alt Hacker NewsSo yes, but that doesn't negate the circular investment aspect, for most intents and purposes.
The risk is from this structure is mostly to do with how this affects market cap. Companies using the value of their shares to fund demand for their services.
That's a risk.
Replies
>Companies using the value of their shares to fund demand for their services.
That's not what's happening here though. Google isn't using the value of its shares to fund demand. Google is using its own cash flow to fund this demand from Anthropic.
The question is whether Anthropic has demand from end users for the capacity they are buying from Google (that's a yes I guess) and whether that demand is profitable for Anthropic (that's a question mark).
The tech industry goes through investment phases to produce oligopolies it turns around and enshittifies, parasitizing income off what it has built. Venture capital, acquisitions, acquihires, circular investments - It’s been incestuous for years. The question is whether competition from China’s sophisticated tech sector, which already surpasses the US in many areas, will put a pin in these plans this time round.
I feel like the whole market at this point is just AI since big tech other than Apple are all massively invested into that. Everyone owns either the S&P or the total world ETF which are both heavily skewed towards big tech and this trade - so literally everybody is in it. It might go well for a few more quarters/years but once something breaks or gets exponentially cheaper this will take down the whole market with it.