Apple after Tim Cook and is Anthropic worth $2 trillion?

0:00This episode of the Times Tech Podcast is sponsored by IBM.

0:04Danny: Wimbledon is one of those rare events that feels steeped in tradition, but behind the scenes, it's also a huge data operation. Millions of fans follow the tournament across time zones, devices and platforms, and increasingly they want highlights, stats and personalized updates in real time. IBM has worked with Wimbledon for more than 30 years, using data and AI to help create digital experiences for fans, including match chat, which can answer questions during play and likelihood to win, which uses live match data to offer near real-time predictions. It's a useful example of AI being applied in a way people can actually see and understand.

0:42Danny: To learn more about how IBM helps create smarter business, visit ibm.com slash Wimbledon. This episode of the Times Tech podcast is sponsored by KPMG. Katie, we've been tracking the AI surge for a while, but some of the latest data is pretty striking. It is. KPMG's latest quarterly AI pulse suggests that 7 in 10 UK business leaders still see AI as a top investment priority, even if the economy slows down in the next year. But turning that investment into tangible value is another question. And so a lot of organisations are still figuring out how to move from endless AI pilots to something that works across the business.

1:22KPMG's focus is on that gap, helping organizations scale from the pilot phase to AI-powered transformation they can trust.

1:30Danny: To find out more about how KPMG can help your organization make the difference, you can visit kpmg.co.uk forward slash AI. This episode of the Times Tech Podcast is sponsored by ServiceNow. Danny, one thing we keep hearing from business leaders right now is AI sounds great, but how do you actually make it work inside a company? Exactly, because most organizations aren't neat, shiny systems. They're layers of software, legacy tech, and teams all doing things slightly differently. ServiceNow sits across all that, acting as a control tower for making work move seamlessly through the organization.

2:08Connecting people, systems, data, and increasingly AI agents so that things don't happen in silos.

2:14Danny: Learn how ServiceNow puts AI to work for people at servicenow.com.

2:24Danny: Hello and welcome to Times Tech, where we unpack how technology is reshaping our everyday lives. I'm Katie Prescott here in London. And I am Danny Fortson. And today, we're looking at two hugely consequential companies, Apple and Anthropics, starting with Apple, where Tim Cook has stepped down as CEO after 15 years. And we're going to take a quick look at kind of Apple under his reign. Of course, He succeeded the late, great Steve Jobs. Yeah. Another company a bit like Microsoft with very few CEOs. Indeed. And then we're going to be talking about Anthropic, which is racing towards what could be the biggest IPO of all time.

3:04Danny: It's projections valuing the company at$2 trillion, raising more than$100 billion. Potentially from that float. I know. The numbers just seem to be getting more and more wild. When SpaceX went public back in June, it talked about what it was calling the largest total addressable market in human history. And basically, that was the estimate of how much potential revenue they could make. And they put that at 28 and a half trillion a year. I remember being like, OK, sure. But Anthropic is not to be outdone. So according to the Wall Street Journal, they are planning to tell investors that their total TAM, total addressable market, is over$30 trillion.

3:50Which, you know, just for context, the entire GDP of America, the largest economy in the world, on the planet, in the history of humanity, is$32 trillion. So basically they're saying that that is what they think they can capture.

4:05Danny: Because I guess if AI is as, to use the word you used, consequential, as everybody says it is, it can be sold to everyone everywhere. Maybe that's how you pick the number. If we're playing pick a number. Yeah, and I think, you know, they're not selling this as software. They're selling this as labor. You know, this is a replacement of X percent of labor, not just like software for accounting or software for science. it's kind of like we're going to take a big chunk of the entire economy. And not only that, we're going to grow the economy so that 30 trillion will in the future look small. But again, we're living in kind of science fiction land.

4:44It does feel like it.

4:45Danny: And can they actually pull it off? Is this just pick a number or is it backed up by fact and something more rigorous? We're going to be talking about all of that shortly. Just a quick reminder first, though, you can now hear from us twice each week yes big changes around here a total addressable market our total addressable market has doubled so we are actually now doing we're splitting the show into two you and I talking about what's happening each week and then later in the week we have an interview with somebody really interesting and kind of right at the heart of AI tech whatever it may be.

5:22So on Fridays, we'll focus on the big tech stories as usual. And then on Sundays, we'll drop the interview.

5:28Danny: And this week, our conversation was with Aidan Gomez, who is one of the co founders and the boss of a company called Cohere, an amazing business, fascinating company, because it is one of the very rare companies that's building large language models. And unusual for doing that, but also for not being from the US or China. It's one of the very, very few companies that is doing this outside of those two kind of hubs of AI. Aiden's from Canada. Cohere is co-headquartered in Germany and in Canada. They recently merged with a German business. And he's absolutely hellbent on building sovereign AI and making sure there is an alternative to the 30 trillion TAM of Anthropic.

6:11But now, momentous week this week out here on the best coast because did you just call it the best coast yeah that's what we do out here

6:24Danny: all right carry on you and your best coast so tim cook he took over in 2011 from famously from steve jobs so he's been in the top job for 15 years and obviously he just stepped down or handed over to the head of hardware engineering a guy called John Ternus on September 1st. We're recording on September 2nd. So the new guy has two days in the new job. Cook is stepping up to become executive chairman, but he is basically has handed over the reins of the world's second largest company after Nvidia. And we thought it would be fun to have like a highlights and lowlights of the 15 years. Good idea.

7:05Danny: What a time to have been the boss. incredible right so he takes over in 2011 you know the iphone came out in 2007 i think started shipping in 2008 so he really saw the takeover and really pushed the takeover of the smartphone globally and just to put some numbers on it when he took over the company's worth 350 billion dollars now it's 4.3 trillion so the company has added four trillion dollars of value over that period, which is not something literally anybody else can say in the world. And he's been credited, hasn't he, with changing Apple's whole supply chain, moving it to China, and making it all more lucrative.

7:51Danny: But also, I think it's fair to say more controversial in the process. Yeah, really doubling down on China, he famously struck this five year investment agreement to put $275 billion into China. And they've just built up this gigantic supply chain. And that also gave them access to the Chinese market, which again, a lot of Western companies can't do to that degree. And then on top of that, there's been the services business, the app store, which has just been an extraordinary revenue generator, all of its own. What he's basically done, because they have about 2.5 billion Apple devices in the wild right now, he's turned each of those into a cash machine.

8:34Where, you know, you're paying a little bit for this app over here, that app over there, iCloud, whatever it may be. Each of those has become like, you know, an ATM for the company. And if you're bringing in$100 billion a year, that's like a Fortune 40 business within a much larger business.

8:48Danny: And that hasn't been without controversy, has it? Because as you say, it's generating cash by charging the app makers a fraction of what they sell through it. And any users of Amazon's Kindle will know that you cannot still buy a Kindle book through the Amazon app on the App Store. You have to go onto the web page because Amazon is pushing back on paying some of that charge. And Epic Games famously took Apple to court over this. so it's it's being controversial but my goodness has it paid off but perhaps the most important thing that happened during tim cook's 15 year career is he changed my life see yeah he did there was a time katie and i don't know if you can relate to this well i would spend a lot of my time every day untangling the cords of my ipod or my or just my phone earphones like they i'd stuff them in my pocket and somehow they'd get all twisted up and then i'd be on the tube or on the bus i was like i just want to listen to my podcast but then it's like the mystery of the missing sock isn't it exactly just tangle you're like how did that happen exactly exactly exactly and i don't have to do that anymore so thank you tim cook because he launched earbuds airpods airpods all right well let's talk about some of those low lights then i mean the Chinese point is fascinating because clearly building that infrastructure there was astonishing for the company but it's also raised concerns particularly in the last few years as geopolitical relations have really soured with China about how sustainable that is there's been pressure from the US government to move that supply chain there's been pressure from groups who say you know how ethical, is it?

10:41Danny: Questions that have been raised over whether Apple has ever used forced labor from the Uyghurs. Apple has always denied that. Yeah. But it hasn't exactly been a, oh, look, we'll just move, you know, we'll just make iPhones and iPads in China and it's all smooth sailing. Indeed. Other things that, you know, they talk about like what Cook did was basically make this gigantic machine just work like a Swiss watch, you know, just like absolutely optimized every bit of it but in terms of new stuff they haven't really come out with anything beyond the airpods there's the airpods and the watch and those are cool but it's not like there hasn't been like a game-changing thing you know they tried those goggles those three thousand dollar goggles that i actually tried on which are kind of very heavy and kind of weird and nobody used them and you're kind of like, wow, this is your big play.

11:37You know, meanwhile, generative AI, pass them by.

11:41Danny: It does feel like there've been a lot of things in the pipeline that have been talked about and rumored. The foldable phone, which still hasn't materialized. And I think we were speaking about that last year, maybe even the year before. And then also self-driving cars, Project Titan, which they had apparently worked on for years and they just gave up, you know? So again, imagine like a really well-designed Apple car. it's very hard to make a car but again it's another one of those examples meanwhile he's returned something on the order of a trillion dollars in buybacks and dividends to investors and that's a choice right i mean it's been an amazing stock but imagine what you could have done with trillion dollars if actually you had some really big ideas and just went for it and you know what they did just a few days before he left they threw him a concert do you know who played i don't know just like the local band san francisco no one republic all right came to apple campus and played a private concert for tim and his mates that's nice what is one republic sing and i'm maybe i'm sounding old now but like i feel like i've known their name for a long time but i have no idea the same i sort of nod and smile when people talk about bands

12:57Danny: one republic counting star oh you know counting stars no i don't no more counting dollars we'll be counting stars tim cook anyhow goodbye tim cook although tim cook you're really not leaving you're just moving to a different office in the building but a new era for the second largest company on the planet um let's talk about anthropic and before we start talking about the the big tam the total addressable market and all of the money they're going to make from their IPO. I want to tell you about an anthropic adjacent story, which broke this morning in the UK and has sent ripples through the tech ecosystem here and actually in Europe as well.

13:33Danny: Do you know Matt Clifford? Yeah. Who was the government's AI advisor. He co-founded Entrepreneurs First, which we've covered on the program. It's a little bit sort of like a Y Combinator program. Yeah, we had his co-founder on the pod. We did. and he set up the Bletchley Park Summit. He's written the government's AI strategy or some stuff. He is leaving to join which company? Matt Clifford is going to join Anthropic. Of course he is, along with George Osborne. Yeah. They're collecting all of them. They're collecting the British, I don't know, what do you call George Osborne a tech star? Great and the good.

14:08Danny: Great and the good, probably better, yeah. So he's going to be Anthropic's managing director for international affairs and he's going to be leading the company's engagements with governments. And this has been really controversial here because he's also the chair of ARIA, friend of the Times Tech Summit and the Times Pod, actually, which is the government's moonshot agency. So some people, including MPs, are saying, hang on a second, isn't this a conflict of interest? Surely he's probably going to have to step down from that, I would guess. Well, he said he's staying and also staying on at Entrepreneurs First.

14:44Danny: So anyway, Anthropic has said the commercial relationship with ARIA is handled by a separate team. Matt has no involvement in any decision touching Anthropic, but the Science Innovation and Tech Committee has very swiftly written a letter to the AI minister. But more than that, it's just interesting to see X and LinkedIn and just my WhatsApp blowing up today with people going, really? But as you say, another one. That's really interesting, though, that because I do think that leads perfectly into our the other thing we big thing we want to talk about is Anthropic. Because out here, they are barreling toward this mega, mega, mega, mega, four megas, IPO, maybe next month.

15:25And that supposedly they're targeting a valuation of$2 trillion, which would be more than SpaceX. They're talking about$30 trillion total addressable market, all of this stuff. But at the same time, they're coming into conflict more and more. not necessarily conflict, but coming into contact, I should say, with governments, whether it's because of new cyber abilities of their tools, worries about jobs, data centers, how they're being financed, where they're being put up. So I can understand why they're trying to find people who are good in a room with politicians.

16:06Danny: But can Anthropic actually justify these massive, massive numbers. We're going to dig into some of the challenges that they've got ahead after the break.

16:20This episode of the Times Tech Podcast is sponsored by KPMG.

16:25Danny: We often talk about the shiny object problem with AI, where things look impressive in isolation, but are much harder to roll out across a large organisation. Issues like governance, workforce readiness and trust tend to become more important as things scale. KPMG's approach is to look beyond AI as just another technology rollout and instead how it could redesign work across the organization and fit into wider processes and decision making. So it's less about individual use cases and more about how organizations can transform and deliver outcomes powered by AI. To find out more about how it can help your organization make the difference, you can visit kpmg.co.uk slash AI.

17:10Danny: This episode of the Times Tech Podcast is sponsored by health and life insurer Vitality, your health's best friend. Vitality works differently, get active, build healthy habits, and you can unlock rewards from some of the UK's top brands while helping to keep your premiums low. It's award-winning health and life insurance that helps you live healthier. Find out more at vitality.co.uk. Today's episode of the Times Tech Podcast is sponsored by ServiceNow. ServiceNow describes itself as an AI control tower for business reinvention, connecting people, systems, data, and AI so workflows more smoothly across an organization.

17:50The platform integrates with different clouds, models, and data sources, bringing them together in one place to help your team.

17:57Danny: To learn more about how ServiceNow puts AI to work for people, visit servicenow.com.

18:07Danny: Okay, so if we're looking at these enormous numbers, can Anthropic actually justify them? Should we take a look under some of the headlines and try and break them down? We shall. There are some problems ahead, right? This is not a sort of, oh goodness, it's a$30 trillion addressable market. Brilliant. because, which is also a theoretical number. Anyway, we're already seeing customers turning to cheaper alternatives. Yes. So yes, on many metrics, they make some of the best models in the world, but not everybody needs the most souped up AI models for basic work. They don't. They don't. It's a little bit like Norman, not to speak ill of your friend, but do you need norman running on top of fable five if all he's doing is you know doing a bit of grunt work and making a few jokes no offense norman you know i mean and doing my calendar no absolutely not right and so you're seeing a lot of companies for example stripe the world's largest payment processor of all things online they process about of 25 of every transaction online and they process most of the payments for the AI startups, including Anthropic, OpenAI, et cetera.

19:28They just bought this company, OpenRouter. And their whole business, OpenRouter's whole business, is to basically be that kind of dashboard AI traffic cop that if I'm a user of AI and I have a task that requires just a basic model, maybe an open source model, maybe a free model it just routes it to that without me having to make that choice and the result for corporate company corporates who use these things is like their bills are just way lower and so you're starting to see companies get really choosy about how much they spend on ai and what systems they use and there's a whole crop of companies like open router who be like we'll direct the traffic and the result for you is you're just going to pay less because you don't need fable five to send you know to compose an email for example you need fable five to help you do some deep deep research on you know whatever it may be we're seeing lots

20:31Danny: of companies that are still in the process of implementing ai working out what it should be used for you know that there isn't a sort of absolute mad piling that perhaps we saw initially of we need to have access to the best models it does feel like everybody's sitting on their hands down saying okay we're going to wait and see where this is going and I feel like there's a bit of a dichotomy with with Anthropik and also OpenAI you know we talk about them as the frontier labs labs because so much of their money goes into research and development and then they've got this sort of revenue arm bolted on so they're racing ahead to try and you know make the most most advanced ai and at a certain point you're like well what is the revenue model for that who is the end customer for that right and maybe yeah yeah as you say that the need for for it just isn't a 30 trillion dollar market the counterpoint which i'm sure their bankers will be making and are currently making to big investors around the world is like look this is today the pie is x in 10 years the pie is going to be three times as large in other words like the demand for all of the stuff is going to be so great that don't think about like the economy as it is today, we are about to supercharge the global economy.

21:55We're going to take a big share of that much bigger pie. In other words, everybody relax. We're still going to keep growing at levels never before seen in the history of capitalism. That's going to keep going. And, you know, everybody's passing the hopium around that this whole thing will continue. And I can tell you here, we had some friends over past weekend and one of our friends, he's like, multiple time founder knows lots of people in this world and he's like i can tell you that like the very high end of like san francisco real estate for example is out of control because between open ai and anthropic you have call it a few thousand people who are a hundred millionaires a few billionaires many many are just just millionaires who can just pay cash who are already cashing in some of their stock in the private market and just like splashing the cash

22:58Danny: around it's it's quite extraordinary yeah i mean some of the salaries out where you are are mind blowing well see you don't have to make them public here in london but i was looking at wave the driveless car company based in london but it also has operations in san francisco the other day and they were advertising for someone in their robotics division for half a million dollars. Yeah, exactly. But people are making millions. And the hope is, you know, once these companies go public, people will, you know, crystallize fortunes in the many, many billions. And I think that gets perfectly to our last story, which is might be my favorite this week.

23:34Which is the company called SB Energy. Not sure you've heard of them. Soft Bank Energy. Ah.

23:45Danny: I've heard of SoftBank, thanks. Yes, they just filed to go public. And you've never heard of SB Energy. Most people haven't. Because it's this company that was just kind of supposedly been around since 2019. They did solar, they did batteries. But they've rebranded themselves as one of these companies that's going to build the infrastructure for this AI boom. Okay. building data centers, building the power generation you need to kind of run these data centers. And I see them as kind of a we work of AI. Ouch. I said it. I said it. So because I'll just give you a few numbers just to give you a sense.

24:30Okay. So SB Energy, the self-styled AI data center company does not have any data centers right now. Like when I say none, I mean zero. Okay.

24:41Danny: It's weirdly common for data center companies. Yes, indeed. Valuation supposedly like 50 billion. Okay. And they put out in their S1, you know, the document that they put out to investors to kind of show their plans. They reckon they're in line for about$440 billion of future revenue. But in the next two years, so the next 24 months, this company that has zero data centers right now expects to bring in about 13 billion, which is about 3 % of this mythical 440. Are these even proper metrics? These total addressable market future revenue numbers. Exactly, exactly. And who is backing them? NVIDIA?

25:29No. is providing a guarantee for$100 billion in financing.

25:33Danny: Is it providing chips too? Is it saying you can buy our chips? Exactly. Open AI has invested and is committing to, because the core project for this company is this old uranium enrichment plant in Ohio that's been mothballed. They said they're going to build a$500 billion data center there with many gigawatts of power. So it's like the biggest data center on the planet that hasn't even broken ground yet. So this is what's going, this is the latest AI IPO that is being foisted on the market. So again, it's more of an idea than a company. A concept, a concept IPO. Exactly. at 50 billion dollars they're selling an ambition at 50 billion wow and of course the the we work angle here is the man behind the curtain is masa yoshison who runs softbank and you go back to the we work times he was the primary funder of we work before that all went poof and i'm not saying there's any fraud here or anything like that he gave adam newman the the founder money in the back of a cab as i remember billions and billions yeah so here we are again throwing billions around on an idea and expecting the market to just be like yep we buy this future you're selling us be fascinated see if they at that data center gets built indeed so anyway that's our gallop through the world of ai this week and we will be back on sunday with an episode of the interview which this week is with aiden gomez from cohere one of the very very few companies building large language models around the world.

27:23Danny: And here's a short snippet from the interview. The only thing that counts in this period for you as a country and your competitiveness on the global stage and where you end up through all this change is do you have sovereignty? Because if not, you're going to be exploited. Your position is going to be weakened. Those with sovereignty will use it to, they'll use it as leverage over you. That's out on Sunday. Thank you so much for listening. And just a reminder, we're also on YouTube. So you can also watch us on YouTube. Go find us there. And if you don't already, please do subscribe so you don't miss this episode or any future episodes.

28:01Thank you. Bye bye.

28:17Danny: is focusing its work, helping organizations move beyond pilots and think about how AI can change the way the business operates and how it fits into wider processes and decision making. You can find all their insights and how they can help your organization make the difference through successful AI workforce adoption. Visit kpmg.co.uk slash AI. This episode of the Times Tech podcast is sponsored by ServiceNow. Now. There's a lot of excitement around AI right now, but the problem is what happens after the demo. When you have to plug that technology into a real company. Different clouds, different data, different systems that were never designed to talk to each other.

29:00Danny: ServiceNow's platform is designed to help people by connecting these pieces, enabling organizations to coordinate work across departments, tools, and increasingly AI agents. In fact, the company says more than 80 billion workflows run on its platform every year. Which gives you a sense of the scale of operations it's designed to handle. Learn how ServiceNow puts AI to work for people at servicenow.com.

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