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Comment by bibabaloo | Hacker News Reader

Looking online I see reports that FTX owes its creditors $3B. If Anthropic has 6.5x then the initial $500 million is now worth $3.25B.

Is it actually possible that all creditors will get their money back? Pretty crazy if so.

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Much like the infamous FTT token, just because it’s worth that much on paper doesn’t mean that is what you could sell it for today. I say this as a person with chunks of stock in a few private companies.

And obviously for the people impacted, it’s quite a loss to get all your money over a year after you tried to withdraw it, even if you do get it all.

I am fairly confident there is private money that would gladly buy 3.5 billion worth of anthropic at the current price

But 100%, it's not just about getting repaid. Yes that helps, but not having your money last year might have mattered to some ftx customers

In a slightly different universe, the literally criminal risk might have worked a little longer.

Then again, GenAI perhaps undermines the notion of NFTs and "digital art/assets as valuable fungible commodities." It was really wierd seeing Stable Diffusion take off as NFTs were collapsing... so maybe there is no universe where FTX fakes it until they make it.

Keep in mind that "NFTs representing digital art" are a subset of what NFTs are. GenAI might have impacted art tokens, but wouldn't affect NFTs as a whole.

That’s right, NFT’s are a tool for low talent charlatans to grift at scale off of laypeople by claiming they will make money buying them. The digital art was just one such con.

The concept of NFTs for art is pretty new. I first heard about the idea of NFTs in 2013 and that was using them for things like deeds to land and vehicles.

... which remains a terrible idea, because what happens to your land or vehicle if you lose your keys / forget your pass phrase? Or if someone else phishes you?

which is incredibly stupid because a nft is fundamentally incapable of solving these challenges (owning the nft means nothing if a court determines someone else owns the house)

what about an org that issues them as e.g. season tickets, and makes a market for them?

The whole idea of GenAI is to make purely digital content "cheap."

And that's basically NFT's niche, as I understand it. Why bother commoditizing the digital space when (according to GenAI acolytes) digital scarcity is going to disappear anyway?

I dunno about NFTs representing real world assets either. It feels like the order is fundamentally lost once that jump to the real world made.

> digital scarcity is going to disappear anyway?

Digital scarcity is an artificial creation of copyright law, bought by people who had a vested interest in porting analog rules over to the new world after the infinitely error-free replicability of digital goods threatened their profit model. If generative AI puts them back in the same quandary, they will simply buy more laws and continue protecting their wealth.

Copyright law has the exact same purpose for digital goods as it did for physical books. Copying books has not really been hard since the 1450s or so. Copyright has always been about maintaining the value of books and other art works in the face of vastly cheaper copying.

The only important difference between physical copyright and digital copyright is the fact that you aren't allowed, in most jurisdictions, to sell on your legally obtained digital copy of something the same way you are for a physical copy. And even this is understandable.

The big problem with copyright is not the existence of it. It's the absurd terms it has gotten to. If copyright maxxed out at, say, 10 years, or even 20, we would live in a much better place than either today or even than a world with no copyright at all.

If I'm a creditor in FTX, it's a pretty big gamble, and I'm definitely not sure I'd be willing to settle for "sure, give me some shares in some AI company...". A significant chance that value craters, after all.

As long as you’re able to sell those shares immediately, a bunch of money loaded investors will be waiting to get your fraction of the AI pie from you.

I think that’s the most likely outcome: look for a buyer willing to take all the shares at market value, but also willing to offer shares to creditors willing to keep some Anthropic at a private valuation. Not sure if there’s a risk they’ll be more than a thousand people, triggering the need for an IPO — which presumably Anthropic would oppose.

> As long as you’re able to sell those shares immediately

You can't. Trades in even the most liquid private companies can still take weeks to close, if not longer. Add on the transfer restrictions that Anthropic almost certainly has, and you're going to be holding those shares for a long time.

Bankruptcy must have powers though. In theory a corporation/trust could carry on owning those shares and then that entity gets sold on.

you would settle for cash after the FTX trustees sell those shares on private secondary markets

Can a $3B nominal stake in Anthropic actually be liquidated for $3B?

Openly, and all at once? No chance whatsoever.

AI market is hot. What makes you say that: no one has that kind of cash?

Well, the most obvious problem is that Anthropic isn't a publicly traded company.

It can be privately traded.

why do you assume that? Many stocks have riders to prevent private trading.

I’m assuming, given the circumstances, that you can ask all the investors if they are willing to help.

What do you mean Buy help? Do you mean ask investors like Google if they want to purchase another 3 billion of shares from the FTX creditors?

Lots of investors want in on Anthropic and OpenAI but can't. Getting access to shares to participate in this market (with market leaders) is not easy, especially not at scale. Amazon and Google were willing to pay an above-market premium to align strategically, but financial investors I can see do 80-90% of that valuation and be very happy.

It’s an interesting question. The shares are likely not transferrable without amending the LLC agreement or whatever. If you want in on Anthropic, though, and you know the FTX estate has to liquidate, then there’s a chance you can get to a good price; maybe less than $3B but probably not a ton, because lots of other people want in too.

On the other hand, the current investors probably won’t want to make an exception for FTX if they know it’s going to cause them to write down their stakes.

Someone has to buy and liquidate all that stock. Seems unlikely.

Seeing as Google and Amazon just closed billion dollar deals buying up Anthropic equity, it seems quite likely in my opinion.

They're buying it and holding it for the long run. Maybe it is as simple as letting them and other privileged parties buy more from FTX's stake and then redirecting the proceeds to each creditor.

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