Anthropic details ‘existential risks to humanity’ in IPO filing

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0:32Good morning from the Financial Times. Today is Tuesday, October 27th, and this is your FT News Briefing. Anthropic lays out its plans to go public. It may well be the biggest IPO of all time, but it is the biggest test so far of the robustness of the AI trade. And Israelis are voting in what could be the country's most important election in its history. Plus, what was Donald Trump Jr. doing in Mongolia with a Russian oligarch? I'm Mark Filippino, and here's the news you need to start your day.

1:13Anthropik has fired the starting gun to one of the biggest initial public offerings ever. The AI behemoth published its IPO prospectus yesterday. That puts it on track to list in November. The document also gives potential investors a look behind the scenes at the company. Here to tell us what he learned from the 335-page listing is the FT's George Hammond in San Francisco. Hey, George. Hey, Mark. So your whole day yesterday was raking through this S1 filing. Tell me what the top lines were. Yeah, just a few hundred pages. So this gave us the clearest sense yet of why investors have given Anthropic such a massive valuation and how the company plans to sustain its growth going forward.

1:55So there were big sections that traditional public market investors might expect to see on the business model and how Anthropic thinks there will be exponential growth in the cognitive power of AI tools, which will support its revenue. But all of that was counterbalanced by some of the more esoteric aspects of this S1, which were in particular the risk factors, which cover how this technology could threaten humanity with existential risks. So in some ways, it clarified a great deal about the company. In others, it left huge open questions about its future. Yeah, I mean, the words that really keep sticking out to me are that AI could pose catastrophic or existential risks, as you said, to humankind.

2:38Can you tell me a little bit about those? Yeah, so this is a range of different risks. So the kind of most explicable, I guess, are rogue actors, individuals or states using AI for various purposes, that's building biological or chemical weapons or using more sophisticated tools for major hacks. There is also a more sci-fi scenario, which is that as AI becomes more advanced than human intelligence, which is a world which many of these executives think we're soon to enter, it could improve itself and develop beyond our own understanding. That could pose existential risks if AI decides it wants to take over and take humanity out of the way.

3:22You know, that small little thing. How are investors reacting to either, you know, the existential risks to humankind or anything else going on in this S1? Well, the investors that I typically speak to are private market investors, venture capitalists and others. And I think it's fair to say that they pay lip service to some of the existential risks, but it's not really what they're focused on in these documents. They are focused on the hard numbers. It may well be the biggest IPO of all time surpassing, you know, Musk's SpaceX, which was$1.78 trillion earlier this year. but it is the biggest test so far of the robustness of the AI trade, which has really powered the US economy and to an extent the global economy in the last few years.

4:04Anthropik and Opening Eye, its main rival, are right at the center of this very, very heavy spending on data centers, on chips. And I think for that reason in particular, it will be a real test, not just for the company's health, but for the overall health of this AI boom. What if Anthropik's IPO is a bust then? Yeah, I think we've seen the first signs of what might happen if some of this enthusiasm about AI goes into reverse. NASDAQ has fallen about 7 % this month on the back of that caution. If Anthropic is a bust, I think we'd see that sell-off accelerate. And I think all of that spending is the same question.

4:43CFT's George Hammond in San Francisco. Thanks so much, George. Thank you, Mark.

4:53Today, Israelis are voting in what many consider the most crucial election in the country's nearly 80-year history. It's the first vote since Hamas' October 7th attacks in 2023, which led to the war in Gaza. James Schotter is covering the election for the FT from Jerusalem. Hi, James. Hi. So what are the stakes of this election? Well, the stakes are incredibly high because the visions that the two blocs, which are basically the far-right coalition headed by Benjamin Netanyahu, which has been in power for the last four years, and then the opposition bloc, which is centered around Gadi Eisenkot's Yashar party.

5:29Gadi Eisenkot is a former head of the Israeli military, joined Netanyahu's emergency wartime cabinet after the start of the war in Gaza before falling out with Netanyahu over strategy. Their visions are radically different. Yeah, tell me about their different visions for the country. I mean, Netanyahu and his allies are basically promising even more extreme policies than they pursued in the first term, such as emptying Gaza of Palestinians, annexing the occupied West Bank, and pushing ahead with a controversial judicial overhaul, which they began in their first term, that opponents believe would fundamentally weaken the already very weak checks and balances on Israeli governments.

6:10The opposition, as I said, the judicial overhaul in particular is one of the things they're pledging to undo. But they're also promising an investigation into October the 7th and the failings that allowed that. And then they're also promising to end the exemption from military service for ultra-Orthodox Jews, which is a long-running issue in Israel that has big implications for Israel's military, but also for other parts of Israeli society. What are polls telling us about how this election might go? The polls currently suggest that neither bloc is likely to be in a position to form a majority government after this vote.

6:46In that case, there'll be fresh elections. So the main challenger, Gaddy Eisencott, if he gets a chance to form a government, then he will likely try and team up with three other Jewish opposition parties. The problem for him is that, at least if the polls are right, then those four parties between them are unlikely to have a majority, which means that they would have to rely on the votes of Arab parties in order to be able to form a government. And at the moment, key players in the opposition have ruled out relying on Arab support. Do Eisenkot and his allies change position on that? Because if they don't, it's going to be very hard for them to form a government without Lettiny Yahweh.

7:27And James, this vote, as we mentioned, is the first election since the October 7th attacks in 2023 and the ensuing war in Gaza. Since then, we've seen a lot of settler violence in the West Bank. How does each side see that? So I think that the West Bank is probably the area where the policies of the two blocks are the most different. Netanyahu's coalition includes people who are both ultra-nationalist settlers and want to destroy the Palestinian Authority. And they've obviously also overseen a really striking surge in attacks by Jewish settlers against Palestinians that they've done absolutely nothing to restrain.

8:05And the opposition, although none of them are talking about a Palestinian state, they, I think, at the very least, would take steps to rein in the settler violence. I think in other areas, there's more consensus in terms of what Israel's security interests are. I think the opposition are also hawkish on Iran. They also regard that as a very serious threat to Israel. So I think the West Bank is the place where the differences will be most obvious. That's the FT's James Schadar in Jerusalem. Thank you, James. Thank you very much.

8:41A new report from the FT reveals just how close the U.S. president's eldest son is with a Kremlin-linked businessman. You may have first heard about Umar Kremlev after reports that he paid for some of Donald Trump Jr.'s wedding celebrations in May. The president later said his son repaid Kremlev. Now the FT's Peter Andringa has learned that the two also went on a hunting trip in Mongolia earlier this summer. Peter joins me now to discuss what he learned and the potential security concerns that the relationship is raising. Hi, Peter. Hi, Mark. So tell me a little bit more about this report. What have you found?

9:14So I've been looking at Trump Jr.'s travel and business deals and personal holidays across the world over the last couple of months. And I was looking at one of these holidays, which was a hunting trip in Mongolia, when I noticed that Umar Kremlev, this Russian oligarch, had posted a video from what looked like a very similar hunting trip at the very same time that Trump Jr. was in the country. And so I thought, you know, there was no way that these two men were just coincidentally in a very, very remote part of the world at the very same time. And so we dug into photos and videos that different hunting groups had posted, but also talked to guides on the trip and local officials from the region where they were hunting.

9:59And eventually found out that Kremlev had spent two days with Trump Jr. You know, as far as we know, this is the third public appearance that the two of them have made together. The first was on stage at an event in Istanbul, the second at Trump Jr.'s wedding. But for them to spend two days together in the wilderness without that many other people around is really quite surprising. Yeah, why is it surprising? Tell me a little bit more about this guy, Kremlev. So Kremlev is a pretty interesting character. We don't know that much about his backstory, but we do know that as a young adult, He had convictions for extortion and battery and then changed his name and pretty quickly started moving up within the sort of Russian sports and business worlds.

10:44What makes him interesting is that Russia campaigned and got him appointed as the head of the International Boxing Association in 2020. And that role has given him proximity to a lot of very senior Russian officials. He's reportedly very close to the head of the presidential security service. So that's Vladimir Putin's sort of personal protection group. And he's traveled with Putin on a number of occasions. Now, we should say that a spokesperson for Trump Jr. confirmed the hunting trip and said that this should not be surprising since the two men have bonded over their love of the outdoors. Kremlev, though, did not respond to a request for comment.

11:23Peter, you spoke to some former national security officials to get a sense of any risks here. What did they tell you? What they told me is that a relationship like this between a senior Russian businessman and the son of the sitting U.S. president just doesn't go unnoticed by the Kremlin. And these counterintelligence officials I spoke with had concerns about where this could go in the long run. They said that even if Kremlin and John Jr. are just friends now, there's a real chance that the Russian security services would try to manipulate that relationship into something useful to them in the future.

11:56That's the FT's Peter Andringa in London. Thanks, Peter. Thanks for having me, Mark.

12:06Before we go, Europeans are opting to vacation in South America instead of Asia. That's what the head of the region's biggest airline told the FT. Roberto Alvo leads Latam Airlines, and he said the continent is becoming a top choice for holidaygoers. That's because the war in Iran is making travel to Asia complicated. Gulf carriers shut down when the war started, and that cut off a major route between Europe and Asia. And while many Gulf airlines quickly reopened, passenger numbers are still not back to their pre-war levels.

12:41You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest news from the Financial Times.

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