Alex Kantrowitz, Big Technology founder, joins 'Closing Bell' to discuss Kantrowitz' thoughts on Anthropic, the ways to think about AI models and much more.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Alex Kantrowitz, speaking on CNBC, highlighted Anthropic as a leading company in the generative AI sector, noting that over half its business comes from providing API access to other companies. Anthropic's rapid revenue growth, now at a multi-billion dollar run rate, is seen as an indicator of the broader generative AI market's health, particularly in enterprise and coding applications. 

Kantrowitz emphasized that Anthropic's distinct approach, especially its strength in coding models, sets it apart from competitors like OpenAI. He also discussed CEO Dario Amodei's strong belief in the accelerating progress of AI and his balanced focus on both the technology's potential and its risks. The conversation concluded by noting that the industry's willingness to invest heavily in AI infrastructure is driven by observed improvements in model performance as computational resources increase.

As Anthropic goes, so goes generative AI trade, says Alex Kantrowitz

He's joining me now to discuss his big technologies, Alex Kantor, it's right here, Alex, thanks for coming on to kind of preview all this with us. Situate Anthropic for us a little bit in terms of what they, where they sit within all the different models, what people find good uses for, and how they're, I guess, distinct from other players. So, I view Anthropic as the most interesting generative AI company, and that's because more than 50% of their business is run through the API, or other companies paying to use their models and then put it into their workflows, or to help with, like, report generation, for instance. So, as Anthropic goes, so goes the generative AI trade, because other companies, like OpenAI, they have ChatGPT, it's a consumer application. If the technology isn't good, Anthropic's business is not going to go anywhere. And as Amodei said in the clip just before, the business is growing. They went from one billion last year to this month, they have a four point, maybe four point five billion dollar run rate. So, I think that we can assess whether generative AI is working, and there are some early signs it's happening within enterprises, and it's happening within coding. In terms of where they sit in the entire industry, they have the best coding models, so they are the company that engineers are flooding to, to try to figure out how to use AI in their workflows to code, and also these coding applications, like Windsurf, like Cursor, they're using Anthropic models in a big way to help engineers code. So, that would imply that it's not, that all of these models are not just kind of redundant, right? They're not all essentially building the same thing and just kind of trying to race for the head start in terms of market share, is that right? I mean, is that the way to think about it? That's absolutely right. So, the companies train their models in different ways. And Amodei talked about trading to code. The reason why they wanted to train it to code is because if they got good at it, that meant that they could build their models faster because the people inside would use it. And if they had a working product, they assumed that software engineers would adopt it quickly because they're looking at this technology every day. And that's definitely been a bet that's paid off for them. I guess another way that some of these AI players differ is their assessment of exactly how fast and how big it's going to change the world, and whether it's dangerous or whether it's all upside from here. Where does he sit with that? I know he's gotten a lot of attention in terms of the potential economic disruption of AI. So he is the purest believer, I think, of all the AI lab CEOs that this stuff is going to get better fast. His career is a progression of seeing AI work in different scenarios and seeing a law where you make the data centers bigger, you add more compute, you add more data, you make bigger models, you're going to get predictable improvement. He saw it at Baidu when he was there. He saw it at a bit at Google, but really at OpenAI and now Anthropic. So I don't think there's any believer in the technology bigger than Dario Amodei. Now, I think he wants people to see the positive benefits of this. But if you believe that it's going to accelerate and become better the way that it is and as fast as it is, you start to get freaked out about where it could go wrong. And that's why we hear Amodei talk all the time about the risks here. I don't think it's because he's a doomer. He denies being a doomer. A doomer is somebody who thinks that AI is going to kill us all. I don't view him that way. But I do think that there is a good focus there and saying, hey, listen, you know, there might be some problems here. Let's focus on them so we can see the full benefits of this technology as we roll it out. There is a skeptical take on that, you know, oh, look out, it could be dangerous type of a type of a line, which is that's pretty good marketing. Like this stuff is so powerful. We just don't even know where it can go next and therefore, you know, invest with us, ride the train before it leaves. Yeah, it's excellent marketing. I think there's two sides to it. It's like one of those things where if you say look out and the problems don't materialize, you know, maybe you've got Novo Nordisk to use your software. But then again, if you look at the progression here, and I'm not saying it's going to cause any trouble, but if you go from where Chachapiti was in 2022 to where we are today, you see a very quick progression in capabilities. And I'm not going to fault him for saying maybe there's a problem because there's been so many times in technology where the problems have been ignored in the outset and then they emerge later because no one was paying attention to them. And I think in AI, you know, Amodei and others are saying, hey, let's pay attention to this before it explodes. I think that's good. I guess this sort of open endedness of just where it could go helps explain the way the overall market right now is willing to pay a premium and give credit to both the big companies that are spending the tens of billions of dollars a year on these data centers and put the same multiple on Nvidia that's collecting the money. I mean, it's kind of an amazing thing for while it lasts. Yeah, it is bananas. I think if you go to the heart of Amodei's story and really many of these lab story, you see why this is happening. And again, it goes to this idea of the scaling law, which isn't really a law. It's just an observation that you put more compute, you get better results. And we've seen some better results from companies like XAI with their Grok model, which did very well on the benchmarks despite having a slow start. They came to the game late, but they built massive data centers with lots of GPUs and they were able to train a competitive model. So the thinking here is if you have people who are who've been working on this for a long time and you add that scale, so they have the scale, they have the efficiency, the better algorithms, how smart can that get? And I think the entire market and the entire industry is saying, well, we're going to find out.

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As Anthropic goes, so goes generative AI trade, says Alex Kantrowitz

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