Krishna Rao - Anthropic's CFO on Compute, Scaling to $30B ARR, and the Returns to Frontier Intelligence - [Invest Like the Best, EP.471]
Invest Like the Best with Patrick O'Shaughnessy
Scaling Laws and Evaluation Practices
Krishna discusses internal measurement of scaling laws, pre-training snapshots, RL, and customer-driven targets.
My guest today is Krishna Rao, the CFO of Anthropic. The center of our conversation is how he navigates the decision around procuring and allocating compute, which he describes as the canvas on which everything else gets built.
We talk about what he calls the cone of uncertainty, the three chip platforms Anthropic uses fungibly across Trainium, TPUs, and GPUs, and the daily meetings they run to allocate compute between model development, internal use, and serving customer demand.
He explains why the returns to frontier intelligence keep getting higher, especially in enterprise, and how Anthropic thinks about the line between platform and application and why they choose to build their own products like Claude Code.
Krishna has such a unique seat watching one of the fastest growing businesses in history, and he is generous in sharing what he has learned since joining the company two years ago.
For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Timestamps:
(00:00:00) Welcome to Invest Like The Best
(00:02:29) Episode Intro: Krishna Rao
(00:03:14) Compute as Anthropic's Lifeblood
(00:05:17) Three Fungible Chip Platforms
(00:07:31) The Cone of Uncertainty
(00:09:08) Competing Ways to Allocate Compute
(00:10:36) What Drives Compute Efficiency
(00:12:38) Why Frontier Returns Are So High
(00:16:32) How Claude Code Writes Its Own Code
(00:18:46) Will Talent Become Obsolete?
(00:20:07) How Scaling Laws Are Holding
(00:21:54) Exponential Thinking
(00:23:17) The Layer Cake of Compute
(00:26:36) How Anthropic Deploys New Compute
(00:27:53) Platform v. Application Layer
(00:32:42) Why Model Pricing Has Stayed Stable
(00:35:26) Measuring Return on Compute
(00:37:22) Working With Chip Providers
(00:38:32) How Anthropic's Finance Team Uses Claude
(00:41:32) The Jevons Paradox for Labor
(00:43:08) Anthropic's Fundraising & Growth Journey
(00:47:31) The Exponential Revenue Curve
(00:49:02) The Hardest Thing to Explain to Investors
(00:52:15) AI's Public Perception Problem
(00:55:38) Mythos
(00:57:31) Relationship With Government
(00:58:51) Inside Anthropic's Culture
(01:03:48) The Next Frontier: Virtual Collaborators
(01:06:22) How Leaders Scale With a Business
(01:10:55) The Biggest Risks to Continued Progress
(01:12:09) What Krishna is Excited About
(01:13:45) The Kindest Thing
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