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Back to Anthropic S-1 Shocker, Greatest Business Ever? Google's $500B Wipeout, Midterm Predictions.

Why Did Google Lose $500 Billion?

Jason Calacanis says Google lost about $500 billion of market cap on Thursday, falling 10 to 15 percent, after Q3 earnings missed search revenue for two straight quarters. Searches are growing massively, but the people clicking the ads are not. Free cash flow is negative even while cloud doubled year to year to $30.7 billion. Overall revenue is still growing 25 percent year over year. Search, the business that pays for everything, grew 12 percent, down from 17 percent.

David Friedberg says the core Google ad business is a real challenge. The company trades at roughly 21 times operating income. Google Cloud operating income for this quarter went from three and a half billion dollars last year to over 11 billion. Core Google services grew from 33 and a half billion to 39 billion over the last year. That stretch may largely reflect a change in the ad pricing algorithm, and Google is in some cases over-earning on the clicks. Advertisers will see the pattern, reduce spend, and the ad business will not look as good. The open question is whether a consumer AI business ramps fast enough to replace core search revenue.

Transcript

Anthropic S-1 Shocker, Greatest Business Ever? Google's $500B Wipeout, Midterm Predictions ·

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More from this episode

  1. What Does Anthropic's S-1 Reveal?Jason Calacanis says Anthropic's S-1 targets a $100 billion public offering, large enough to pass SpaceX and rank as the largest ever.
  2. Is Anthropic's $80 Billion Loss Real?David Sacks says the widely reported $80 billion Anthropic loss is a phantom number, not a cash loss.
  3. How Does One Nvidia Dollar Become $18?David Friedberg says a dollar Nvidia spends turns into $18 that Anthropic makes selling to customers.
  4. How Did Microsoft Nearly Double Revenue?Chamath Palihapitiya says Microsoft's revenue went from $198 billion to $332 billion in the last four years while staff increased by only 2,000 people.
  5. What Is Anthropic's Biggest Risk?Chamath Palihapitiya says Ant's biggest risk is compute, and the biggest piece of that problem is data centers, then the financing commitments, then power.
  6. How Big Can Anthropic Revenue Get?Chamath Palihapitiya says Anthropic can become a revenue business in the hundreds of billions of dollars within about three to seven years if it reaches 25 or…
  7. How Much Debt Does the AI Complex Owe?Chamath Palihapitiya says the AI complex now owes $340 to $400 billion to the market, and the entire United States economy is levered to that complex.
  8. Why Will Governments Regulate AI Compute?David Friedberg argues that governments will regulate AI compute and assign who gets access to how much of it.
  9. Why Does the AI Complex Compete With Treasuries?Chamath Palihapitiya says the AI complex has gotten so big that it now competes with US treasuries, so somebody is going to have to pay more.
  10. What Revenue Targets Did Anthropic Lay Out?Jason Calacanis says Anthropic's targets put revenue at 100 billion dollars, then 300 billion, and eventually 600 billion.
  11. Why Do Companies Block AI at Work?Jason Calacanis says Gallup still has frequent and daily AI use at work at about 10% and 20%.

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