Anthropic Cuts Off Windsurf, Deel Rewrites the Narrative and Flock Safety Surveillance Tech | E2134

Key Concepts

• AI and Job Displacement: The potential impact of AI on employment, particularly in entry-level positions.
• Stablecoins (USDC): Digital currencies designed to maintain a stable value relative to a reference asset, like the US dollar.
• IPOs (Initial Public Offerings): The process of a private company offering shares to the public for the first time.
• AI Foundation Models: Large-scale AI models that can be adapted to a wide range of tasks.
• Space Logistics: The management and transportation of resources and equipment in space.
• Data Scraping: The automated extraction of data from websites.
• License Plate Reading (LPR) Technology: Systems that automatically capture and recognize license plates on vehicles.
• Drones as First Responders (DFR): Using drones to quickly assess and respond to emergency situations.
• Privacy vs. Public Safety: The ongoing debate about balancing individual privacy rights with the need for public safety.

ADP Employment Report and Economic Slowdown

• Main Point: The ADP May employment report showed only 37,000 new jobs created in the US, raising concerns about an economic slowdown.
• Details:
  • ADP data is a third-party payroll service report that comes out before official government data.
  • The number is directionally interesting and hit the stock market, causing worry about an economic slowdown.
• Arguments:
  • It's tempting to link the slowing job growth to AI taking jobs, but there's no hard data to prove it yet.
  • The slowdown could mean the Fed cuts rates sooner, lowering the price of money and impacting fintech companies.

Circle's IPO

• Main Point: Circle, the company behind the USDC stablecoin, is going public, with its IPO being 25 times oversubscribed.
• Details:
  • Circle previously attempted to go public via a SPAC.
  • The oversubscription indicates positive sentiment around the IPO.
• Arguments:
  • Stablecoins act as a bridge between traditional fiat currency and the crypto world.
  • The public may not fully understand stablecoins, but they can still use products that utilize them.
  • As a public company, Circle will release quarterly reports, providing more information about its performance.

2025 IPO Class Update

• Main Point: Early IPOs of 2024, such as eToro and Coreweave, are performing well, potentially creating a tailwind for future IPOs.
• Details:
  • eToro: Priced at $52 per share, now worth $64.65 per share.
  • Coreweave: Debuted at $40 per share, now worth $163 per share (nearly 4x its IPO price).
• Arguments:
  • The success of these IPOs could encourage investors looking at future IPOs in the technology space.
  • Skepticism around Coreweave before its IPO focused on its reliance on a few big clients, but the company has since secured more deals.
  • The market excitement about data center investments is back after a brief period of concern following the Deepseek R1 release.

OpenAI, Windsurf, and Anthropic

• Main Point: Windsurf, an AI-infused IDE company rumored to be acquired by OpenAI, was cut off from using Anthropic's Claude AI models.
• Details:
  • Windsurf was previously known as Kodium.
  • The rumor is that OpenAI is going to buy Windsurf around 3 billion.
  • Anthropic cut off Windsurf with less than one week's notice, likely due to the potential OpenAI acquisition.
• Arguments:
  • AI foundation model companies need to be neutral to avoid platform risk for startups using their models.
  • Anthropic's action is surprising, given its branding as a responsible and safe AI company.
  • The cutoff makes the OpenAI acquisition more likely, as Windsurf now needs a replacement for Anthropic's models.
  • Anthropic's revenue reached a $3 billion annualized run rate by May, growing from $1 billion in December and $2 billion in March.
  • This rapid growth may give Anthropic the confidence to be more aggressive.
  • There is a concern that this action could deter other companies from using Claude.

Deal vs. Ripling Lawsuit

• Main Point: Deal and Ripling are accusing each other of unethical behavior, with Deal attempting to correct the narrative around the initial accusations.
• Details:
  • Ripling initially accused Deal of hiring a spy to exfiltrate information.
  • Deal claims a Ripling employee posed as a customer to access details of its products and business practices.
  • Ripling responds that the employee was a junior consultant reviewing non-confidential materials.
• Arguments:
  • Deal's response doesn't address the intentionality behind the alleged spying.
  • Deal is trying to muddy the waters by accusing Ripling of bad behavior and highlighting its financial success.
  • Deal crossed the $1 billion annual revenue run rate milestone in Q1, growing 75% in the 12-month period ending April 30th.
  • There is a question of who should be held accountable within Deal if the allegations are correct.

Cohere's Funding Round

• Main Point: Cohere, a Canadian AI foundation model startup, is in talks to raise $500 million, potentially at a flat valuation.
• Details:
  • Cohere was co-founded by Aiden Gomez, an author of the "Attention is All You Need" paper.
  • The company doubled its annual recurring revenue in the last four months, crossing $100 million last month.
• Arguments:
  • The rapid growth of AI foundation model companies suggests that the investment is justified.

Impulse Space's Space Logistics

• Main Point: Impulse Space, a space logistics company, raised $300 million in a Series C round.
• Details:
  • Impulse Space is a competitor to Starfish Space, which was previously interviewed on the show.
  • The company has two products: Mirror (an orbital transfer vehicle) and Helios (an engine for moving satellites to higher orbits).
  • Impulse Space has 30 signed contracts worth $200 million.
• Arguments:
  • The space economy is now lucrative enough to be a business, not just a research project.
  • Space logistics is an exciting new idea that allows for independent operation and movement of things in space.

Reddit Sues Anthropic

• Main Point: Reddit is suing Anthropic for scraping its data after being told to stop, highlighting the tensions between content owners and AI model companies.
• Details:
  • Reddit has deals with Google and OpenAI to share its data for their use.
  • Reddit claims Anthropic accessed or attempted to access Reddit content more than 100,000 times after being told to stop.
• Arguments:
  • The courts will need to decide the legal boundaries of AI companies using copyrighted material for training.
  • Reddit's lawsuit claims Anthropic is falsely portraying itself as the "white knight" of the AI industry.
  • Reddit generates material revenue from its licensing business, which grew 66% in Q1.

Flock Safety Interview

• Main Point: Flock Safety, a company providing license plate reading technology and drone solutions for community safety, is balancing public safety with privacy concerns.
• Details:
  • Flock Safety's mission is to create thriving communities.
  • The company's license plate reading technology helps solve crimes by providing objective and actionable evidence.
  • Flock Aer Drone project uses drones as first responders to quickly assess emergency situations.
  • The company crossed $300 million in ARR last year with 70% year-over-year growth.
  • Flock's solution is cheaper than incumbent solutions because it eliminates the need for expensive construction projects.
  • Flock 911 aims to improve emergency response times by providing live transcriptions of 911 calls to officers.
• Arguments:
  • The company's technology is effective because it provides objective and actionable evidence.
  • Flock's solution is more affordable than existing solutions because it eliminates the need for expensive construction projects.
  • The company is thoughtful about privacy concerns and has implemented measures to protect user data.
  • Flock believes in regulation and works with local governments to tailor its technology to their specific needs.
  • The company is exploring new ways to use AI to improve public safety.

Synthesis/Conclusion

The transcript covers a range of topics, from economic indicators and IPOs to AI ethics and space logistics. A recurring theme is the tension between innovation and responsibility, particularly in the context of AI and data privacy. The discussion highlights the need for thoughtful regulation and ethical considerations as new technologies are developed and deployed. The interview with Flock Safety exemplifies this tension, showcasing the potential benefits of technology for public safety while acknowledging the importance of safeguarding individual privacy rights.