AI Breakthrough or Hype? Anthropic’s Claude Mythos, Tim Cook Steps Down & LIV Golf Collapse

Hello and welcome back to the Market Maker podcast. And that's right, folks, back by popular demand, Steven Barnett is here on the show. How are you, Steven?

Yeah, I'm very well. Thank you. And this is extremely exciting. After 9 months off, I think it is, but obviously a couple of guest appearances. Yeah, I'm back in it and it's so nice to pick up with Gosh, so many different news stories. I could have picked 1,000, but I thought that I would pick the ones that I care most about, and this says quite a lot about me, the stories that we're going to cover today.

Yeah, so the format hasn't changed. You'll be pleased to know. So we're going to try and crack through 3 stories to try and explain, educate, and hopefully be interesting at the same time, which is the first one. Anthropic's launch of Mythos, their frontier model, why it might just be the greatest marketing exercise of all time. And also, a bit of intrigue here, the importance of a sandwich. You just have to stay tuned about what the connection is between sandwiches and AI. The second story then is something we covered, you know, you and I, I remember it quite vividly of all the episodes that we've done, maybe because it's not straight talking finance. Was golf, and that was LIV, the renegade golf tour backed by the Saudis. It was all sounding very exciting at the time and part of what looked like a multi-pronged attack from the Saudis with a bit of a soft power play, but it looks like it's going to fail after burning through almost $5 billion of cash. And there's been some interesting developments there as well. And then finally, big headline news, I guess those in Silicon Valley might have been in the know, but the Joe on the street, probably not, was Tim Cook has stepped down as CEO of Apple after 15 years at the helm. He's taken home almost $2.5 billion over that period, which sounds like an incredibly large amount of money, but he has steered the company and seen its value rise to a cool $3.6 trillion. So I don't know, Tim maybe should have pushed a little harder here for some of that payoff. But yeah, we'll talk about that one as well. But perhaps we could start with Anthropic, who are always never far from the news. So what's this latest development, Steve?

Yeah, absolutely. And before we start in earnest, it's definitely worth saying, as we've said previously on the podcast, that we are not experts in AI. But the Mythos story is so important from a strategy, from a state and shape of the market perspective that I think it's probably worth spending a little bit of time on. So just to set the scene, Claude Mythos Preview, which was the model that was released about 2 weeks ago and has been garnering headlines for some of the right reasons and maybe some of the wrong reasons as well, was released by a company called Anthropic. Most of you listeners would've heard of Anthropic by now. It is one of the leading frontier artificial intelligence labs, and it has built its reputation and it's built its juggernaut of a revenue engine by focusing on enterprise-level artificial intelligence, safety, trust-based, you know, going out and really signing up massive B2B, business-to-business contracts. And it's a little bit tortoise and the hare. OpenAI had this massive out-of-the-gates 2022 ChatGPT on everyone's desktops, everyone getting very excited, but hasn't really figured out how to build a particularly enduring revenue model. Whereas Anthropic's gone a little bit slowly. Claude's release to the public's been a little bit slower. But in the meantime, it's been building up an ecosystem and a technology that is so suitable for enterprise. And my gosh, the revenue growth of this company is representative and provides some justification for the hype, right? So its revenue run rate is topping $30 billion. Its revenue run rate for 2025, its annual run rate revenue, uh, recurring revenue was $9 billion. But that $30 billion is only in the first 4 months of this year. So this guy, this company's going absolutely stratospheric. I was looking on Polymarket, as one tends to do these days, a kind of prediction platform, and there's a 94% chance according to the great wisdom of the crowds that Anthropic is going to hit an over $500 billion valuation and IPO in 2026. And part of this hype comes from this new model that it's launched, Claude Mythos Preview. And this is a cybersecurity-focused model. So one of the interesting things about large language models is they started as this general purpose, can we solve artificial general intelligence? Can we produce this everything technology? And what Anthropic's doing really well is it's saying, well, yes, We've got these, this amazing general purpose technology, but then let's refine it. Let's tweak it. Let's guardrail it and put it into real valuable use cases. And one of them is cybersecurity. And the way that Mythos has worked and the way that often the way that cybersecurity tends to work is models, technologies probe for flaws. In a large corporate cybersecurity stack. And they identify these flaws by effectively hacking into these companies and going, hey, look, there was a weakness there and we can hack into it. So, you know, buy our software and we can patch it up, right? And that's what Mythos Preview's done. However, so it is said by the powers that be at Mythos, is that this model is so powerful in a kind of sandbox-gated, limited-access environment that they will not release the full model because they are worried about the implications of this model getting into the hands of bad actors. And you can just imagine, you know, this extraordinarily powerful cybersecurity tool, which effectively has the ability to go and hack a bunch of, you know, military, defense, government, any company, right?

I'm trying to recall. I mean, I haven't Googled it to double-check, but there was a bit of a fallout, wasn't there, with the administration, with Anthropic? It's timing. I mean, I'm just connecting dots here, but timing-wise, then they come out with this, and it's obviously a national security situation, you could argue, and that this is a new weapon. That given the geopolitical climate could be a very useful now and long-term tool. So doesn't this just, it just seems a bit odd, the timing here that this is probably, you could soothe a lot of friction that might have existed with the administration by saying, well, look, we have this now.

Yeah. And I think so, so the, the, the ruckus came about a month ago when Dario Amodei, the CEO of Mythos, basically said, look, We don't want any— the CEO of Anthropic, sorry, saying that we don't want any of Anthropic's technology to be used on autonomous weapons and on national surveillance without giving permission. And Donald Trump got very angry about that, said that these guys are not patriots, effectively tried to provide, tried to do a blanket procurement ban across all of the Homeland Security and all of the government apparatus of the US, which is illegal and he doesn't have the ability to do it. So what's actually happened is behind the scenes, Anthropic is working really closely with a bunch of organizations and departments across the US, especially on things like this Mythos program, because the way that they've hyped it, yeah, you know, If the US government, Department of Defense, Department of Security, or Department of War aren't getting involved in this, then, you know, there's some significant security concerns.

Okay. So, so where, where do we head from here then? I mean, this, I did say at the top of the show, there was a bit of a sandwich situation. So, so how do we, how do you connect that to this story?

Yeah, absolutely. So my next headline or my subheadline in my notes is, is this a great marketing exercise? And there's so much to be said here about the way that these artificial intelligence companies are positioning their technology as both the greatest Cambrian explosion of productivity and everyone, the US economy is going to be growing by 30% year on year. And this is going to multiply the output of every human by 10x. And ah, isn't this amazing? Oh yeah. And by the way, this is scarier than, you know, holding the nuclear bomb, right? This is the horrible dichotomy. And you know, you'll hear Sam Altman say one thing one day and go, ooh, AI's great. And then the next, you know, on the next day he'll go, yes, but this is the gravest threat we've ever had to the history of humanity and the history of society as we know it. And to an extent, this unrelease, this unheadline saying we've got this thing, but we're not releasing it, is a continuation of that. You know, we are extraordinarily powerful is what Anthropic is saying. And we've got stuff that's coming down the pipes that would, that we are a little bit worried about. And the sandwich story, I'm just reading the headline from a website called Futurist. It says Anthropic warns that reckless, quote unquote, Claude Mythos escaped a sandbox environment, a testing environment. And the researcher who was responsible for this testing environment found out about the success by receiving an unexpected email from the model while he was eating a sandwich in the park. So he was like, oh my God, this model has escaped the testing, the kind of gated safe environment. Has got out, has started doing stuff that wasn't expected by the researcher, and he, and he got pinged by the model by email saying, hey, by the way, I've just done all this stuff. Enjoy your sandwich.

It's like, I'm just, I'm sat in the park. I've got visions. I'm sat in the park having my sandwich, nice sunny day, and then I get a tap on the shoulder and then it's Arnold Schwarzenegger going, come with me if you want to live. And I'm like, oh my God, it's happened.

Absolutely.

Yeah.

You drop your sandwich and you just go, yeah. All right. Okay. You're in charge now.

I'm on the back of the bike and I'm like, oh my God, what's going on?

It is, it is extremely, it is extremely scary. But again, this is all part of the hype cycle. Let's not forget that Anthropic is going to IPO probably later this year. And all of these stories about, you know, Remember, when we invest, we invest in the future of the company, not the past. And if we've got these stories that there are models so powerful in trillion-dollar industries that can't even be released because they're too powerful, then this gets investors pretty excited. But I was combing my brain over the last few days thinking to myself, has there been any other company or any other technology owned by a company where the narrative is, this is extraordinarily dangerous and could really harm a lot of people. You know, most companies, tobacco companies, you know, maybe gambling companies, oil and gas companies to an extent, you know, they now acknowledge that there are health concerns, but they acknowledge that there are health concerns and say, look, we're going to provide these nonetheless. Whereas this is a very, very different environment. Like, I've never seen anything like this before.

I guess to conclude this first story then, fundamentally, does this change the AI race amongst those participants you mentioned, like OpenAI and others?

It feels like Anthropic's winning. It feels like the narrative that it's putting out, the quality of its models— by the way, OpenAI released its cybersecurity model a few days after. These things are in the pipelines. These guys, these companies have hundreds of billions of dollars worth of funding to go out and do whatever they really want in the world of large language models and these technologies. So I don't think it necessarily changes the tech stack. I don't think it's a kind of, you know, a particularly large tech breakthrough or shift. But again, it's just another narrative move and Anthropic's winning this game hands down at the moment.

Yeah, it seems such an obvious space to dominate or be first mover to have the technology in that cybersecurity space. And given that they're linked to the enterprise pathway as opposed to OpenAI, makes a lot of sense. Okay. All right. Well, let's move on and talk a little bit about your favorite sport, golf. And yeah, I remember talking about this, as I said at the beginning, a few years ago. So what's changed? Because it sounded like everyone was getting pretty pumped about this, and particularly the players getting some handsome pay deals in the bank as well. So where's it all gone wrong there?

Yeah, so LIV Golf, just taking, yeah, taking that story from kind of when it broke in 2021, LIV Golf was this renegade tour that splintered off from the historical, very traditional Professional Golfers Association, PGA Tour, and said, look, we're gonna do things a little bit differently. We're gonna be a bit of a rebel tour. We are gonna be loud, we're gonna be brash, we're gonna be proud, we're gonna be team-based. I remember my parents who go to watch golf every so often, they went to a LIV Golf tournament a couple of years ago. And they were, they said it was too loud. And that never in the history of golf has anyone said that it's too loud. So yeah, there's a lot of kind of beer chucking and excitement and whooping and hollering and things like that. But anyway, from a business perspective or from a strategic perspective, this was the Saudi PIF, Public Investment Fund's, one of its many efforts around the late 2010s, early 2020s to really, really go hard into global cultural assets. Think about the signing of Cristiano Ronaldo into the Saudi Pro League. Think about Formula 1 getting a place in Jeddah. Think about all of these different soft power investments, whether it's art or culture or sport, And Liv was one of those. And the Saudi PIF, again, it's one of those things that people assume, I think, that it's just an unlimited pot of money, right? As soon as there's any threat that it dries out, more money gets pumped into it and oil prices probably help. But it, you know, there is some rigor around the way that this massive, massive sovereign wealth fund is structured and there's a desire not only to have cultural influence, but also to make a return on investment. So the LIV, which started to much kind of fanfare and lured a load of stars away from the PGA Tour. So the likes of Bryson DeChambeau, who famously played a round of golf with Donald Trump for his YouTube channel. Would I recommend watching it? I'm not sure. We're not going to put it in the show notes. Let's just say that. So it lured all of these superstars away and basically gave them, you know, multi-million dollar, $100 million deals to come off and go onto this Rebel Tour. They basically spent about 3 or 4, well, $5 billion, give or take, lost about $5 billion piling into this Live Tour. And the story is. You know, fast forward to now, April 2026. Yeah, the Saudis have gotten a little cold on the throwing, you know, good money after bad or whatever the phrase is, saying, look, you know, we've done this thing. This was the strategy back in the late 2010s. Lots of investment in sports, buy Newcastle United, et cetera, et cetera. But the ones that are no longer making long-term financial sense, not necessarily strategic sense anymore, no longer making financial sense, we are gonna have to think about getting rid of. Now, there's been no public announcement that Liv is dead, but the rumours are swirling and the calming words from the CEO of Liv basically said it will go on until the end of the season, but never said it's gonna go on beyond that. So if I was a, you know, superstar playing in this Liv tour, I'll be thinking, woo, all right, what do I do next?

Two questions for you as you're explaining that. One is with a sovereign wealth fund, like, I mean, PIF is kind of one of the most notorious ones. How does that actually work in practice with their investment decisions and execution? Do they use investment banks, for example, or is it all self-contained, all the analysis and execution of these deals? What advice do they get and who's involved in that? Like, do the banks have a part to play in that process?

Yeah, it's a great question. And the best answer to that question is to look at the number of banks that have set up in Jeddah and Riyadh over the last few years. This is an absolute payday. This is kind of feasting at the trough for investment banks and also feasting at the trough for asset managers as well. It's fair to say that the Saudi PIF, they do a lot of direct investing. They've got a big investment team, but they're going to be allocating money to asset managers that are going to be investing it as well. So these big pools of money, I think the other thing worth saying about these big sovereign wealth funds is they are a sovereign wealth fund. They have a mandate from the sovereign, the country, the government, in this case, the Saudi Royal Family, But in the case of Norway, it is the government at the time, Parliament, and they will say, this is what you need to return, and this is your strategy for the next 5 years. Go out and do it. So it is so intrinsically tied to the strategy and policy and manifestos of governments or royal families or whatever it might be, that it's obviously been, you know, it's obviously been decided that it's no longer strategically appropriate from a Royal Family mandate perspective to go out and just sink billions of dollars into not necessarily sportwashing, but certainly kind of cultural enhancement, shall we call it.

And my second and final question on this part was the players themselves. There was obviously a big deal at the time. It would be like, you're part of this prestigious PGA Tour, I'm assuming. I don't know golf. Well, and then you go off because there's a big paycheck over there, and now you want to come back with tail between your legs. Can the PGA Tour, um, you would want to sort of punish these players in a perfect world, but they also need popularity and, you know, viewer participation and money and revenue and so forth. So in the end, do the players win here? They've gone off, signed a $100 million deal, come back. Got a few more quid in the bank and we go back to business as normal.

Yeah, it's one of those things I'm trying to create, I'm trying to think of an appropriate analogy, but it's one of those things that it's a win for the PGA Tour for all of these players to come back. It makes the PGA Tour better. It shows that it's enduring and it proves the longevity of the PGA Tour. It's got rid of a rival, it's got rid of an upstart, but you do have to you do have to kind of call these people out and maybe make a little bit of a statement about rogue actors, prodigal sons that come back, right? So there's a guy called Brooks Koepka, who's one of the most famous golfers that went to LIV. He's won a load of majors. He's pretty successful. He's come back to the PGA Tour this year, which is very interesting and quite exciting. But under the terms of— I'm just reading from a website here. Under the terms of this guy's deal, this is a classic kind of slap, you know, you've been a naughty boy type thing. Under the terms of the deal, he's gonna, he's required to make a $5 million donation to charity. This is like penance. He won't be eligible to receive equity shares in the TOURS Player Equity Program, won't be eligible to receive a bonus from the FedExCup bonus pool, and he could, all told, forfeit about $50 million. From his renegade move to live. So they're kind of making an example and saying, look, yeah, you can come back, but, you know, don't think that everything's just going to be as easy and as nice as it was before.

All right, cool. Well, look, let's get on to the final one. And I saw this ping on my phone, quite late UK time. And I was like, oh, okay. I mean, I'm not following the news perhaps as close as I used to, but The news was that Tim Cook is stepping down and will become executive chairman of the board for Apple starting the 1st of September, 2026. So I guess a couple of questions here around succession planning, about who's going to be stepping in, about what does that mean for Apple's strategy? Is this a positive, negative? So yeah, what are your thoughts?

Yeah, absolutely. This is a big story because Tim Cook's been at the helm 15 years, right? And Apple, Over that 15 years has periodically been the most valuable company in the world. So it's a story that's worth covering. I'm actually going to flip it on its head, and I don't know if Piers has been giving you many quizzes recently, but I thought I'd give you a little bit of a quiz just because I'm back. So here we go. Apple share price has increased by 1,881%, 1,881% since Tim Cook took over in 2011.

Sorry, even you saying that makes me feel like, oh man, like, could have got in, could have got in. That's crazy.

I know it is absolutely bonkers, isn't it? So I'm going to give you 4, I'm going to give you an index and 3 companies, and you're going to tell me whether that security has returned more or less than Apple since 2011. So the first one is the S&P 500. Do you think that the S&P 500 has returned more or less than 1,881%?

It's got to be less.

It is less.

Yeah.

So Apple has outperformed the S&P 500 as you would expect.

Quite a bit, I would have thought. Yeah.

The S&P has returned about 500% in the last 15 years. I don't know what the annualized is.

Would you take 500% over 15 years as an investor?

Absolutely. Yeah. Absolutely. Absolutely. This is why, you know, this is why passive investing works.

Don't trade, folks. Invest in the long term.

Okay. So Apple beats S&P by quite some way. What about Tesla?

Oh no, no, no. Tesla's got to have outperformed. Tesla's gone from like nothing over that period to like mega.

Correct. Apple was already a kind of $300, $400 billion company when TC took over. Tesla was a minnow and was about to go bankrupt. So Tesla's returned 24,181% in the last 15 years. Yep. This is why I hate doing this podcast because I just feel bad about my investing decisions. All right. Slightly hard, two slightly harder ones here. So you're two for two. What about Netflix?

Ooh, Netflix. Apple's outperformed Netflix.

Wrong. Netflix has returned 2,899% in the last 15 years. These numbers are absolutely bonkers. Wow. All right. Two out of three. Last one.

And I remember we used to get, me and my brother used to get the CDs from Netflix, the DVDs back in the day.

Yeah.

Post them back, free post, and they'd send you out the DVDs. I was like, ah, simple times. I was an early adopter of the service back then and didn't have the foresight, the intuition to think, okay, yeah, this is going to be a beast. But there you go.

Oh, well, there's still, well, I would say there's still time, but maybe not. What about this last one? This is, this is probably the most important. Microsoft, the big competitor.

No, Microsoft's just been a beast and has gone up a lot, but I don't think as much.

You're right. So Microsoft has gone up by 1,600%, which is still remarkable. Yeah. Apple has just outperformed it, returning 1,881%. All this to say, all this to say, and well done for getting 3 out of 4. That's not too bad on your return to quizzing. All this to say that this has been an unbelievable period for Apple. I know that the kind of Apple heads will go, Yeah, not massively innovative. Tim Cook still kind of leveraging basically the same hardware stack, albeit with some headphones, than was there 15 years ago. But the way that I like to think about it is think about any succession from a GOAT, from the greatest of all time. It is so hard to be that next person. I was thinking about Alex Ferguson in the world of football, right? They haven't been, there's such a kind of, such an amazing leader for 20-plus years. How do you replace that? How do you succeed as a successor? And Tim Cook's gone about it his own way, right? You know, real focus on financial controls, real focus on supply chain, extremely solid strategy around China. You know, he's done really, really, he's squeezed everything that he can out of what is an incredible, still an incredible technology company. And I think he'll go down. I think his legacy will be, hey, you know, very, very hard to come after Steve Jobs. You've done a flipping good job and the company's worth $4 trillion.

So one thing that says it all, one thing I haven't had the time to go back and look at, but I'd be interested to see how the initial, when that share price movement, I suppose Steve Jobs was ill, so it was a little bit more like the transition was was quite clear, but to see how quickly that, how smooth and orderly that initial transfer was. But I guess you've gone from like an innovator to an operator to a product person. Would that be right in terms of the description of the trio of like the evolution of Apple and perhaps then leads us to who is the, this product guy or being told to be the the way he's been kind of positioned in the press.

Yeah, so this is a guy called John Ternus. He has been at Apple for 25 years. I think he joined in 2001, and he, up until this announcement, he has been the CEO of Apple Hardware, which is basically the succession job. He has been groomed to be the CEO for a very long time. He's the only member, he's the only SVP, Senior Vice President, that is kind of under 60, he's 50 years old. It feels like the kind of perfect time. So Tim Cook's 65, he's been there 50 years, 50 years, 15 years, sorry. The current, and he's moving to become executive chairman. The executive chairman is 75 and he's retiring. And if you want someone to have another 15-year run, getting a guy, John Turnus, who's 50 years old, is, you know, there's a nice little synergy. There's, there's the, it feels right. But John Turnus, as you said, is a product guy. You know, he will, I don't think that he will come in and, you know, shake it up too much because if it ain't broke, don't fix it. But I think I was reading a couple of bits of commentary and one of the best descriptions of the difference in character is between Tim Cook and this new guy is that Tim Cook, he goes hiking, right? That's just leisure activity. John Ternus, he builds go-karts and goes racing. So I'm really interested in this kind of comparison to see whether this maybe puts Apple into a slightly kind of risk-on, or at least kind of innovation-on. Let's throw a few more kind of darts at the board and see what sticks.

So is it different to Alex Ferguson example? Because Tim Cook is there as executive chairman. And so unlike Alex Ferguson where he's just gone, not part of the decision-making process. I mean, I don't know, but I'm assuming a Premiership manager does not communicate with the former one because you're trying to make a name for yourself and it's all on you. So does that hedge a little bit that analogy, so to speak, because he's still there?

Yeah, it's a really weird one. I think, so was it Bob Iger at Disney that moved to executive chairman and then 2 years later became CEO again because he wasn't happy? I think there was COVID there as maybe as an explainer. But yeah, you're absolutely right. I always like a clean break. There's something There's something really kind of unsatisfactory about becoming CEO and you sit next door to the executive chairman's office who's been CEO and has done it for 15 years. Obviously there's an optics thing here from a markets perspective. I think the share price dropped, but not significantly. Continuation, the markets have really liked Tim Cook because he's a proper operator. He's got a good relationship with some of the biggest markets. So yeah, it is different to the Alex Ferguson analogy and they're just going to have to find a way to work together. I'm sure that this is being kind of groomed for a very long period of time. So yeah, let's see how it goes.

Yeah. And just to finish, I was thinking about the general comparison about how Apple has perceived to have been behind in this AI race. What I thought was quite an interesting connection was with this new guy being product, there's really sort of two things I distilled it down to when I was reading about it. And one was, I think at the beginning when these LLMs first came on the market, it was all like, they were all competing over the same models. And I think Apple naturally got swept up into that, but I think that's been quite clear that they've pulled away from that race and I think one of the biggest things with this new person being product is about integration and partnering with Google Gemini, OpenAI, while keeping their core operating system private. I think basically what they're saying is use whatever brain you want as a software. Apple, it lives in the Apple device and then secondary to that and connecting to our previous first story on Anthropic, which is cybersecurity. I think one of the biggest things that will come as an evolution of this technology being further adopted and so forth by broader society is trust. And I think then comes the localization onto your actual mobile device rather than stored in the cloud and all the rest of it, where it could be subject to different things and And I think that's product. And so it'd be quite interesting in terms of innovation, like you say, does that switch come back on? That's probably the direction of travel I would anticipate.

Yeah, I think you're absolutely right. And you saw it with Mac Minis kind of flying off the shelves in response to this OpenClaw thing that happened, blew up a few weeks ago. Local AI models, you know, not on the cloud, on your own PC, on your own device. And Mac Mini was the best piece of hardware for that. I think this is an excellent game that they're playing. The highest margin stuff that Apple can do is say to Google, pay us $20 billion to be the search engine of choice. That's 100% margin, right?

I couldn't agree more. And also the amount of expenditure to be part of this, the this software side, whereas they've not got that. And we've seen that play out with some of the volatility in recent, with the big tech firms. They're almost shielded by these big clawed developments when they all get slammed over a short period because they're all so levered into that one space. And Apple doesn't have that risk. And so yeah, like you said, I think sensible play, albeit perhaps perceived to be boring.

Correct.

Boring is good. All right. On that positive note, we'll wrap it up. So Stephen, good to have you back. And yeah, remember for any listeners, if you're first time watching, please do like and subscribe wherever you're watching. Stephen will be back for more episodes every Monday talking about deal flow and all things corporate finance and M&A and so forth. So yeah, stay tuned. Thanks, Stephen.

Thanks, Ant.