Why Anthropic Is Giving Away 20% of Its Equity (And Why Everyone's Mad)

SPEAKER_1 (0:00)

Anthropic just gave away 5% of their company to you. And everyone seems to be mad about it. Now, at their rumoured $2.2 trillion IPO valuation, that's around $100 billion, which is the largest philanthropic raise of capital ever. That's more than the Gates Foundation ever raised. That is more than the entire GDP of Costa Rica, and is enough money to run NASA for four years straight. So you might be wondering, why on earth is everyone mad about this? Well, there's a few reasons. Number one, the shares don't actually go to you or the public directly. It goes to a mixture of NGOs, charities, and in some cases, and I quote, specific populations of people. Who they are is up to Anthropic, so that's a little bit murky. But there's also a more unsettling reason, which is something Dario Amodei has spoken about at length over the last couple of years, which is AI might wipe out a huge number of jobs. His quote was 50 percent of white-collar jobs over the next one to five years. In the event of that happening, it is uncertain what the purpose of humanity or individual humans will be, or more importantly, how they will make a living to sustain themselves. In the event of that, we would need to introduce something along the forms of universal basic income which would be a dividend or a payout that comes in the form of a monthly salary or stipend to individuals, so that they will be able to pay for things like groceries and keep themselves going. Now, this concept might seem dystopian to some. It certainly feels dystopian to me. We're going to unpack all of this, what exactly Anthropic is doing, and why this is actually part of a broader trend that we're seeing amongst all the leading AI labs, which may signal that this isn't something that we can necessarily stop. So, let's get into it on today's episode brought to you by Qualcomm.

First, I think it's important to define what Universal Basic Income even is. Think of it as like a regular cash payment to every individual on Earth. So, the universal part of Universal Basic Income literally means to anyone and everyone. Now, the basic refers to just enough money for people or that individual to maintain their basic level of living. So, paying for things like groceries, rent, stuff like that. And then, income indicates that it's going to be a regular form of payment. So, something that you might receive monthly like a salary or bi-weekly like a salary. And this isn't a novel concept. This has been spoken about for decades and decades. But Sam Altman back in 2021 actually raised this for the first time when he introduced something known as the American Equity Fund. And the concept behind this was it would be a tax, a 2.5% tax, I believe, on the biggest companies that benefit from AI in the future. And the idea here is this tax or this fee would be paid directly to individuals within that economy, within that nation or all over the world. And at the time, that meant that $13,500 would go into the pockets of every single American every single year. But he also tested this concept over the following three years up until 2024, where he gave 1000 low-income Americans $1,000 each every single month. And the results of that show things that you may not have expected, where people just ended up becoming a little more lazier or they didn't really strive to create anything that new. Now fast forward to 2025 of last year, and Dario Amodei introduces his infamous piece on AI basically wiping out 50% of white collar jobs over the next one to five years. And his reasoning then was to introduce something known as a 3% token tax, which would function similarly to what Sam Altman proposed four years earlier. And then we had earlier this year, OpenAI converting their structure into some form of a nonprofit, which roughly holds enough equity that I think is attributable to $135 billion. And the idea of this is sort of similar to what Anthropic has just proposed, a public benefit corporation that will feed shares or the value that this company eventually ends up generating to the public good. But then the question becomes, what's different about Anthropic's proposal? So it starts off with saying that Anthropic has created a wholly separate entity for the public benefit and that they are committing, subject to board approval, 5% of their entire company, so in equity, to this company. Now, this company is structured as an LLC, not a public benefit corporation, and the reason cited for this is flexibility. It would give Anthropic the ability to give in many different ways.