The FDEs are coming; Anthropic goes vertical
Applied picks and shovels
Note: trying out a new format… commentary on news from the week, and some words about what’s on my mind. We’ll see where this goes.
To predict the future of software, understand its present
Everyone’s trying to figure out what’s going on in enterprise software. But people misunderstand enterprise software. Because most people experience software as tools for personal productivity, but enterprise software is built for organizational productivity, which is an entirely different set of problems: planning, coordination, and execution at scale.
This is why you’ll hear people declare that “spreadsheets are better” than the enterprise applications that replaced them. And from a personal-productivity vantage, perhaps they’re right. From an organizational perspective, they’re a disaster.
We’re likely to see similar shifts in AI as we move from predominantly single player chat apps to enterprise systems orchestrating always-on background agents.
Right now most of the AI conversation is dominated by the personal experiences of individual productivity. But individual productivity is not transformational, despite how magical it may feel. Organizational transformation is where the real phase change occurs, and the ultimate productivity unlock that will usher in the AI era.
It’s there that the coming software wars will be won.
Frontier labs want a piece of the FDE pie
I tweeted last week wondering where all of the FDE-built solutions were, given the focus that OpenAI and Anthropic have at least ostensibly had on their Applied AI efforts. And the universe answered… or at least, acknowledged that they were missing.
Anthropic launched a $1.5B FDE JV vehicle Monday with Blackstone, Goldman, and H&F. Within hours, news broke that OpenAI is launching a $10B vehicle called The Deployment Company with TPG and friends.
Expect some tension with traditional SIs that the frontier labs have been courting. These moves are in reaction to demand and bottlenecked deployment process, but you also have to think there’s a large component that’s capability related.
I’m also hearing slightly different approaches by the two labs in terms of how they’re building these firms, and the talent profiles they’re after. You’ll likely see more on this soon.
Anthropic goes vertical
And no, I am not talking about their run rate. In this case, I’m talking about their focus on financial services. Anthropic revealed on Tuesday that Financial Services was their 2nd largest source of enterprise revenue as they announced 10 new domain specific agents. This came at an event in NYC on Tuesday. This was accompanied by a new Managing Director of Financial Services hired from Goldman Sachs, where she was formerly COO and Head of Product for Core Engineering.
Unlike previous hires, this did not send Goldman Stock plummeting. FactSet, Morningstar, S&P Global, and Moody’s were however not so lucky.
The company also announced a major partnership with FIS, indicating that they still continue to partner closely with leading enterprises rather than compete with them. Given the growth rates, it’s hard to argue with the strategy. Someone tell $IGV. FIS for its part launched a Financial Crimes Agent powered by Claude. Hopefully for prevention, those names are always a bit confusing.
Another interesting note: 40% of Anthropic’s top 50 customers are now financial institutions.
SAP locks the front door
SAP has moved to ban unapproved third-party agents from its platform; The Information says it’s aimed at OpenClaw. They join HubSpot, Workday, Salesforce, and most recently ServiceNow (announced at Knowledge) as companies locking down and/or monetizing access to their systems of record.
This might make near-term sense as they’re looking for revenue streams in the age of AI and need answers for Wall Street. But long-term, we’ll see. AI is going to trend towards openness, and as agents become increasingly more capable and valuable, they’ll gravitate to the platforms that support them best.
The security aspect is real, though, and puts these vendors between a rock and a hard place. And while that rogue employee with elevated permissions may get fired for hooking up their OpenClaw and doing damage to the ERP, you can bet that customers will blame SAP for it. Eventually we’ll have good permission models for agents. Today, they’re not quite there.
Salesforce loses its head, and the market cheers
Reception to Salesforce Headless 360 launched at TDX a few weeks ago has been surprisingly positive. It’s the right move— systems in the AI era will demand openness, and by gating access, you’re cutting your customers off from progress. It also puts a lot of pressure on your teams to build leading 1st party agent experiences, which is unfair. Salesforce has built its kingdom on an open ecosystem, and it’s great to see them not just embracing this for a new age, but leading. (One notable negative voice on LinkedIn was an exception, as he appeared to believe “headless” meant “no people.” Grim.)
Look for Salesforce to foster a large 3rd party agent ecosystem, as they’ve done with their ISVs in the past. The last mile is always the hardest part of value delivery, and that’s even more true with AI, as earlier FDE JV news makes abundantly clear. Salesforce is smart to look to partners for help.
The question however remains monetization. As other SORs have, they’ve indicated that they’ll monetize access to data. There’s a much longer post to be had about this, but some more customers are predictably and vocally upset, viewing this data as theirs, and not Salesforce’s to monetize. We’ll leave this debate for later.
For now, we’ll commend them on the bold first steps to transition from an historically application-layer license focused vendor to a true infrastructure platform. It’s a tough shift, but they’re leading the way. For the benefit of their customers, let’s hope they succeed.
xAI is a… Neocloud?
A few weeks ago xAI made waves with its conditional right-to-acquire Cursor for $60B. This week, they signed a massive compute deal, giving Anthropic access to a bunch of much needed Colossus capacity… in space. It’s an interesting twist and further proof that it’s a lot easier to sell picks and shovels in this market. And that we’re still really early on in the AI application layer, which is mostly dominated by coding agents and their adjacencies.
The jury is still out on whether this signals a detente in the Elon-Dario feud. My guess is no.
Baseten pushes the Frontier
Baseten launched their Frontier Gateway on Wednesday, calling it “the fastest path from trained weights to production API.” Technically speaking, it allows labs to “launch a production-grade, multi-tenant inference API on Baseten without having to build or buy a separate gateway.”
I found this personally very amusing because the feature set— authn/authz, key management, rate and usage limits, analytics, security, and billing/metering— are the exact same feature set of the traditional API Management market (including Apigee, where I learned almost everything I know, and without which I wouldn’t be where I am!).
As the AI market develops, it’s increasingly clear that many problems are truly infrastructure and coordination problems, and that the lessons of distributed systems are infinitely relevant.
Everything, including applications, are becoming infrastructure for agents. Act accordingly.
Tuhin’s appearance on Sarah Guo’s No Priors podcast also had some great quotes.
AI moves fast… but AI fundraising moves even faster
As the ink dries on their inaugural $100M at $1B, Core Automation is in the news again for another potential funding round. Not a surprise given the team contains a few key folks from OpenAI, as well as DeepMind.
We don’t know much about the company beyond the focus on continual learning, but the pace is dizzying. The market is weird, and I expect it’s going to get even weirder. The stakes are just too high.
The initial round was notably led by Yasmin Razavi at Spark, the undisputed top investor at the moment, owing to her generational early bet on Anthropic, and growing power player Casey Aylward at Accel, who is fresh off of Astral's acquisition by OpenAI and an investment in Periodic Labs.
That’s all for this week. If time allows, I’ll keep this going. Let me know if you’d like to see it continue.