AI Fact or Fiction: The Fable Ban, Tokenmaxxing, Saaspocolypse — With Ara Kharazian

**Alex Kantrowitz** (0:00)
How much are companies actually spending per employee on AI? Is AI winner take all? Is SaaS dead? And is Anthropic screwed after the Fable 5 dust up with the White House? Let's get to the bottom of these questions, separating fact and fiction with ramp lead economist, Ara Kharazian, right after this.

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**Alex Kantrowitz** (1:19)
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**Ara Kharazian** (2:45)
Great to talk to you again. Great to be on the show for the first time.

**Alex Kantrowitz** (2:48)
Yes, first of many, I'm sure. So let's talk right off the bat about what we can anticipate the impact of the government's Fable 5 export controls on Anthropic's business to be, right? Because we've seen a version of this before with the Department of Defense naming Anthropic a supply chain risk.
This is obviously on a bigger scale, and even if they go back on the band, there might be some impact. I keep calling it a band. Go back on the export controls, which is effectively a band. There may be some impact here. What can we expect?

**Ara Kharazian** (3:24)
Well, you're right to look at the Department of Defense decision from earlier this spring as the closest recent example that we might use to inform how it's going to affect Anthropic's business or business adoption going forward. Let's go back to this spring when the Department of Defense labeled Anthropic a supply chain risk, usually in most industries, for most software vendors, when you are labeled as such, businesses are not likely to continue to use that vendor going forward. If you're just going to think about this from first principles, we would have expected businesses to shut off their Anthropic subscriptions for new businesses to not want to sign up, for businesses to explicitly not want to use Anthropic going forward, both because of a true security concern that the government is citing and because they might want to engage with the government on government contracts. That's not what happened earlier this spring. If anything, this spring was when we saw Anthropic's adoption really accelerate with businesses. It was coming off the heels of the successful launches of Cloud Code last year, finally starting to move into a more popular posture with non-technical users and just this past month, we showed that Anthropic is now the most popular AI model used by US businesses according to RAMP data. Several of those assumptions didn't come to be. I think two main reasons why. One is that most businesses didn't really seem to take the Department of Defense's label very seriously. It was like, okay, yeah, the Department of Defense is saying this, but this was one of the best models available, still is the best model available. It's popular with businesses. The second reason is that the Department of Defense lost a lot of credibility over the continuing weeks when it acknowledged that it would be issuing exceptions both internally and externally for businesses that wanted to use Anthropic anyway. So if you're going to go back to the example from earlier this spring, if anything, it's probably the case that the Department of Defense's supply chain risk labeling accelerated Anthropic's adoption with businesses.