MARKET UPDATE: Anthropic S-1, Market Bottoms, What’s Next?

Summary

• Avi reads the Anthropic S-1 release as a positioning-driven bottom despite the company’s losses. Investors had already sold in anticipation of bad news: Intel fell from 120 to 85 before rebounding toward 94, SanDisk gained 6%, and the Nasdaq had roughly a 2% rebound session. The result was a “blowout of the shorts” as expectations proved worse than the event.
• Jonah sees Anthropic’s financing problem as serious without treating it as an existential threat to the AI trade. The transcript gives conflicting cash figures: the opening clip says $132 billion, while Jonah’s later discussion says $13.2 billion, against more than $500 billion of compute commitments. He calls independent survival versus outside assistance a “coin flip.” The founders’ 50.1% voting control is what he expects continued financing to threaten.
• The preferred AI exposure is scarce infrastructure and stronger balance sheets. Jonah cites SK Hynix being sold out through 2030, favors Micron and broad indices on dips, and warns against undercapitalized neoclouds whose creditors could effectively subsidize hyperscalers. His instruction is to “pick your spots” within an AI cycle he considers early.
• Avi would treat a sharp Democratic midterm selloff as a buy. His premise is that investors have already reduced exposure ahead of the asymmetric political downside; Republicans winning could therefore produce a larger rally, while Democrats winning could initially mean weakness or chop. Jonah says he would use leverage to buy a Democratic-sweep dip for a short-term rebound.
• Jonah’s political hedge targets a leftward presidential outcome, while Avi disputes its electoral inevitability. Jonah describes himself as “max long” and frames a rough 10–20% adverse political tail as being “short that put option.” Avi says AOC would lose “hands down” and argues that addressing housing supply gives Republicans room to recover on affordability.
• Avi sees crypto shorts, especially Ethereum puts, as a more direct political hedge than selling major AI exposure. He expects a Democratic administration to have greater freedom to pursue crypto through regulation and enforcement, with Ethereum and Solana more vulnerable than Bitcoin. Jonah treats Bitcoin as globally entrenched; Avi still expects Bitcoin and Michael Saylor to face targeting.
• Jonah remains bullish on Bitcoin over ten years while being categorically bearish on most other tokens. His million-dollar Bitcoin forecast rests on continued liquidity creation and currency debasement, with gold-like stretches of inactivity between advances. Blockchain adoption need not reward token holders. Jonah raises the cited verification argument for blockchain agent payments; Avi replies that accounts on Stripe can address it.
• Jonah is watching uranium, but favors gas as the practical response to near-term power shortages. He sees European acceptance of clean nuclear power potentially supporting US data-center demand, although he owns no uranium position yet. He calls nuclear “too long cycle”; Avi says buildout takes seven to ten years. Jonah expects shortages to force faster gas generation.

Deep dive

1. Crowded bearish positioning turns the S-1 into a bottom

• Avi’s framing: markets weigh reality against perceptions, and perceptions ahead of Anthropic’s S-1 were already dire. Intel fell from 120 to 85 before recovering toward 94; SanDisk rose 6%, and the Nasdaq subsequently had roughly a 2% session. What traders expected to be “Black Monday” instead produced a “blowout of the shorts,” without resolving the underlying financing questions.
• The mechanism is fast-moving hedge-fund capital trading narratives and quarterly performance. Once investors had reduced exposure and the disclosure arrived, attention shifted to “what is going to be important in the next…6 weeks.” Jonah characterizes the de-risking as a combination of midterm fears—including politicians coming down hard on AI—and the Anthropic S-1. With the S-1 behind them, the focus shifts to the political risk.
• Avi’s election asymmetry: Republican control means business as usual, but prior selling could support a substantial rally. Democratic victory could produce an initial algorithmic selloff, then sideways trading or chop. Avi calls a sharp selloff a buy; separately, Jonah says he would use leverage to buy a Democratic-sweep dip for a short-term rebound. A midterm result might inform 2028, but does not settle it.
• Jonah’s longer-term portfolio remains biotech, ARKG, Intel, the Qs and the S&P. He says ARKG is heading toward new highs, up roughly 5–6% that day, and has added Intel while considering DRAM exposure. Uranium is a prospective entry rather than an existing holding. “If you’re thinking about de-risking right now it’s probably the wrong time,” he argues.

2. Anthropic’s funding problem can coexist with an AI bull market

• Jonah’s later discussion cites $13.2 billion in cash against more than half a trillion dollars in forward compute commitments; the transcript’s opening clip instead says $132 billion in cash. Avi estimates another $80 billion must be raised. “They kind of have to keep growing exponentially or they die or…get bailed out. Probably the latter,” Jonah says. His subsidy analogy is Uber: “sell quarters for a dime” while outside funding sustains the service.
• Jonah’s honest uncertainty is a “coin flip” between Anthropic servicing those commitments independently and doing so with assistance. His firmer bearish call concerns the founders’ 50.1% voting control: he sees “no way” funding keeps arriving without control passing toward broader corporate interests. He thinks that outcome could be worse for AI safety while leaving the broader investment cycle intact.
• The distinction is between the cycle and its constituents. Jonah places AI in its first or second inning, while allowing for violent selloffs if Anthropic’s growth plateaus or undercapitalized neoclouds are absorbed by hyperscalers. Their creditors could effectively subsidize Meta’s models and compute. His conclusion is redistribution within the trade: “pieces of it will” collapse while other pieces rally.
• Jonah’s preferred scarcity exposure is memory: he cites SK Hynix saying it is sold out through 2030, favors Micron on dips, and would avoid buying the Korean stock market broadly. If Anthropic fulfills even half its commitments, alongside Meta’s announced spending, he estimates another $200 billion of equity capital entering the system. “It’s not debt,” he emphasizes—a demand support.

3. The political disagreement centers on affordability and the left tail

• Jonah’s framing is portfolio protection: “I am max long on the highs.” He cites Polymarket putting Gavin Newsom and AOC at 16% each for the Democratic nomination. Combining AOC and Pete Buttigieg gives 21% for nominees he regards as a sharp left turn; multiplying by an assumed 50% Democratic victory probability produces roughly 10.5%. He describes a 10–20% adverse tail: “I’m short that put option.”
• After listening to an Ezra Klein interview with a Trump-voter pollster, Jonah stresses dissatisfaction with grocery prices, gasoline and the Iran war. He cites approval falling from above 50% to roughly 36% and argues voters judge policy outcomes rather than promises. “I never would have thought this before,” but if that dissatisfaction persists, he thinks virtually any Democrat has a chance.
• Avi’s pushback—worth keeping: he disputes a uniformly deteriorating economy, arguing wage growth and inflation have improved and earlier money creation explains more of the price burden than tariffs. He locates the strain among coastal earners making $80,000–$200,000. Jonah pushes back that Houston plumbers may not be doing okay and says this is the middle-class voting bloc that matters. Avi’s proposed political opening is housing supply.
• Avi says AOC will lose “hands down”: courting the organized activist left could let Newsom move ahead because “the voter base is not ready for that.” He cites 50,000 New York door-knockers as evidence of organizational competence. His discussion of DSA proposals to abolish the presidency and Senate comes with an explicit near-zero probability of implementation; he uses them to illustrate coalition pressures, rather than predict constitutional change.

4. Crypto offers the more direct hedge against a Democratic turn

• Avi distinguishes politically unpopular AI from politically stoppable AI: its economic importance makes reversal difficult. Crypto, by contrast, could face tougher Coinbase regulation, SEC/CFTC enforcement and restrictive legislation with less resistance. His proposed hedge is Bitcoin puts, especially Ethereum puts; he expects Ethereum, Solana and other L1s to suffer more than Bitcoin under a Democratic administration.
• The anticipated political attack would connect crypto to Trump’s enrichment, money laundering and extraction; both expect World Liberty Financial to be investigated. Avi thinks institutional usefulness offers protection: financial firms will defend rails that advance their profits. LayerZero and Hyperliquid enter that discussion, but he explicitly says Hyperliquid lacks enough hedge-fund adoption to withstand a regulatory onslaught today.
• On Bitcoin’s political insulation, Avi says an empowered Elizabeth Warren and Gary Gensler could stymie almost everything except Bitcoin: like AI, “the genie’s out of the bottle.” Avi also expects Bitcoin to be targeted and Michael Saylor to come under pressure. Agreement on altcoin vulnerability does not become agreement on Bitcoin’s near-term political insulation.

5. Bitcoin’s monetary thesis survives the token shakeout

• Jonah credits Jason Calacanis’s 2022 advice to pivot from crypto into AI, but rejects extrapolating today’s loss of enthusiasm into Bitcoin never recovering its high. Crypto is a “community building asset” that rewards influencers for promoting their holdings; that momentum is weaker now. His qualification is temporal: “that’s very much a right now thing,” rather than a permanent verdict.
• Bitcoin increasingly resembles gold in Jonah’s account: long stretches of ranging or inactivity alternate with periods when value multiplies. He still expects “million-dollar Bitcoin sometime in the next 10 years” because politicians across parties will keep injecting liquidity and debasing currency. Even under his hypothetical collectivist downside, he thinks people would use Bitcoin to move wealth out of the country.
• His blockchain thesis separates useful infrastructure from investable tokens: “you need one token BTC.” Better financial rails and back-office systems can earn revenue without attaching another token. He calls long-term altcoin shorts attractive because those assets will trend to zero, while acknowledging short-term rallies and trading opportunities. In this context, he says a Democratic win would put altcoins on the “express train to zero.”
• On AI-agent payments, Jonah raises the argument he attributes to Ilya—that blockchain provides necessary verification of recipients—and Avi replies, “That’s solved by accounts on Stripe.” Avi also calls the rush toward compute futures “a big fat joke” and questions whether Coinbase’s AI pivot means tokens will capture agent transactions.

6. Uranium needs a narrative shift; power shortages may favor gas

• Jonah’s uranium watch rests on energy demand meeting changing politics. If Europe increasingly accepts nuclear plants as clean, he thinks the United States could follow, allowing nuclear-powered data centers to satisfy climate concerns. He is looking for an entry and owns none yet; this is a prospective thesis tied to acceptance and construction, rather than a claim of imminent nuclear supply.
• Jonah’s objection is timing: nuclear is “too long cycle,” and Avi says it takes seven to ten years to build out. Jonah blames the retreat after Three Mile Island and accumulated regulation for obstructing a technology he sees as a solution. His nearer-term alternative is a cheap gas plant beside an existing pipeline in Texas or California: abundant fuel, substantial output and a faster route to power.
• Avi’s pushback is political: support for polluting gas plants may be scarce. Jonah answers with an Austin manufacturing line: a red warning light sends workers sprinting because downtime costs money; power shortages could force similar urgency. If data centers cause rolling brownouts, he predicts AOC would ban AI and concede ground to China; under anyone right of the DSA, plants get built in “record time,” Democrat or Republican.