Anthropic’s Bold Sci-Fi Play

“Risk is our business. That’s what this starship is all about . That’s why we’re aboard her.”

— Captain James T. Kirk, Star Trek (1968)

I grew up watching the original Star Trek on VHS.

It was absolutely visionary television.

Kirk was flipping open his communicator decades before flip phones hit the shops.

The crew spoke to the ship’s computer, and it answered back.

These days, millions of us do the same with AI.

Overnight, one of the companies leading that charge filed to list on the Nasdaq.

Yes, we just got news that Anthropic, the company behind the Claude AI model, wants to go public.

Source: Bloomberg

The Ultimate Computer

Anthropic’s prospectus, the document it hands investors before listing, includes nearly 100 pages of risks.

The company warns its AI could try to “resist shutdown”.

Trekkies might remember an episode called “The Ultimate Computer”. Starfleet installs a computer called the M-5 to run the Enterprise with a skeleton crew.

It goes rogue during war games, and Kirk has to talk it into switching itself off.

Wall Street is lining up regardless of any potential AI extinction event.

Bloomberg reports investors are pencilling in a value of US$1.4–1.5 trillion, with some talk of US$1.75 trillion.

Earlier this year, private investors valued it at US$965 billion, up from US$380 billion in February.

The float is a bellwether of how much appetite remains for AI shares.

Damage report

With some US investors dreaming of interstellar travel aboard the Anthropic IPO, let’s spare a thought for the domestic market.

Back in May, I warned the federal budget would be hostile to investors.

The tax changes passed Parliament in June.

For a small-cap that doubles in price over a year or two, the inflation adjustment tax change is worth only a sliver of the old discount.

In simple language, the tax reward for patience is about to shrink dramatically.

That tilts the game toward being nimble, with less reason to hang on to a fading stock just to clear the 12-month mark.

This is general information, so run your own situation past an accountant.

(Seriously, the government tends to change the tax rules all the time, and of course, only if it’s convenient for them to beam up more tax revenue).

Anyway, don’t worry, things could get worse too…

The RBA could lift rates again next Tuesday, bringing the total to five hikes this year.

Meaning many Aussie investors’ returns might be in the sick bay with McCoy.

So to invest these days, while we need Captain Kirk’s taste for adventure, we also need a bit of Spock.

Kirk backs his gut and charges into the unknown.

The ever-logical Spock checks the sensor readings and calmly tells him the odds.

At the smaller end of the market, you need a bit of both.

And after much experience, I can confirm that selling is where most investors come unstuck, because emotion tends to grab you at exactly the wrong moment.

Fascinating…

My colleague Charlie Ormond wants to help.

His AI-driven ATLAS system can provide you with a bit of that Spock approach.

Charlie has spent five months running an AI engine called ATLAS across the small and mid-cap end of the ASX.

And he’s just released the upgraded version, ATLAS 1.0.

Each day, it scores hundreds of stocks from 1 to 100 based on how their share prices behave.

What interests me most is how it handles the hardest call in investing, which is knowing when to sell.

Every stock ATLAS flags comes with its own exit line.

That line climbs as the share price rises, and it gives jumpier stocks more room to move.

If the price breaks below it, the trend has likely cracked.

That’s your cue to take profits, or cut and run.

Think of it as Scotty calling up from engineering to warn that the ship can’t take much more.

A good captain listens before the engines blow.

ATLAS also watches for money draining out of whole sectors.

In mid-August, it dropped property to the bottom of its rankings, 42 days before the RBA lifted rates in late September.

It will get some calls wrong, as every system does.

And unlike the M-5, it never takes the helm.

ATLAS doesn’t place trades or touch your account, so the final call stays with you.

You can run your current holdings past it and use it as a decision-making framework laid over whatever approach you already use.