00:00I think the last time we spoke was maybe around SpaceX's IPO and let's just say there were some
00:04serious governance concerns there. I know Anthropic, at least in terms of its sheen,
00:10if you will, is maybe not as problematic, but I guess is it? Because I was taking a look here.
00:15If you buy into this stock, you will get one vote class, A shares, a trust of three people
00:21who will own no stock, will then elect a majority of the board, and the new founders
00:25apparently are going to add super voting shares. What exactly are you buying into here if you buy
00:31into Anthropic other than just price appreciation, hopefully? I hope for a price appreciation.
00:37You know, I kind of love that they're going in the opposite direction from SpaceX,
00:43but if I could use their terminology, I'll just say their code's a little buggy.
00:48They're doing some things that have never been tried before and that I think they're missing
00:52some very important speed bumps that are ahead of them if they want to keep going in this direction.
00:59Yeah, as you said, they've got this advisory committee that ultimately will select the majority
01:06of the board, but who is the advisory committee? And saying that they don't have any stock in the
01:12company is kind of a double-edged sword. Yes, you want them to be objective, but you also want them
01:15to care. They've just added Ben Bernanke to that committee. That seems nice, but I'm not sure what
01:22kind of expertise he brings other than an overall background in economics. You know, in a way,
01:27if I can switch metaphors a little bit, it's kind of a duck-billed platypus. They've taken one piece
01:32from public companies and capitalism and one piece from non-profits. They are registering as a public
01:39benefit corporation, which kind of cares a lot about shareholder value and kind of doesn't.
01:45And they've overlooked what I would consider to be sort of the core indicators of genuine commitment
01:51to the shareholders. Well, I am curious about this trust. And it's three people, which is,
01:56you know, I don't know. You know, you have a company that's going to have a valuation
02:00of at least a trillion, I think closer to two trillion based on our estimates. And you have
02:04three people that effectively are going to have final say, or at least the full veto power over that.
02:10I mean, why? Exactly. As I said, they are not invested in the company. So they can be
02:18very theoretical if they want to. And I have a feeling with the super voting shares that you
02:24just mentioned, that that authority may not be as robust as they are suggesting.
02:31Well, this also gets to the idea, too, of, you know, the idea of, you know, just whether some of
02:36these corporate governance issues we talk about are going to matter, I mean, in the future. I mean,
02:41we have a lot of companies out there already that are effectively controlled by their founders,
02:45publicly traded companies. We just had SpaceX come to market, Anthropic. There's another one
02:51I'm forgetting. But these are companies now, it's not just about control. I mean, they're basically
02:55writing in clauses here that you can't even remove the founder, remove the head of this company
03:00through any sort of normal mechanism. It's basically, he's there and it is all he's right now. He's
03:06there until he decides to leave. Yeah, it's basically emperor for life. And let's assume
03:12for a moment, let's talk about Elon Musk. Let's assume for a moment that he is that great, that
03:16unique, that special. Something happens to him, then what? Are his 14 children going to run the
03:22company? You know, you've got to have some kind of CEO succession plan or the board has utterly failed
03:27at really its most important job. Do you think that, I mean, similar to there was all the talk about
03:33SpaceX getting fast-tracked into the indices, given its outsized importance, and we're going to see
03:39something similar with Anthropic and maybe OpenAI when they come to market?
03:44Yeah, that's why I think it's very, very interesting. You're not going to keep your eye
03:48on the New York City pension funds. I think the other pension funds are going to follow suit.
03:53They've put out an RFP for some other indexes. And I think, you know, that's the market responding,
03:59the way markets respond, saying this isn't working for us. One other interesting thing that I'm
04:03looking for, and we should just point out, we're still waiting for the actual, the full S1 here,
04:07so we can kind of really sort of see what's going on behind the company. But the expectation is that
04:12we are going to see a disclosure about the risk of the backlash, the public backlash to AI in
04:19Anthropics S1 filing. This idea that there's been huge pushback on data centers now, particularly in
04:24this election year. And I'm curious, from a disclosure standpoint and a potential investor
04:29standpoint, is that sort of the candor that you want? And more importantly, does it become maybe
04:35an impediment for someone to buy the stock? Yeah, listen, when you've lost Governor Abbott,
04:43you've really lost the battle. They're going to have to come up with some other way of going about
04:48the tremendous data needs that they have and energy needs that they have. So yeah, that is a very,
04:55very serious concern. And I think that part of this unusual structure is an attempt to address that.
05:00And perhaps we'll see if that's true when they come forward and say, we're not going to externalize
05:04our power costs. We're not going to externalize the water costs. This is what we're going to do to
05:09give back to the community and make sure that we are not a net drain.
05:13If we do get a shift in rules at the SEC with regards to quarterly reporting and this move
05:20potentially to semi-annual, it raises a lot of questions about transparency, even before we got
05:25into these issues with some of these new companies coming to market. But you have companies coming to
05:29market now with these board and leadership structures, a certain degree of opaqueness that
05:36we didn't necessarily see before. And if they do adopt a semi-annual structure,
05:42is that just going to completely leave a lot of investors in the dark?
05:45No, I think that's going to cause a lot of investors to leave. I think that's exactly the
05:50kind of thing that the market is very good at responding at. And let me point out that the
05:54proposal at the SEC to get rid of the quarterly requirement got almost 200,000 comments, of which
06:0199.5% were against. So they're going to have a tough time getting that rule through.
06:07So you don't, oh, you don't think so?
06:10I don't think so. Let me put it this way. If they do push it through, it will be an
06:15easy
06:15challenge in court because that's not what regulatory agencies are supposed to do. They're
06:19supposed to respond to the comments.
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