The Scene
Existential AI fears broke containment this week after an Anthropic researcher quit, warning that frontier labs are “gambling with our lives.” One of his colleagues chimed in, putting the odds of human extinction from AI at more than 10%. Sheryl Crow entered the conversation.
We at Semafor Business aren’t tech experts, but we do know IPOs, and “we might cause the end of civilization” is a doozy of a risk factor. I’m edge-of-my-seat curious how the lawyers at Wilson Sonsini, working on the Anthropic listing, and Cooley and Wachtell, for OpenAI’s, will handle this section of the offering documents. We took a crack.
Risk Factors
- There is no guarantee that the company’s products will not precipitate the collapse of civilization. Such an outcome, which may not require any intentional misuse or manipulation of our products, is, in the view of the Company’s management, an acceptable cost of pursuing its noble mission. Also, China.
- It is not possible, based on the information available to the Company at the time of this issuance, to determine whether this is a Good or Bad Idea. The Company, under the oversight of the Calamity Calibration Committee of its Board of Directors, continues to assess the likelihood of the end of the world.
- We do not know how our products work. Don’t ask us.
- We may be unable to compete with larger, better-capitalized competitors. Just kidding, we have all the capital.
- Our valuation is entirely made up. We encourage investors to make their own assessments about the value of our shares, for example through discounted analysis of the terminal value of our assets. Wait, “terminal” is not a word we want in anyone’s head. We’ll come back to you.
- The company believes it has a total addressable market (TAM) of between $23 trillion and $126 trillion. The upper bound is, coincidentally, global GDP. Should that revenue fail to materialize, we will be forced to reassess or go on an ill-advised acquisition spree to backfill it.
- Key man risk: We have one and he is not popular. Including this key man, none of our employees understand how we create our products or how they work (See Risk Factor 3). Many of those closest to any semblance of comprehension may quit to go live in underground bunkers.
- The Company has, as part of our standard employment contracts, allowed employees to freely post on social media platforms. These communications could precipitate additional political scrutiny and a general destabilizing effect on the thinking, reading public. Should the company cease to allow these employees to scare the hell out of everyone on a random Tuesday, there is no guarantee they will remain with the Company.
- From time to time, we treat our regulators with an attitude that swings wildly between contempt and obsequiousness. Should we keep doing this, there can be no guarantees that we will be able to operate as a going concern beyond 2027. Our ability to win over local constituencies deeply mistrustful of both our products and our leaders is uncertain.
- At the time of this issuance, we do not carry an investment-grade credit rating, which may increase our borrowing costs or force us to borrow someone else’s and hope nobody notices. We did try to strong-arm the ratings agencies into granting an exception in the name of generational progress, but they are bizarrely holding out.
- A significant portion of our revenue is derived from a limited number of customers. We know a lot of companies say this but, no, literally all our money comes from Nvidia. If you’d like to become a customer, we’d love to add a second file to our CRM, just to test it out. Come to think of it, customer-relationship management seems like a good business. Add it to the TAM.
- The company has, from time to time, been the subject of concerted and organized cyberattacks, which could materially damage our business. Just kidding, we’re the ones doing the hacking. Companies we inadvertently hack could bring litigation seeking damages, but recent history has shown they are more likely to sell themselves to Nvidia, which in the Board’s studied opinion, is unlikely to sue us for obvious reasons. (See Risk Factor 9.)
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