👀 Imminently

SCOREBOARD

Monday close. S&P down 0.5%, Nasdaq down 1.1%. On the week: Nvidia −6.5%, S&P −1.8%, Nasdaq −3.8%. Prices via CNBC.

ON WATCH

Anthropic, the company behind Claude, added a new warning to its stock market paperwork on Monday. The revised filing, its S-1/A, says its AI could soon be speeding up its own research faster than Anthropic can make it safe.

"Our internal estimates," it says, show Anthropic "may imminently meet" its own bar for "dramatically accelerated progress attributable to AI". That's the line it drew for AI that drives its own development, what researchers call recursive self-improvement.

The filing also admits Anthropic has "in the past not identified" a big jump in its own progress until after it had happened. Gizmodo noticed the "imminently" passage is new since the 26 October version.

Anthropic says none of its current models has crossed the line, and it continues "to assess the underlying data". To be fair, it also says it won't let Claude build its own successors "without meaningful human supervision", and it's considering updates to its safety policy to keep humans in control.

The warning sits in the document investors will read before buying shares at a valuation reportedly pitched around $1.5 trillion. TechCrunch notes that skeptics see a filing like this as part disclosure, part sales pitch.

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THE MACHINE

Oracle sold $10 billion of new shares on Monday night at $116 each, about 11% below Friday's close, alongside $10 billion of bonds. Its stock fell 8.8% to $119.22 on Monday, and it's down by half over the past year.

The money pays for AI data centres, on top of the $125 billion Oracle already owed at the end of August. Insurance against Oracle not paying its debts now costs about what a high-end junk-rated company pays, CNBC reports.

Let Meerkat translate. When a company sells new shares, everyone who already owns one ends up with a smaller slice of the cake.

Set against that, Oracle has a $664 billion backlog of signed contracts, up $209 billion in a year. Oracle says this $20 billion is the last outside money it'll raise through its 2030 financial year, with cash flow turning positive in the second half of 2028.

SOMEONE SMART SAID

Ternus, who took over from Tim Cook in September, said it on his first results call as boss. Apple expects to keep 45% to 46% of each sale as gross profit this quarter, down from 47.9%, and says memory chips are most of the reason.

Memory makers have moved factories over to the chips that AI data centres buy, and one analyst on the call said Apple now competes for supply with well-funded buyers signing long-term deals. Apple already raised prices on Macs and iPads in June and on iPhones in September.

Ternus said memory prices will keep rising beyond December. Apple added $33 billion of purchase commitments in a single quarter to lock in supply.

THE CHART

Blackstone's president, Jon Gray, said on Tuesday that the AI building boom needs more money from shareholders and less from lenders. Lenders only get their interest back, he said, while they carry more and more of the risk.

On the same panel in Hong Kong, Pimco's chief executive Emmanuel Roman put this year's AI debt at about $550 billion. "At some point in time, it's going to be too much," he said.

The private equity firms Gray means are already sitting on about $3.7 trillion of companies they haven't sold, nearly double 2019's pile, by Bain's count. Until they sell, there's less cash to hand back to their investors and put into data centres.

Then again, Gray says AI spending across Blackstone's own companies rose 20-fold in a year, and demand for computing is "running well ahead of supply".

HEADS UP

ON THE HORIZON

MEERKAT ON YOUTUBE

The OpenAI Situation Has Wall Street Panicking! OpenAI loses about $2.60 for every $1 it earns, and Wall Street still wants more of it. Meerkat follows where those losses end up, from your electricity bill to your taxes. Watch on Meerkat Explains.

THE BURROW

Quick vote. Anthropic says its AI could soon speed up its own research faster than the safety checks. What should happen?

Trivia. Oracle's name partly comes from the codename of a 1977 database project for its very first customer, a US government agency. Which one? Answer's at the bottom of the email. No peeking.

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TRIVIA ANSWER

The CIA. Oracle's founders got permission to reuse the codename of a CIA database project as the name of their product.