New York City Comptroller Mark Levine Talks Anthropic IPO

SPEAKER_1 (0:02)

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Jonathan (0:07)

Let's get to the most read letter on Wall Street in the last 24 hours. The New York City Comptroller, Mark Levine, calling for Anthropic to pause its impending IPO over AI safety concerns, writing in a letter addressed to Anthropic CEO, Dario Amadei, quote, instead of proceeding headlong with its IPO, the company should focus its energies on addressing these unprecedented risks. Mark Levine joins us now for more. Mark, good morning. Good to see you.

Mark Levine (0:31)

Jonathan, Emory, thanks for having me.

Jonathan (0:33)

Thanks for making time for us. What prompted the letter? Let's start there. What changed for you?

Mark Levine (0:36)

This is a company building a technology that poses a potential existential threat to humanity. Those are not my words. Those are the words, reportedly, of the S1 that they have published. They also do not claim to have solved that problem.

Posing risk for investors, and I am an investor, a shareholder, and we will be a bigger one in CISCO's public. We will talk about why that is.

And IPO is about the most all-consuming thing that corporate leadership could go through. It will dominate their lives. It will distract from the safety work. And then once they are public, there will be new pressures, pressures for growth, pressures for profits that will continue to push against the safety work. And we do have skin in the game in the New York City pension funds. We have a little bit in the private market right now, but because we assume the indexes are going to rush them in, SpaceX opened that door. We are huge passive investors. We have like $120 billion in passive investments. We track the Russell 3000 We are then going to become potentially within days, major owners of this company. So we have a stake here, and we want them to take their time, deal with the safety work, mitigate the risk, let investors know we can be confident, and then proceed.

Jonathan (1:47)

They know that too. So how much leverage do you have when they know that ultimately you'll be biased if they go public?

Mark Levine (1:54)

Look, I think we have probably more leverage now. It's why I'm speaking out. Once they go public, we will be shareholders. It's true. Shareholder powers have been diluted in this era, unfortunately. I don't think we know all the details on the governance structure of Anthropic. For SpaceX, shareholders were totally disempowered.

We are still very upset about that. This is like an accelerating trend, particularly in tech companies.

But we're still going to advocate at that point.

But I'm speaking out now because I think there's still time to address these issues. Yes, we have the White House Accord, a step forward. A few years ago, we probably would have thought that was a big deal, but it is non-binding.

There's no timeline. So what? They have 10 years to implement it, and it leaves a lot out, which I'm hearing from other investors, like what are the tripwires on safety? What are the capability thresholds you're worried about with bio and cyber, etc.? Is there any governance structure that would allow someone to hit the stop button, even if there is pressure from competitors? I don't have those answers. Investors don't have those answers. You want that kind of transparency before you hit the public markets.

Jonathan (3:02)

Has the company responded?

Mark Levine (3:03)

We did hear from them yesterday. I can't say there's a lot of substance yet, but we have a lot of communication open.

Jonathan (3:09)

Well, what was their initial reaction? What did they say?

Mark Levine (3:13)

I don't think I can characterize the discussions yet, but they are...

Jonathan (3:17)

Do you find that it was hopeful to your cause?

Mark Levine (3:20)

I don't know yet, but it does appear they're under pressure from multiple sides right now.

Jonathan (3:24)

So you don't actually have direct legal or regulatory authority to stop an IPO?

Mark Levine (3:28)

We do not, but we are one of the largest public investment funds in America and the world. We're close to a third of a trillion dollars.

We own everything in the global economy. And more than that, we're teaming up with other like-minded public pension investors. And so I think we do have influence, and I hope we're heard.

Jonathan (3:47)

Do you think that influence is going to mean action? Do you genuinely think they're going to postpone it?

Mark Levine (3:52)

I don't know. And I'll tell you another reason why I really hope so. If they go public, and then there's a catastrophic safety incident beyond, far beyond what we've seen right now, that would be terrible for their stock. And I worry that it could then reverberate throughout the markets. Some people are making the opposite point, that if they delay their IPO, then it could, that itself could be a problem for the market. And if there's frothiness, that could be the trigger. I worry about going public and then having an incident.