Happy Sunday. Not the best week in Tech land. QQQs -1.8% underperformed Semis -1% although the emotional and portfolio drawdown was considerably larger for most.
Let’s start where we left off last week: Lab ARRs. Last week, we wrote about how the AI trade has increasingly become about Lab ARRs and why. Over the past couple of weeks, investors have increasingly come to appreciate this risk, which has led to a continued compression of multiples. On Monday, we thought a well-received Anthropic S-1, coupled with some better financing news and positive tea leaves around Oct’s ARR # cleared the slate short-term for the AI trade. That lasted less than 72 hours; we know what happened after that.
Then post-close Friday we got the news that Open AI is slashing its latest funding round by $10B, now seeking $20B at $1.25T vs. $30B at $1.4T. WSJ makes it sound worse saying OpenAI has only secured ~$11B in commitments so far.
A very good thread in TMTB Slack here discussing the development. A few se…