Anthropic as the new AI kingmaker
Speakers
Deirdre Bosa — Tech Check Reporter
— CNBC anchor, tech reporter
Summary
- Anthropic has emerged as a "Kingmaker" for legacy software; companies that partner with it (e.g., Thomson Reuters, Salesforce) see immediate stock price recovery, while those that don't risk obsolescence.
- A divergence is occurring where the market no longer blindly buys AI backers (Amazon, Nvidia) on funding news, but rewards specific software applications that secure their survival via AI partnerships.
- Block (SQ) is undergoing a massive restructuring (cutting workforce by ~50%), which is viewed not as a sign of distress but as a necessary maturation towards efficiency and profitability.
Trade Ideas
"The market is rewarding whoever takes the deal [with Anthropic]. Thomson Reuters jumped 14% the day it announced its partnership. Salesforce popped five." The market is using Anthropic partnerships as a binary filter to "separate the winners from the losers" in legacy software. If a legacy SaaS company (like Intuit with its tax logic) integrates with a leading AI model, investors view it as "useful to the AI" rather than "replaceable by it," triggering a relief rally. Long on legacy software names immediately upon announcement of AI model partnerships. The "Skeptic's Case": By partnering, these firms hand over proprietary data (tax logic, pipeline data) to the AI, potentially training their own replacement in the long term.
Despite OpenAI closing a massive fresh funding round, "Amazon and Nvidia... they're down or we'll call it flat today. The market kind of just shrugged it off." The era where any AI funding headline lifts all boats (especially the backers and hardware providers) is fading. The market is becoming desensitized to capital raises and is now demanding execution/revenue rather than just investment announcements. Do not trade solely on "AI funding" headlines for mega-cap backers anymore; the correlation is weakening. A renewed, unexpected surge in AI capex spending could reignite the momentum trade.
Jack Dorsey is cutting the Block workforce by nearly half, yet the company is "profitable and it is still growing." Unlike "AI washing" or desperation, this move is interpreted as a maturation phase ("growing up"). The market rewards profitable tech companies that cut bloat to improve margins (similar to the Meta efficiency playbook). Long on operational efficiency and margin expansion. If cuts are too deep, they may stifle innovation in the competitive fintech sector.
