Anthropic, Amazon, Knicks

Anthropic cannot sell its latest AI model due to new US export controls, but the company may bypass restrictions by packaging the model for enterprise clients and joint ventures rather than selling it directly. This strategy could allow Anthropic to maintain revenue growth and valuation without public release of its frontier model.

Packaging & pricing at the frontier Anthropic can’t sell its latest model because of export controls put in place late on Friday. As of writing today, it is currently working to resolve the issue with regulators https://www.wsj.com/tech/ai/anthropic-dispatches-staff-to-d-c-racing-to-resolve-ai-export-restrictions-71303d42 . 1 packaging-pricing-at-the-frontier-note-fn-1 But does Anthropic need to sell its most advanced model directly at all? No. It can sustain and grow its valuation without ever doing that again. Gating is the path to extracting higher willingness to pay, as we saw when we looked https://www.marginpoints.com/essays/mythos-and-the-50-movie-ticket at Mythos at the end of April. Anthropic doesn’t need to sell models when it can sell results or qualified shots on goal from the frontier model. The mid-level manager at Procter & Gamble doesn’t need to chat with Fable on their desktop, so much as have a project that is scoped to address their objectives and driven by a version of Fable delivered in specialized packaging. Why? The distribution is instant now unlike when you had to sell PCs or smartphones but the implementation is not. Diffuse implementation allows for better pricing around willingness to pay and better gating of access to extract maximum value. There are 1,800 public companies with a market cap of over $1 billion in the US and a slew of private ones as well. Each of those is a potential Anthropic user interested in having something their competitor can’t get or doesn’t have yet. Kick off auction dynamics for exclusive access and watch profit climb or serve everyone with variable pricing to prevent them from calling OpenAI. Anthropic could lean fully into partnerships and joint ventures focused entirely on implementations at enterprises and startups. Since they have no real consumer revenue or business and are focused only on platforms and B2B, they have flexibility in that they can easily identify their customers, verticals and use cases. That information can inform a strategy of stratification of models with restrictions and high degrees of specificity. The packaging can be different, not just the pricing. Consulting firms get one type of model, software firms get another, design firms yet another. Each can be neutered or boosted depending on the requirements. Each can make use of some frontier capabilities, while restricting the fullest model for those businesses with the highest willingness to pay. Anthropic has started embedding with organizations, and in May announced https://www.anthropic.com/news/enterprise-ai-services-company an enterprise AI services JV with Blackstone and Goldman Sachs. Both it and OpenAI have JVs on consulting and implementation. They can be creative in how they package the latest frontier model and any derivatives to avoid export restrictions. Like acquisitions Google/Windsurf and Meta/Scale that became husks to get around regulatory scrutiny, there is no shortage of potential creativity that could be applied to this problem. This is not an easy product to regulate the implementation of. People could be thin wrappers on Fable to avoid the restrictions. OpenAI can push its own frontier model, though now with more scrutiny. They might look to follow on not releasing the frontier to the public in order to maximize revenue. OpenAI has discounted ChatGPT access in the Indian market, while Anthropic has not discounted Claude for foreign markets. Discounting is gating in reverse and this development might push Claude through the ceiling rather than looking for a door in the floor. Let’s say all the export restrictions drop off in the coming weeks 2—Anthropic could be fine never selling the latest model to the public. Doing so would increase the value to those that it does sell to considerably.