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It's not odd, this is how big capital extends itself into the future. Alphabet and Amazon are giant tech conglomerates that have been doing this for years. Al

It's not odd, this is how big capital extends itself into the future. Alphabet and Amazon are giant tech conglomerates that have been doing this for years. Alphabet bought Youtube, Android, DoubleClick, DeepMind, Maps, etc. Plenty of things, and maybe the best things people think of when they think of Google are actually bought from the marketplace and integrated into the giant. They buy whatever they want that might help their cause. This quarter alone Alphabet's free cash flow is $22B. This is a small bet for them. Why wouldn't they spend a small fraction in a key area for them?

ilrwbwrkhv 3y ago
And that is why they should have been broken up many years ago. The lack of teeth of us anti competitive laws goes against capitalism.
- jdgoesmarching 3y ago
  What. Deploying capital to make investments is the central conceit of capitalism. It’s right there on the tin.
- Yoric 3y ago
  I don't feel that capitalism is an end to be pursued, but I agree that these conglomerates should be broken, for the sake of avoiding irreversible concentration of power.
  - naillo 3y ago
    Not really irreversible unless they get a monopoly on violence, so as long as the overton window from the publics perspective shifts dominantly towards breaking them up in the future we'll be able to get a better situation.
    - troyvit 3y ago
      They (search, social media, advertising companies) are gaining a monopoly on truth. With that they indirectly control the government, which is the one with the monopoly on violence.
      - kjkjadksj 3y ago
        You are never given the real truth in the media. There’s never been an incentive for that.
        Yoric 3y ago
        To emphasize, all human productions are biased, that's human nature, and news media are not exempt, despite many outlets making serious attempts to produce unbiased news. Part of the job of being a consumer of media is understanding the bias of what we're consuming, determining whether it skews the news, and possibly counter-balancing by consuming other media with different bias. And yes, it's lots of work and most people aren't willing to spend the time doing that.
    - actionfromafar 3y ago
      When you can reliably tell they have a monopoly on violence, it's far to late to do something about it. However, Very Bad Things™ can happen long before they have monopoly on violence. And violence where? Large companies operate in weak jurisdictions, not only in their home states of Maryland and Ireland.
      - jondwillis 3y ago
        Did you mean Delaware instead of Maryland?
      - brookst 3y ago
        Maybe propose an alternate system that is 100% free from any similar hypothetical future abuse?
    - Yoric 3y ago
      Well, historically, there have been a number of companies with the right to violence. The East Indies and West Indies Companies, for instance, or more recently United Fruit. I haven't bothered to check, but I'd be surprised if Big Oil didn't have mercenaries on call in hot zones, with little to no oversight. Nobody (company, nation or gang) needs a monopoly on violence to become dangerous.
      - Jensson 3y ago
        Those companies didn't have the right to violence in their home countries, they waged wars in other countries instead. Companies overthrowing their home country hasn't really been a thing.
        Yoric 3y ago
        True. However, please don't forget that the conglomerates being discussed initially do exist and have considerable influence in other countries than the US, so my remark remains :) Also, the Medici family was initially a wool company, then grabbed power in their homeland, kept it for about three centuries and somewhere along the way produced descendants that ruled over much of Europe. Similarly, the fascist uprising that gave power to Franco over Spain was largely privately funded by a bank [1] and I seem to remember that the German Nazi party was largely funded by industrialists and bankers [2] until reached power. So, I'd say that companies overthrowing their home country's government has unfortunately been a thing for quite some time. [1] https://en.wikipedia.org/wiki/Juan_March https://en.wikipedia.org/wiki/Juan_March [2] https://www.bibliotecapleyades.net/sociopolitica/wall_street/chapter_07.htm https://www.bibliotecapleyades.net/sociopolitica/wall_street...
  - nomel 3y ago
    > for the sake of avoiding irreversible concentration of power In the context of capitalism, it’s for the same reasons.
- calderknight 3y ago
  hmmm isn't it just exactly capitalism? and government intervening would maybe be against capitalism?
- treprinum 3y ago
  Those parts would still end up bought by Blackrock, Vanguard or whatever index fund is in fashion and steered by these funds that have the easiest business model but no capacity to innovate.
  - malwarebytess 3y ago
    Then maybe funds like Blackrock, Vanguard, should be dismantled as well.
    - jeffbee 3y ago
      Why? "Owned by Vanguard" is the closest possible thing to "owned by the American public". What do you think Vanguard is and where do you think their money comes from?
      - junofan 3y ago
        Downvoting because parent is clearly referring to corp gov activities and it’s insulting to insinuate they don’t know what an asset manager is.
    - RandomLensman 3y ago
      Everyone should be their own asset manager? The devolution of voting has already started, so not sure that direction has much merit.
    - treprinum 3y ago
      Maybe just restrict index funds from interfering with whatever business they own? Index funds are ultimately a dumb momentum-based business model that just buys whatever companies are doing well at the moment and sells whichever aren't, but bear no risk themselves outside the economy shrinking. Not sure why they should have any say in how the companies they own operate, it seems like a complete competence mismatch (dumb ones with little risk controlling the smart ones with the skin in the game).
bushbaba 3y ago
This is by no means a small bet.
- hipadev23 3y ago
  Google is sitting on $120B in cash. https://finance.yahoo.com/quote/GOOGL/balance-sheet?p=GOOGL https://finance.yahoo.com/quote/GOOGL/balance-sheet?p=GOOGL
  - eldritch_4ier 3y ago
    Maybe it’s semantics, but generally with fund allocation when you’re deploying more than 1% of your AUM towards a single thesis that’s a significant bet.
    - n2d4 3y ago
      The closest equivalent to "AUM" for a company like that would be the market capitalization, not cash reserves, so over 1.5 trillion. Then again, shareholders usually have less risk tolerance with companies than investors with hedge funds, so the two aren't really comparable either. (But I assume your 1% number is for more risk-averse funds? Hedge funds regularly make much bigger bets than that)
  - FieryTransition 3y ago
    Maybe someone can explain this, because I never understood it. When a company sits on so much cash, I guess it doesn't mean cash which is liquid, but rather a variety of assets, right? So when they just have to pull x billions out, it's not just liquid assets, but they will have stage and sell assets representing those funds. So since it's not just cash, how does a company of this size, then determine what assets to sell? And if those assets are actually invested in something, or representing an entity of some sorts, how do they assess whether or not it will cause any damage or loss of profitability? The crux is, is the risk two fold? First let go of whatever the assets were invested in (one), and then buy a new company and hope it has ROI (two). Or is it actually possible to have 1.5 billion dollars laying around in cash somehow? I know money is a made up idea, but that is still a big number for a bank/banks/asset holding company to just say good for and expect some kind of real monetary tangible value behind the symbolic currency.
fauigerzigerk 3y ago
But this investment seems different from all the other ones as Google isn't actually taking over Anthropic. Amazon is an even larger shareholder and I think Anthropic has made a commitment to prioritise AWS. So what is Google trying to do here? Offer Anthropic to GCP customers as yet another option?
- TeMPOraL 3y ago
  Enemy of my enemy? Google and Microsoft have much greater competitive surface area than either of them have with Amazon. It would make sense for G and A to both prop up an alternative to OpenAI. If Google could integrate quality LLMs into their assistant, that would boost their position relative to Apple too.
  - fauigerzigerk 3y ago
    That would make sense if Google didn't have its own AI offering and research that is supposed to be first rate and a strategic priority of the company. Of course Google would prefer Anthropic to beat (or at least be competitive with) OpenAI, but only if they can't do it themselves. Has Google management lost confidence in its own AI capability? Or are there so many leading AI researchers that refuse to work for Google? To me this looks like Google could be in big trouble.
    - mattnewton 3y ago
      Google has astronomical sums of cash and so many hands that the left hand often doesn’t know what the hundreds of right hands know. My point is $2B can be considered a side bet to make sure if their own efforts fail there is a serious competitor to open ai to buy or license by finance people without knowledge of how their own internal modeling efforts are going.
      - fauigerzigerk 3y ago
        >...a side bet to make sure if their own efforts fail there is a serious competitor... My point is that this is not how a healthy company can think about its most strategic activities. This sort of failure is not something you can hedge against. It's like Apple hedging against the risk of failing to keep iPhone competitive by investing in some other device maker that might be able to compete with Samsung.
Mistletoe 3y ago
Do you ever think how much better the world would be off if Alphabet wasn't allowed to buy all those things? I do. Antitrust has to come back in a big way.

ilrwbwrkhv 3y ago

And that is why they should have been broken up many years ago. The lack of teeth of us anti competitive laws goes against capitalism.

jdgoesmarching 3y ago
What. Deploying capital to make investments is the central conceit of capitalism. It’s right there on the tin.
Yoric 3y ago
I don't feel that capitalism is an end to be pursued, but I agree that these conglomerates should be broken, for the sake of avoiding irreversible concentration of power.
- naillo 3y ago
  Not really irreversible unless they get a monopoly on violence, so as long as the overton window from the publics perspective shifts dominantly towards breaking them up in the future we'll be able to get a better situation.
  - troyvit 3y ago
    They (search, social media, advertising companies) are gaining a monopoly on truth. With that they indirectly control the government, which is the one with the monopoly on violence.
    - kjkjadksj 3y ago
      You are never given the real truth in the media. There’s never been an incentive for that.
      - Yoric 3y ago
        To emphasize, all human productions are biased, that's human nature, and news media are not exempt, despite many outlets making serious attempts to produce unbiased news. Part of the job of being a consumer of media is understanding the bias of what we're consuming, determining whether it skews the news, and possibly counter-balancing by consuming other media with different bias. And yes, it's lots of work and most people aren't willing to spend the time doing that.
  - actionfromafar 3y ago
    When you can reliably tell they have a monopoly on violence, it's far to late to do something about it. However, Very Bad Things™ can happen long before they have monopoly on violence. And violence where? Large companies operate in weak jurisdictions, not only in their home states of Maryland and Ireland.
    - jondwillis 3y ago
      Did you mean Delaware instead of Maryland?
    - brookst 3y ago
      Maybe propose an alternate system that is 100% free from any similar hypothetical future abuse?
  - Yoric 3y ago
    Well, historically, there have been a number of companies with the right to violence. The East Indies and West Indies Companies, for instance, or more recently United Fruit. I haven't bothered to check, but I'd be surprised if Big Oil didn't have mercenaries on call in hot zones, with little to no oversight. Nobody (company, nation or gang) needs a monopoly on violence to become dangerous.
    - Jensson 3y ago
      Those companies didn't have the right to violence in their home countries, they waged wars in other countries instead. Companies overthrowing their home country hasn't really been a thing.
      - Yoric 3y ago
        True. However, please don't forget that the conglomerates being discussed initially do exist and have considerable influence in other countries than the US, so my remark remains :) Also, the Medici family was initially a wool company, then grabbed power in their homeland, kept it for about three centuries and somewhere along the way produced descendants that ruled over much of Europe. Similarly, the fascist uprising that gave power to Franco over Spain was largely privately funded by a bank [1] and I seem to remember that the German Nazi party was largely funded by industrialists and bankers [2] until reached power. So, I'd say that companies overthrowing their home country's government has unfortunately been a thing for quite some time. [1] https://en.wikipedia.org/wiki/Juan_March https://en.wikipedia.org/wiki/Juan_March [2] https://www.bibliotecapleyades.net/sociopolitica/wall_street/chapter_07.htm https://www.bibliotecapleyades.net/sociopolitica/wall_street...
- nomel 3y ago
  > for the sake of avoiding irreversible concentration of power In the context of capitalism, it’s for the same reasons.
calderknight 3y ago
hmmm isn't it just exactly capitalism? and government intervening would maybe be against capitalism?
treprinum 3y ago
Those parts would still end up bought by Blackrock, Vanguard or whatever index fund is in fashion and steered by these funds that have the easiest business model but no capacity to innovate.
- malwarebytess 3y ago
  Then maybe funds like Blackrock, Vanguard, should be dismantled as well.
  - jeffbee 3y ago
    Why? "Owned by Vanguard" is the closest possible thing to "owned by the American public". What do you think Vanguard is and where do you think their money comes from?
    - junofan 3y ago
      Downvoting because parent is clearly referring to corp gov activities and it’s insulting to insinuate they don’t know what an asset manager is.
  - RandomLensman 3y ago
    Everyone should be their own asset manager? The devolution of voting has already started, so not sure that direction has much merit.
  - treprinum 3y ago
    Maybe just restrict index funds from interfering with whatever business they own? Index funds are ultimately a dumb momentum-based business model that just buys whatever companies are doing well at the moment and sells whichever aren't, but bear no risk themselves outside the economy shrinking. Not sure why they should have any say in how the companies they own operate, it seems like a complete competence mismatch (dumb ones with little risk controlling the smart ones with the skin in the game).

bushbaba 3y ago

This is by no means a small bet.

hipadev23 3y ago
Google is sitting on $120B in cash. https://finance.yahoo.com/quote/GOOGL/balance-sheet?p=GOOGL https://finance.yahoo.com/quote/GOOGL/balance-sheet?p=GOOGL
- eldritch_4ier 3y ago
  Maybe it’s semantics, but generally with fund allocation when you’re deploying more than 1% of your AUM towards a single thesis that’s a significant bet.
  - n2d4 3y ago
    The closest equivalent to "AUM" for a company like that would be the market capitalization, not cash reserves, so over 1.5 trillion. Then again, shareholders usually have less risk tolerance with companies than investors with hedge funds, so the two aren't really comparable either. (But I assume your 1% number is for more risk-averse funds? Hedge funds regularly make much bigger bets than that)
- FieryTransition 3y ago
  Maybe someone can explain this, because I never understood it. When a company sits on so much cash, I guess it doesn't mean cash which is liquid, but rather a variety of assets, right? So when they just have to pull x billions out, it's not just liquid assets, but they will have stage and sell assets representing those funds. So since it's not just cash, how does a company of this size, then determine what assets to sell? And if those assets are actually invested in something, or representing an entity of some sorts, how do they assess whether or not it will cause any damage or loss of profitability? The crux is, is the risk two fold? First let go of whatever the assets were invested in (one), and then buy a new company and hope it has ROI (two). Or is it actually possible to have 1.5 billion dollars laying around in cash somehow? I know money is a made up idea, but that is still a big number for a bank/banks/asset holding company to just say good for and expect some kind of real monetary tangible value behind the symbolic currency.

fauigerzigerk 3y ago

But this investment seems different from all the other ones as Google isn't actually taking over Anthropic. Amazon is an even larger shareholder and I think Anthropic has made a commitment to prioritise AWS. So what is Google trying to do here? Offer Anthropic to GCP customers as yet another option?

TeMPOraL 3y ago
Enemy of my enemy? Google and Microsoft have much greater competitive surface area than either of them have with Amazon. It would make sense for G and A to both prop up an alternative to OpenAI. If Google could integrate quality LLMs into their assistant, that would boost their position relative to Apple too.
- fauigerzigerk 3y ago
  That would make sense if Google didn't have its own AI offering and research that is supposed to be first rate and a strategic priority of the company. Of course Google would prefer Anthropic to beat (or at least be competitive with) OpenAI, but only if they can't do it themselves. Has Google management lost confidence in its own AI capability? Or are there so many leading AI researchers that refuse to work for Google? To me this looks like Google could be in big trouble.
  - mattnewton 3y ago
    Google has astronomical sums of cash and so many hands that the left hand often doesn’t know what the hundreds of right hands know. My point is $2B can be considered a side bet to make sure if their own efforts fail there is a serious competitor to open ai to buy or license by finance people without knowledge of how their own internal modeling efforts are going.
    - fauigerzigerk 3y ago
      >...a side bet to make sure if their own efforts fail there is a serious competitor... My point is that this is not how a healthy company can think about its most strategic activities. This sort of failure is not something you can hedge against. It's like Apple hedging against the risk of failing to keep iPhone competitive by investing in some other device maker that might be able to compete with Samsung.

Mistletoe 3y ago

Do you ever think how much better the world would be off if Alphabet wasn't allowed to buy all those things? I do. Antitrust has to come back in a big way.