attention to. Yeah, I think you're right.

10:17I mean, because we don't associate Anthropic with Amazon quite as readily. I mean, we do a little bit, but not quite so much as OpenAI and Microsoft. And it's OpenAI and Microsoft are, by the way, huge, huge fan, obviously. But it's also like, it's starting to feel a little boy bandish where it's like you know justin timberlake wants to break off and do his own you know what i mean like they're it's starting to feel like they're frenemies in a way right just because i like you know how they share revenue and all that kind of stuff is getting like a little strange to me but uh but yeah with anthropic i mean i agree so do you remember jaden uh we did a story not so long ago where anthropic was projecting i might have this number wrong so apologies folks don't take my word for this but like they were projecting something like revenue at like 800 million for the year.

11:01I don't think it was AR. It was like for 2024, whatever it was. And I think I and you and others were like, where are they getting this number, right? Because this is before Claude III. They had lost their competitive advantage around context window, which was their big thing. I don't think people think enough about the ethical frameworks and safety and stuff like that to do that. I don't think we're at that stage of the movement with AI and that we are with buying organic and stuff like that or the green movement. I just don't think we're there with AI where that's really going to impact consumers.

11:34I think consumers are much more concerned with obviously speed, accuracy, and efficiency. And I'm thinking that, okay, all of a sudden that 800 million feels like, oh yeah, they're totally going to do this. But I also think that, and somebody on my LinkedIn timeline, I think it was Jason Wilde from Microsoft, or formerly from Microsoft saying this, it's like the guy running, or the woman running the 10K. It's like, if you know you're not going to win, you sprint in the beginning and it feels like anthropic right now is sprinting they're getting a name for themselves everything else because gbt5 is just around the corner anyway like i you know i'll wrap this up because i know we're going a little long here jaden talking about this but like the thing that's exciting to me is that if you are listening to this podcast you're listening to ai applied what we always encourage you to do is don't get wedded to one you know thing one tool You know what I mean?

12:23Like GBT4 has been awesome. But look, I mean, Claude3 for brand voice, all that kind of stuff. Try it out. Get in there. See what tools work for you. You don't need a million at the moment. Perplexity, Claude, GBT are kind of my go-tos. And now U.com too. Shout out to U.com. We spoke with Richard Socher about some of that stuff. Anyway, I think, Jaden, the way that you and I see it, I don't want to speak for you, is, look, keep an open mind. Test these tools out. You'll find what works for you. yep 100 % and um i i definitely have different tasks and i use different things for and anytime and like lest you get hung up on the fact that but i don't want four tools that all cost 20 a month yes you actually do because all of them save you so much time and energy so like just make the investment especially if you're using this for anything related to your career or your job like this is the best investment if it came down to it cancel your netflix and get clawed you can quote me on that.

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