OpenAI’s existential questions | TechCrunch


OpenAI has been all over the news recently, whether that news is about acquisitions, competition with Anthropic, or bigger debates about AI’s impact on society.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I did our best to round up all the latest OpenAI news. While the company’s latest acquisitions seem to be classic acqui-hires, Sean suggested they also address “two big existential problems that OpenAI is trying to solve right now.”

First, with the team behind personal finance startup Hiro, the company may be hoping to  come up with a product that has “more hooks than just a chatbot, and maybe something worth paying more for.” And with new media startup TBPN, OpenAI could be looking to “better shape its image in the public eye, which lately has not been great.”

Read a preview of our conversation, edited for length and clarity below.

Anthony: [We have] two deals that are worth mentioning, one is that OpenAI acquired this personal finance startup called Hiro. And that comes after another deal that was literally announced when we were recording our last episode of Equity, so we didn’t get to talk about it: OpenAI had also acquired TBPN — a business talk show, like a new media company.

And I think both of these deals are pretty small compared to the scale of OpenAI. These are not things that people expect to really change the course of their business or anything like that, but they’re interesting because it suggests that there’s still this [attitude of,] “Let’s try out different things.”

Especially [with] the TBPN deal […] particularly at this time when it feels like OpenAI, from all the reporting we’re reading, is also trying to really refocus on making ChatGPT and its GPT models really competitive in an enterprise context with programmers.

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Is running a tech talk show, should that really be on the to-do list?

Kirsten: No, this should not be on the to-do list. That’s it. 

I do want to mention Hiro because to me, that’s an interesting one, because Julie Bort, our venture editor, super talented, she wrote about this and was I think the first to write about it. She dug in a little bit and basically this looks like an acqui-hire. The company is folding. They basically said, “By this date, you won’t be able to access this anymore.”

This is a personal finance startup. And they only launched two years ago. So this absolutely is about getting talent on board. So I’m very curious to see if OpenAI is going to be just absorbing them into the ether at OpenAI, or if they’re actually interested in some sort of personal finance product that they want to work on. To me, it’s not really clear.

Sean: I think you look at both of these as acqui-hires to a certain extent. I mean, the TBPN acquisition, allegedly they are going to retain their editorial independence on the show that they make every day. And all respect to those guys who’ve put that out there and gotten it off the ground so quickly and grown it into what it has become.

I think any person who follows the media should have a healthy dose of skepticism that when you acquire something like that and you put the people who make the show under the org of the public policy people and comms or marketing adjacent people higher up at the company making the acquisition, that you could have good questions about whether or not saying “editorial independence” is enough. It’s not an incantation that just works.

But you know, what’s interesting to me about these two, while they are similar in their acqui-hire-ness, I think they both represent two major problems that OpenAI is facing.

One is Hiro. OpenAI has a very successful product in ChatGPT. As far as whether or not that will actually ever make them enough money to become a sustainable business that’s not raising the largest private rounds in the world, ever, to keep things going, is a big question. And they also seem to be struggling to keep up on the enterprise side of things where the real money seems to be, so bringing in a team like this seems like taking a shot at, “What else can we do?” 

The guy who founded Hiro seems to have a serial entrepreneur streak of creating consumer apps, and so this seems to me like a bet on them being able to come up with something else that may have more hooks than just a chatbot, and maybe something worth paying more for.

And then TBPN is an acquisition made to help better represent what the company does and better shape its image in the public eye, which lately has not been great and certainly is under more questions now than just a few weeks ago, because Ronan Farrow just led a report at The New Yorker that dropped suspiciously right around the time that this and a couple other announcements from OpenAI came out last week. 

I think those are two big existential problems that OpenAI is trying to solve right now.

Kirsten: So the thing that you didn’t say is, there’s Anthropic kind of looming in — not in the shadows, I mean, they’re very much taking up a lot of space here — but they’re having a lot of success on the enterprise side of things.

It feels like these guys are competitors and they also feel like very different companies in a lot of ways. Anthony, I’m wondering if you see them as direct competition to OpenAI? Or [are they] just finding their stride in enterprise and in a way, these two companies are clearly going to coexist and they’re really not directly competing with each other — maybe on talent, but not necessarily as we initially thought of them?

Anthony: I think they’re directly competing with each other. There’s definitely a scenario where if AI as an industry, as a technology, is as successful as its proponents hope for, they could both be very successful companies, they could just be the one and two. And the success of one does not necessarily mean that the other will just fade into obscurity. 

And again, none of this is official, but there’s just been a lot of reporting around how it seems like OpenAI, more than anyone, is obsessed with and upset about Anthropic’s rise. 

Our reporter Lucas [Ropek], he did a great piece over the weekend about the HumanX conference, where he was talking to everyone there and they’re sort of like, “Yeah, ChatGPT is fine, too,” but like they were all about Claude Code. And I think that is exactly what OpenAI is worried about.

Because again, in theory, there could be many other opportunities for generative AI, but it feels like the big growth area, the area where the most money is and where they could at least see a path to having a sustainable business in the future, is in these enterprise and coding tools.

Anthropic’s relationship with the Trump administration seems to be thawing


Despite recently being designated a supply-chain risk by the Pentagon, Anthropic is still talking to high-level members of the Trump administration.

There were earlier signs of a thawing relationship — or a sense that not every part of the administration wanted to cut off Anthropic — with reports saying that Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell were encouraging the heads of major banks to test out Anthropic’s new Mythos model.

Anthropic co-founder Jack Clark seemed to confirm this, claiming that the ongoing fight over the supply-chain risk designation is a “narrow contracting dispute” that would not interfere with the company’s willingness to brief the government about its latest models.

Then on Friday, Axios reported that Bessent and White House Chief of Staff Susie Wiles had met with Anthropic CEO Dario Amodei. In a statement, the White House described this as an “introductory meeting” that was “productive and constructive.”

“We discussed opportunities for collaboration, as well as shared approaches and protocols to address the challenges associated with scaling this technology,” the White House said.

Similarly, Anthropic issued a statement confirming that Amodei had met with “senior administration officials for a productive discussion on how Anthropic and the U.S. government can work together on key shared priorities such as cybersecurity, America’s lead in the AI race, and AI safety.”

The company added that it’s “looking forward to continuing these discussions.”

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The dispute between Anthropic and the Pentagon seemingly began after failed negotiations over the military’s use of Anthropic’s models; the AI company sought to maintain safeguards around the use of its technology for fully autonomous weapons and mass domestic surveillance. (OpenAI quickly announced a military deal of its own, leading to some consumer backlash.)

The Pentagon subsequently declared Anthropic a supply-chain risk — a label that’s generally reserved for foreign adversaries and could severely limit the use of Anthropic’s models by the government. The company is challenging that designation in court

But it sounds like the rest of the Trump administration doesn’t share the Pentagon’s hostility, with an administration source telling Axios that “every agency” except the Department of Defense wants to use the company’s technology.

Anthropic’s rise is giving some OpenAI investors second thoughts


OpenAI’s $852 billion valuation is facing skepticism from some of its own investors as the company scrambles to reorient itself around enterprise customers and fend off Anthropic, according to the Financial Times.

Anthropic’s annualized revenue jumped from $9 billion at the end of 2025 to $30 billion by the end of March, driven largely by demand for its coding tools. One investor who has backed both companies told the FT that justifying OpenAI’s round required assuming an IPO valuation of $1.2 trillion or more — making Anthropic’s current $380 billion valuation look like the relative bargain.

The secondary market tells a similar story right now, where demand for Anthropic shares has grown nearly insatiable while OpenAI shares are trading at a discount.

Altman has been here before. During his tenure leading Y Combinator, aggressive valuation inflation left some portfolio companies financially stranded while others proved worth every penny and then some.

OpenAI CFO Sarah Friar pushed back, telling the FT that the company’s $122 billion raise — the largest private fundraising in history — was evidence of continued investor confidence. Not everyone is persuaded. Jai Das, president of investment firm Sapphire Ventures (who has no stake in either company) told the FT he saw OpenAI as “the Netscape of AI,” a reference to the once-dominant browser that was overtaken by Microsoft and eventually absorbed by AOL.

Update: This piece has been updated to remove an investor quote published and later removed by the Financial Times.

The UK government reportedly wants Anthropic to expand its presence in London


While the US and Anthropic are in the midst of a major dispute, the UK is trying to sway the San Francisco-based AI company to expand its presence on English soil. According to a report from The Financial Times, staffers at the UK’s Department for Science, Innovation and Technology have worked on proposals that include expanding Anthropic’s office in London, along with a potential dual stock listing.

The UK’s strategy follows a public fallout between Anthropic and the US Department of Defense earlier this year. After the AI company said it wouldn’t budge on certain AI guardrails, the Department of Defense pulled its contract and eventually designated Anthropic a supply chain risk. While the designation is currently temporarily blocked by a court-ordered injunction, the feud is far from over. In the meantime, the UK’s efforts to court Anthropic have ramped up in the recent weeks thanks to the company’s disagreements with the US, according to FT‘s sources.

With no end in sight for the debacle with the Department of Defense, Anthropic’s CEO, Dario Amodei, is expected to visit the UK in May, according to FT. However, even in London, Anthropic will have to compete against OpenAI, which already committed to expanding its footprint in the English capital in February.

Anthropic sues Defense Department over supply chain risk designation


Anthropic has made good on its promise to challenge the Department of Defense in court after the agency labeled it a supply chain risk late last week.

The Claude-maker filed a complaint against the Department on Monday. The complaint comes after a weeks-long conflict between Anthropic and the DOD over whether the military should have unrestricted access to Anthropic’s AI systems. Anthropic had two firm red lines: it didn’t want its technology to be used for mass surveillance of Americans and didn’t believe it was ready to power fully autonomous weapons with no humans making targeting and firing decisions.

Defense Secretary Pete Hegseth argued that the Pentagon should have access to AI systems for “any lawful purpose.” A supply chain risk label is usually reserved for foreign adversaries, and requires any company or agency that does work with the Pentagon to certify that it doesn’t use Anthropic’s models. 

Anthropic called the DOD’s actions “unprecedented and unlawful” in a complaint filed in San Francisco federal court. “The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech.”

This story is developing. Please check back for updates.

Anthropic to challenge DOD’s supply-chain label in court


Dario Amodei said Thursday that Anthropic plans to challenge the Department of Defense’s decision to label the AI firm a supply-chain risk in court, a designation he has called “legally unsound.”

The statement comes a few hours after the DOD officially designated Anthropic a supply-chain risk following a weeks-long dispute over how much control the military should have over AI systems. A supply-chain risk designation can bar a company from working with the Pentagon and its contractors. Amodei drew a firm line that Anthropic’s AI will not be used for mass surveillance of Americans or for fully autonomous weapons, but the Pentagon believed it should have unrestricted access for “all lawful purposes.”

In his statement, Amodei said the vast majority of Anthropic’s customers are unaffected by the supply-chain risk designation.

“With respect to our customers, it plainly applies only to the use of Claude by customers as a direct part of contracts with the Department of War, not all use of Claude by customers who have such contracts,” he said.

As a preview of what Anthropic will likely argue in court, Amodei said the Department’s letter labeling the firm a supply-chain risk is narrow in scope.

“It exists to protect the government rather than to punish a supplier; in fact, the law requires the Secretary of War to use the least restrictive means necessary to accomplish the goal of protecting the supply chain,” Amodei said. “Even for Department of War contractors, the supply chain risk designation doesn’t (and can’t) limit uses of Claude or business relationships with Anthropic if those are unrelated to their specific Department of War contracts.”

Amodei reiterated that Anthropic had been having productive conversations with the DOD over the last several days, conversations that some suspect got derailed when an internal memo he sent to staff was leaked. In it, Amodei characterized rival OpenAI’s dealings with the Department of Defense as “safety theater.”

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OpenAI has signed a deal to work with the DOD in Anthropic’s place, a move that has sparked backlash among OpenAI staff.

Amodei apologized for the leak in his Thursday statement, claiming that the company did not intentionally share the memo or direct anyone else to do so. “It is not in our interest to escalate the situation,” he said.

Amodei said the memo was written within “a few hours” of a series of announcements, including a presidential Truth Social post saying Anthropic would be removed from federal systems, then Defense Secretary Pete Hegseth’s supply-chain risk designation, and finally the Pentagon’s deal announcement with OpenAI. He apologized for the tone, calling it “a difficult day for the company” and said the memo didn’t reflect his “careful or considered views.” Written six days ago, he added, it’s now an “out-of-date assessment.”

He finished by saying Anthropic’s top priority is to ensure American soldiers and national security experts maintain access to important tools in the middle of ongoing major combat operations. Anthropic is currently supporting some of the U.S.’s operations in Iran, and Amodei said the company would continue to provide its models to the DOD at “nominal cost” for “as long as necessary to make that transition.”

Anthropic could challenge the designation in federal court, likely in Washington, but the law behind the decision makes it harder to contest because it limits the usual ways companies can challenge government procurement decisions and gives the Pentagon broad discretion on national security matters.

Or as Dean Ball — a former Trump-era White House adviser on AI who has spoken out against Hegseth’s treatment of Anthropic — put it: “Courts are pretty reluctant to second-guess the government on what is and is not a national security issue … There’s a very high bar that one needs to clear in order to do that. But it’s not impossible.”

The trap Anthropic built for itself


Friday afternoon, just as this interview was getting underway, a news alert flashed across my computer screen: the Trump administration was severing ties with Anthropic, the San Francisco AI company founded in 2021 by Dario Amodei. Defense Secretary Pete Hegseth soon after invoked a national security law to blacklist the company from doing business with the Pentagon after Amodei refused to allow Anthropic’s tech to be used for mass surveillance of U.S. citizens or for autonomous armed drones that could select and kill targets without human input.

It was a jaw-dropping sequence of events. Anthropic stands to lose a contract worth up to $200 million and could be barred from working with other defense contractors after President Trump posted on Truth Social directing every federal agency to “immediately cease all use of Anthropic technology.” (Anthropic has since said it will challenge the Pentagon in court.)

Max Tegmark has spent the better part of a decade warning that the race to build ever-more-powerful AI systems is outpacing the world’s ability to govern them. The MIT physicist founded the Future of Life Institute in 2014 and in 2023 helped organize an open letter — ultimately signed by more than 33,000 people, including Elon Musk — calling for a pause in advanced AI development.

His view of the Anthropic crisis is unsparing: the company, like its rivals, has sown the seeds of its own predicament. Tegmark’s argument doesn’t begin with the Pentagon but with a decision made years earlier — a choice, shared across the industry, to resist regulation. Anthropic, OpenAI, Google DeepMind and others have long promised to govern themselves responsibly. Anthropic this week even dropped the central tenet of its own safety pledge — its promise not to release increasingly powerful AI systems until the company was confident they wouldn’t cause harm.

Now, in the absence of rules, there’s not a lot to protect these players, says Tegmark. Here’s more from that interview, edited for length and clarity. You can hear the full conversation this coming week on TechCrunch’s StrictlyVC Download podcast.

When you saw this news just now about Anthropic, what was your first reaction?

The road to hell is paved with good intentions. It’s so interesting to think back a decade ago, when people were so excited about how we were going to make artificial intelligence to cure cancer, to grow the prosperity in America and make America strong. And here we are now where the U.S. government is pissed off at this company for not wanting AI to be used for domestic mass surveillance of Americans, and also not wanting to have killer robots that can autonomously — without any human input at all — decide who gets killed.

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Anthropic has staked its entire identity on being a safety-first AI company, and yet it was collaborating with defense and intelligence agencies [dating back to at least 2024]. Do you think that’s at all contradictory?

It is contradictory. If I can give a little cynical take on this — yes, Anthropic has been very good at marketing themselves as all about safety. But if you actually look at the facts rather than the claims, what you see is that Anthropic, OpenAI, Google DeepMind and xAI have all talked a lot about how they care about safety. None of them has come out supporting binding safety regulation the way we have in other industries. And all four of these companies have now broken their own promises. First we had Google — this big slogan, ‘Don’t be evil.’ Then they dropped that. Then they dropped another longer commitment that basically said they promised not to do harm with AI. They dropped that so they could sell AI for surveillance and weapons. OpenAI just dropped the word safety from their mission statement. xAI shut down their whole safety team. And now Anthropic, earlier in the week, dropped their most important safety commitment — the promise not to release powerful AI systems until they were sure they weren’t going to cause harm.

How did companies that made such prominent safety commitments end up in this position?

All of these companies, especially OpenAI and Google DeepMind but to some extent also Anthropic, have persistently lobbied against regulation of AI, saying, ‘Just trust us, we’re going to regulate ourselves.’ And they’ve successfully lobbied. So we right now have less regulation on AI systems in America than on sandwiches. You know, if you want to open a sandwich shop and the health inspector finds 15 rats in the kitchen, he won’t let you sell any sandwiches until you fix it. But if you say, ‘Don’t worry, I’m not going to sell sandwiches, I’m going to sell AI girlfriends for 11-year-olds, and they’ve been linked to suicides in the past, and then I’m going to release something called superintelligence which might overthrow the U.S. government, but I have a good feeling about mine’ — the inspector has to say, ‘Fine, go ahead, just don’t sell sandwiches.’

There’s food safety regulation and no AI regulation.

And this, I feel, all of these companies really share the blame for. Because if they had taken all these promises that they made back in the day for how they were going to be so safe and goody-goody, and gotten together, and then gone to the government and said, ‘Please take our voluntary commitments and turn them into U.S. law that binds even our most sloppy competitors’ — this would have happened. Instead, we’re in a complete regulatory vacuum. And we know what happens when there’s a complete corporate amnesty: you get thalidomide, you get tobacco companies pushing cigarettes on kids, you get asbestos causing lung cancer. So it’s sort of ironic that their own resistance to having laws saying what’s okay and not okay to do with AI is now coming back and biting them.

There is no law right now against building AI to kill Americans, so the government can just suddenly ask for it. If the companies themselves had earlier come out and said, ‘We want this law,’ they wouldn’t be in this pickle. They really shot themselves in the foot.

The companies’ counter-argument is always the race with China — if American companies don’t do such and such, Beijing will. Does that argument hold?

Let’s analyze that. The most common talking point from the lobbyists for the AI companies — they’re now better funded and more numerous than the lobbyists from the fossil fuel industry, the pharma industry and the military-industrial complex combined — is that whenever anyone proposes any kind of regulation, they say, ‘But China.’ So let’s look at that. China is in the process of banning AI girlfriends outright. Not just age limits — they’re looking at banning all anthropomorphic AI. Why? Not because they want to please America but because they feel this is screwing up Chinese youth and making China weak. Obviously, it’s making American youth weak, too.

And when people say we have to race to build superintelligence so we can win against China — when we don’t actually know how to control superintelligence, so that the default outcome is that humanity loses control of Earth to alien machines — guess what? The Chinese Communist Party really likes control. Who in their right mind thinks that Xi Jinping is going to tolerate some Chinese AI company building something that overthrows the Chinese government? No way. It’s clearly really bad for the American government too if it gets overthrown in a coup by the first American company to build superintelligence. This is a national security threat.

That’s compelling framing — superintelligence as a national security threat, not an asset. Do you see that view gaining traction in Washington?

I think if people in the national security community listen to Dario Amodei describe his vision — he’s given a famous speech where he says we’ll soon have a country of geniuses in a data center — they might start thinking: ‘Wait, did Dario just use the word country? Maybe I should put that country of geniuses in a data center on the same threat list I’m keeping tabs on, because that sounds threatening to the U.S. government.’ And I think fairly soon, enough people in the U.S. national security community are going to realize that uncontrollable superintelligence is a threat, not a tool. This is totally analogous to the Cold War. There was a race for dominance — economic and military — against the Soviet Union. We Americans won that one without ever engaging in the second race, which was to see who could put the most nuclear craters in the other superpower. People realized that was just suicide. No one wins. The same logic applies here.

What does all of this mean for the pace of AI development more broadly? And how close do you think we are to the systems you’re describing?

Six years ago, almost every expert in AI I knew predicted we were decades away from having AI that could master language and knowledge at human level — maybe 2040, maybe 2050. They were all wrong, because we already have that now. We’ve seen AI progress quite rapidly from high school level to college level to PhD level to university professor level in some areas. Last year, AI won the gold medal at the International Mathematics Olympiad, which is about as difficult as human tasks get. I wrote a paper together with Yoshua Bengio, Dan Hendrycks, and other top AI researchers just a few months ago giving a rigorous definition of AGI. According to this, GPT-4 was 27% of the way there. GPT-5 was 57% of the way there. So we’re not there yet, but going from 27% to 57% that quickly suggests it might not be that long.

When I lectured to my students yesterday at MIT, I told them that even if it takes four years, that means when they graduate, they might not be able to get any jobs anymore. It’s certainly not too soon to start preparing for it.

Anthropic is now blacklisted. I’m curious to see what happens next — will the other AI giants stand with it and say, ‘We won’t do this either?’ Or does someone like xAI raise their hand and say, ‘Anthropic didn’t want that contract, we’ll take it’? [Editor’s note: Hours after the interview, OpenAI announced its own deal with the Pentagon.]

Last night, Sam Altman came out and said he stands with Anthropic and has the same red lines. I admire him for the courage of saying that. Google, as of when we started this interview, had said nothing. If they just stay quiet, I think that’s incredibly embarrassing for them as a company, and a lot of their staff will feel the same. We haven’t heard anything from xAI yet either. So it’ll be interesting to see. Basically, there’s this moment where everybody has to show their true colors.

Is there a version of this where the outcome is actually good?

Yes, and this is why I’m actually optimistic in a strange way. There’s such an obvious alternative here. If we just start treating AI companies like any other companies — drop the corporate amnesty — they would clearly have to do something like a clinical trial before they released something this powerful, and demonstrate to independent experts that they know how to control it. Then we get a golden age with all the good stuff from AI, without the existential angst. That’s not the path we’re on right now. But it could be.



Know What Else Used a Lot of Energy? Human Civilization



At last week’s India AI Impact Summit in New Delhi, industry leaders convened to discuss the future of artificial intelligence and how best to squeeze it into parts of your life you haven’t even considered. Notably absent was Bill Gates, who dropped out hours before his scheduled keynote over the ongoing scrutiny about his presence in the Epstein Files (though he continues to deny any wrongdoing). While the convention was reportedly a bit chaotic, what with the protests and all, the luminaries from around the tech world present nonetheless kept things upbeat and optimistic, declaring “full steam ahead” on the technological hype train carrying our species and planet off a cliff.

Also in attendance was OpenAI’s Sam Altman, who earned numerous headlines over the course of the event for his words and antics. His buzz blitzkrieg started on Thursday at a seemingly easy photo-opp layup with Indian Prime Minister Narendra Modi and other AI executives all raising their joined hands in a celebratory display of industry-wide solidarity. Altman and the former colleague and present CEO of Anthropic to his left, Dario Amodei, notably refused to complete the chain and hold each other’s hands, making for an all-too-poignant moment. Altman would continue to make news throughout the summit for his comments on the industry’s “urgent” need for global regulation and his sneaking suspicion that companies might actually be using AI as a scapegoat to whitewash their layoffs.

Ever the yapper, Altman has bagged yet another round of earned media for an interview with The Indian Express’ Anant Goenka, during which he posited some controversial rebuttals to concerns about AI’s environmental impact.

Altman started off by saying the claims about ChatGPT consuming “‘17 gallons of water for each query’ or whatever,” are “completely untrue, totally insane, no connection to reality,” before qualifying that, OK, maybe it was a valid concern when his company “used to do evaporative cooling in data centers.”

He went on to say that there is “fair” concern about the amount of energy data centers eat to crank out the most soulless slop you’ve ever seen, but suggested the onus of responsibility for dealing with AI’s ravenous appetite falls to the energy sector itself, which Altman feels needs to “move towards nuclear or wind and solar very quickly.”

Altman then stunned the crowd and firmly re-entered the discourse with a mind-blowing truth bomb for those who still felt AI was consuming too much energy.

“It also takes a lot of energy to train a human,” Altman rejoined euphorically. “It takes like 20 years of life, and all the food you eat before that time, before you get smart. And not only that, it took like the very widespread evolution of the hundred billion people that have ever lived and learned not to get eaten by predators and learned how to figure out science and whatever to produce you, and then you took whatever you took.”

It is true that every person and the sum total of human civilization have consumed a sizable amount of energy (and water) to get to where we are today. While the value comparison of a nascent tech industry and its models to the entirety of civilization and human beings may have elicited adulation at the summit, Altman got an icier reception from the internet. Social media quickly took to roasting the remarks as “dystopian” and “deeply antisocial and antihuman.”

Perhaps further illuminating the backlash, Altman’s energy comments butt up against the frustrating lack of transparency within the industry our collective futures now hinge upon. There are currently no regulations in place requiring data centers to disclose their water and energy consumption. Furthermore, center employees and business partners are typically muzzled by nondisclosure agreements. This has made reporting and research on the true expenditure levels a tricky figure to pin down.

At least we’ve got Sam to keep us informed while waiting for some clarity about what’s actually going on and being used in those centers.

The creator economy’s ad revenue problem and India’s AI ambitions


The creator economy is evolving fast, and ad revenue alone isn’t cutting it anymore. YouTubers are launching product lines, acquiring startups, and building actual business empires. In fact, MrBeast’s company bought fintech startup Step, and his chocolate business is outearning his media arm. This isn’t just one creator’s strategy. For many, it’s the new playbook. 

On this episode of TechCrunch’s Equity podcast, hosts Kirsten Korosec, Anthony Ha, and Rebecca Bellan unpack how creators are diversifying beyond ads, whether their model can scale beyond the top 1%, everything happing at India’s AI Impact Summit, and more of the week’s headlines.

Sequoia to invest in Anthropic, breaking VC taboo on backing rivals: FT


Sequoia Capital is reportedly joining a blockbuster funding round for Anthropic, the AI startup behind Claude, according to the Financial Times. It’s a move sure to turn heads in Silicon Valley.

Why? Because venture capital firms have historically avoided backing competing companies in the same sector, preferring to place their bets on a single winner. Yet here’s Sequoia, already invested in both OpenAI and Elon Musk’s xAI, now throwing its weight behind Anthropic, too.

The timing is particularly surprising given what OpenAI CEO Sam Altman said under oath last year. As part of OpenAI’s defense against Musk’s lawsuit, Altman addressed rumors about restrictions in OpenAI’s 2024 funding round. While he denied that OpenAI investors were broadly prohibited from backing rivals, he did acknowledge that investors with ongoing access to OpenAI’s confidential information were told that access would be terminated “if they made non-passive investments in OpenAI’s competitors.” Altman called this “industry standard” protection (which it is) against misuse of competitively-sensitive information.

According to the FT, Sequoia is joining a funding round led by Singapore’s GIC and U.S. investor Coatue, who are each contributing $1.5 billion. Anthropic is aiming to raise $25 billion or more at a $350 billion valuation — more than double its $170 billion valuation from just four months ago. The WSJ and Bloomberg had earlier reported the round at $10 billion. Microsoft and Nvidia have committed up to $15 billion combined, with VCs and other investors said to be contributing another $10 billion or more.

The Sequoia connection with Altman runs deep. When Altman dropped out of Stanford to start Loopt, Sequoia backed him. He later became a “scout” for Sequoia, introducing the firm to Stripe, which became one of the firm’s most valuable portfolio companies. Sequoia’s new co-leader Alfred Lin and Altman also appear comparatively close. Lin has interviewed Altman numerous times at Sequoia events, and when Altman was briefly ousted from OpenAI in November 2023, Lin publicly said he’d eagerly back Altman’s “next world-changing company.”

While Sequoia’s investment in xAI might seem to have already contradicted the traditional VC approach of picking winners, that bet is widely viewed as less about backing an OpenAI competitor and more about deepening the firm’s extensive ties to Elon Musk. Sequoia invested in X when Musk bought Twitter and rebranded it, is an investor in SpaceX and The Boring Company, and is a major backer of Neuralink, Musk’s brain-computer interface company. Longtime Sequoia leader Michael Moritz was even an early investor in Musk’s X.com, which became part of PayPal.

Sequoia’s apparent reversal on portfolio conflicts is especially glaring given its historical stance. As we reported in 2020, the firm took the extraordinary step of walking away from its investment in payments company Finix after determining the startup competed with Stripe. Sequoia forfeited its $21 million investment, letting Finix keep the money while giving up its board seat, information rights, and shares, marking the first time in the firm’s history it had severed ties with a newly funded company over a conflict of interest. (Sequoia had led Finix’s $35 million Series B round just months earlier.)

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The reported Anthropic investment comes after dramatic leadership changes at Sequoia, where Roelof Botha was pushed out in a surprise vote just days after sitting down with this editor at TechCrunch Disrupt, with Lin and Pat Grady — who’d led that Finix deal — taking over.

Anthropic is reportedly preparing for an IPO that could come as soon as this year. We’ve reached out to Sequoia Capital for comment.