Mar 12, 2026 · 1h 21m · news
Anthropic vs The Pentagon: Who Wins? | The Data Center Arms Race | The Ultimate Stock Picks · 20VC with Harry Stebbings
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In this episode of 20VC, host Harry Stebbings, Jason Lemkin, and Rory O'Driscoll analyze Anthropic's legal battle with the US government, the aggressive AI data center capital expenditures, the looming displacement of junior white-collar labor, and the public market's transition toward growth reacceleration.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 9.1% of the talking time here. How this is scored →
Harry as informed peer 4.0 Guest teaching 3.4 Guest disagreement 2.9 Harry pushing back 3.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:09:07 Rory calls out Harry for breaking stock picking rules
Rory forcefully rejects Harry's stock selections, arguing that picking Nvidia and Reddit violates the assigned topic of evaluating beaten-down SaaS equities.
Hardest push from Harry ▶ 35:37 Harry challenges Rory on university curriculum adaptationHarry directly rejects Rory's claim that universities should update computer science degrees, citing Andrej Karpathy's rapid adoption speed to prove academic institutions cannot keep pace.
Biggest teaching moment ▶ 12:25 Rory contextualizes Anthropic's contract loss mathematicallyRory educates the room by calculating that a $200M Pentagon contract represents just 1% of Anthropic's $1.5B ARR, demonstrating why the loss is noise against massive core growth.
Harry holds his own ▶ 56:19 Harry cites Lovable's ARR benchmarks to frame SaaS growthHarry demonstrates deep market knowledge by introducing Lovable's $300M current ARR and $1B projection to contextualize Base 44's performance within Wix.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Weekly Tech and Venture News Roundup | 5 | 3 | 2 | 6 | Harry presses Jason and Rory on whether the Pentagon dispute will tangibly show up in Anthropic's revenue numbers, prompting Rory to break down their $1.5B ARR math. | |
| Workplace Privacy and the AI Moral Paradigm Shift | 0 | 3 | 1 | 0 | Jason monologues about next-generation CRMs tracking every employee keystroke and the shifting moral paradigm around workplace privacy without host involvement. | |
| The AI Capex Debate: Oracle, OpenAI, and Meta's 24/7 Compute Bet | 5 | 4 | 3 | 4 | Harry questions if Oracle capping data center plans signals an end to the capex hype cycle and brings up rumors regarding Alex Wang's role at Scale AI. | |
| The Economics of AI Pricing: Anthropic's Cloud Code Review | 0 | 4 | 2 | 0 | Jason and Rory discuss developer backlash over Anthropic's $20 Cloud Code Review pricing, contrasting consumer expectations with multi-agent parallel compute costs. | |
| The Death of the Junior Employee & Higher Education's Vanishing ROI | 6 | 4 | 4 | 7 | Harry pushes back on Rory's expectation that higher education can adapt, citing Andrej Karpathy's rapid tool adoption curve as proof that universities move too slowly. | |
| Mass Unemployment Skepticism and the Threat of Political Backlash | 5 | 5 | 5 | 6 | Harry presses Rory on whether displacement across legal, CS, and support equates to mass unemployment, leading Rory to playfully invoke 200 years of economic history. | |
| The Era of Agentic Software and Agent-Led Growth | 4 | 3 | 2 | 3 | Jason explains the buyer pull for AI agents over humans, while Harry shares his personal experience with training executive assistants who eventually leave. | |
| The Forward Deployed Engineer (FDE) Bottleneck in AI SaaS | 5 | 3 | 2 | 4 | Harry prompts Rory on Intercom's competitive stance against Sierra, leading Jason to highlight forward deployed engineers as the main operational bottleneck in AI SaaS. | |
| Tracking Major VC Funding Rounds and AI Market Updates | 4 | 2 | 1 | 2 | Harry recaps major venture rounds including Legora and Founders Fund, prompting Jason to discuss how public markets now demand revenue re-acceleration. | |
| Scale vs. Deceleration: Figma, Anthropic, and CrowdStrike | 0 | 4 | 3 | 0 | Rory and Jason debate the technical definition of gentle deceleration versus terminal GDP growth without active host commentary. | |
| Wix and Base 44: Can Small Innovations Save Legacy SaaS? | 6 | 3 | 3 | 4 | While Rory models Base 44's ARR potential inside Wix, Harry steps in with Lovable's $300M ARR run rate and $1B projection as an industry baseline. | |
| The Cross-Sell Litmus Test for Legacy Platforms | 2 | 3 | 2 | 2 | Jason and Rory debate whether legacy platforms like Wix can successfully cross-sell acquired AI tools to millions of existing website owners. | |
| Figma Make and the AI Integration Challenge | 5 | 3 | 3 | 5 | Harry transitions to legacy web builders and asks Jason directly if his poor experience testing Figma Make altered his optimism as a shareholder. | |
| The Existential R&D Crisis and the Need for Young Talent | 6 | 3 | 3 | 6 | Rory discusses legacy SaaS R&D struggles, and Harry offers the sharp counter-perspective that companies need 18-year-olds entrenched in AI subcultures rather than indoctrinated junior developers. | |
| Public Market Stock Picks: Growth Momentum vs. Legacy SaaS | 6 | 4 | 7 | 5 | Rory forcefully calls out Harry for breaking the agreed stock selection criteria by picking Nvidia and Reddit instead of pure software/SaaS equities. | |
| Value Picks and the 'How Much for How Much' Valuation Dilemma | 5 | 4 | 3 | 4 | Rory categorizes software picks into value, GARP, and high-growth buckets, while Jason and Harry evaluate valuation multiples and the 'how much for how much' dilemma. |
Statements from this episode (45)
O'Driscoll: Anthropic May Win Lawsuit But Lose Broader Government Battle
“The consensus is, in law, Anthropic would probably win a good slug of this case, which is different than saying they're going to win the fight.”
O'Driscoll: Free AI Products Will End As Compute Costs Mount
“The idea that you can just have all this shit for free is at some point going to stop because someone's going to have to cover their nut.”
Stebbings: Oracle and OpenAI cancel flagship data center expansion
“Oracle and OpenAI end plans to expand flagship data center”
Stebbings: Meta moves to absorb excess AI data center capacity
“Meta moves in to absorb the surplus AI data center capacity”
Lemkin: Corporate AI Data Center Budgets Will Come From Cutting Junior Roles
“I think getting rid of juniors is where we get budget for these data centers, in part.”
O'Driscoll: Displacing Overeducated Young Elites Triggers Major Political Instability
“You can have dispossessed urban poor forever, and nothing happens, but if you piss off the twenty-something-year-old middle class, the overeducated elites, they tend to cause trouble.”
O'Driscoll: OpenAI and Anthropic Face More Attack Surface Than Any Global Company
“The truth is, OpenAI and Entropic have the most amount of surface area to attack of any company in the world.”
Lemkin: The Era of Gentle Deceleration in Tech Is Over
“The era of gentle deceleration has ended. It's dead.”
Lemkin: Ambiguous risk causes enterprise software buyers to abandon sales deals
“It only has to be, the risk only has to be ambiguous in a B to B deal for you to lose and go with another leader. It just has to be, it's a little bit less secure or they went down for two days or the database was left open.”
Lemkin: US government will block Anthropic indefinitely regardless of court rulings
“The government's going to say you're either going to agree to this or we're going to freeze you out of the US economy. And it doesn't matter what a court says. Because they'll come up with another justification. There'll be another one. There'll be a different…”
O'Driscoll: Anthropic will eventually submit to government demands to protect B2B revenue
“They won't clearly get a two hundred million dollar revenue deal with the U S department of war, but in a perfect world, if they bend the knee prevail on the law, what we've seen in multiple other situations is you end up at some kind of, you know, acquiescenc…”
Lemkin: Investor greed overrides media controversy during tech startup IPOs
“IPOs are very binary, right? Either folks get super greedy. And they're genuinely massively oversubscribed or they barely get done at all. So I just think that is overstated by the media that there's existential IPO. Until, until it shows up in the numbers, I …”
Lemkin: Next-Gen AI CRMs Cannot Function With Workplace Privacy
“App is, this is becoming necessary core CRM functionality to record and manage every keystroke, every interaction, everything you type, everything you do, because otherwise you can't automate a CRM. Like, the next generation CRM just does not work if you have …”
Lemkin: AI Boom Will Lead Tech Leaders to Abandon Moral Standards
“I think we're gonna discard more and more of our previous moral standards, and maybe it's, that's the AI life, but I have a little bit of anxiety here.”
Lemkin: Oracle lacks the cash to keep up in AI compute race
“Oracle doesn't have the cash to keep up, going to Harry's point. It just doesn't have the cash.”
O'Driscoll: AI capex overinvestment is guaranteed by tech giants' game theory
“By definition, if six or seven people articulate that that's the game they're playing and only six or seven people matter in this discussion, then it is almost Tautological to say we're going to over invest because that's what game theory says until such time …”
O'Driscoll: AI capex overinvestment cycle will not correct in 2026
“Until that happens. We're going to over invest. And I don't think it's happening in 20, 26.”
O'Driscoll: Oracle will lay off 20k to 30k employees over AI capex strain
“The only person that's even struggling slightly to cover their nut is Oracle, right? Because they had the weakest balance sheet and the least compelling use case, which is why at some point they're going to throw 20 or 30,000 people over the side to make the P…”
Lemkin: Junior role elimination will spread to sales by 2027
“This is my big worry for 20, 27 is it happens. It's going to be true in sales. It's already true in support.”
O'Driscoll: US tech companies employ 3.2M people, including 800K developers
“Entire tech industry, excluding tech people employed in non-tech companies. Technology, NAIC classification, 51 tech companies, 3.2000000 people in the United States, of whom roughly 800,000 are software developers, right?”
O'Driscoll: AI will not drive overall US unemployment above 10%
“Over the, again, I want to be over the medium term, the technology takes longer to diffuse than we in Silicon Valley allow, and people are more adaptable. So over the medium, I'm not, I don't see any kind of 10% plus tech of an unemployment.”
O'Driscoll: AI job displacement among graduates will become political by 2026
“That to Jason's point, I know if it's a moral issue, it's an economic issue, and I predict in 26, it's going to be a political issue.”
Lemkin: AI Support Agents Always Rank in Top 10% CSAT
“Everyone's data that works in a heterogeneous human AI agent environment, the CSAT is always top 10% for the agents. It's never number one. They never say that the number one most popular person is always a human, but the agent's always in the top.”
O'Driscoll: B2B Software Will Fully Automate Tasks Within 12 Months
“We might be at the start of some of this agentification, and the next 12 months will be B to B companies saying, now I finally can automate this task entirely.”
Lemkin: Sam Blond's Monaco Closed Seven Figures in Five Days
“This Monaco one that Sam Blond did, I mean, they closed seven figures in their first five days and they have 60 days of people lined up”
Lemkin: SaaStr Built AI VP of Marketing That Led Staff Meeting
“We built our own VP of marketing literally yesterday. This week was the first time it led our human staff meeting. Our AI VP of marketing led the team meeting. It led the meeting. It summarized every single metric, every single thing the humans on our team had…”
O'Driscoll: Intercom will capture significant market share in AI customer service
“I'll tell you what I am betting on. I'm betting on that they can carve out a significant space in that market for that product, and that they've had explosive growth in it, and coming from the sass, I'm betting that I'm betting that that team coming from the S…”
Lemkin: Shortage of forward deployed engineers limits AI B2B growth
“FDs forward deployed engineers for the moment are a limiting factor. And let me explain what I mean. What it means is no one has enough fully trained FDs that, that can get a customer up and running fast enough. No one has enough of these resources.”
Lemkin: Human-dependent AI B2B startups share services business constraints
“They're not long-term services businesses, but if you need humans to train it, if you need humans to manage it, if you need humans to iterate it, you're, you are, you have the same constraints that services businesses have.”
Stebbings: Founders Fund closing $6B in new capital after deploying $3.3B in 11 months
“Founders Fund are closing in on six billion dollars of new funds. They invested the last 3.3 in 11 months in amazing businesses like SpaceX and Stripe and Anduril.”
O'Driscoll: CrowdStrike Will Beat 23% Growth Guidance by Two Points
“Slight deacceleration, 27 to guidance of 23, 27% revenue growth, guidance of 23, they'll probably beat that by two.”
Lemkin: Public Markets Have Abandoned Software Companies That Aren't Accelerating
“The markets have been brutal this year, and I think it's not that you're wrong analytically or empirically, but the markets have given up on folks not accelerating. They've just entirely abandoned it.”
O'Driscoll: Markets Reset Decelerating SaaS Valuation Multiples to 8-9x Revenue
“What they've done is they've said for three years, I thought it was temporary, and now I recognize it's permanent, and now I'm going to value based on this growth rate, take a hit off you for technical obsolescence and the terminal value, take another hit off …”
Lemkin: Wix's core paid customer base fell 1.2% last year
“Well, the challenge is their core customer base, their core paid customers declined 1.2% last year.”
Lemkin: Wix added $100M in AI revenue via Base 44 acquisition
“And what they'done better than most public companies is hell with a great acquisition. They got a hundred million of AI revenue on top of it.”
O'Driscoll: AI Cross-Sell Failures Invalidate Legacy SaaS Acquisition Playbook
“If you can't cross sell the new AI product to existing customers who are trying to do the same thing just with an older technology, then the cross sell acquisition and cross sell story doesn't work. This is as good as it's going to get if you're an old school …”
Lemkin: Best-effort quarterly software releases cause company failure today
“You're not going to win today if you're doing quarterly release, best effort releases. And I would say most public software companies are also, and many struggling unicorns, I would say almost all struggling unicorns are doing best efforts, quarterly releases.…”
O'Driscoll: Legacy SaaS should acqui-hire YC teams to accelerate R&D
“The odd thing is this is precisely when you should be hiring young people who are coming in replete with the knowledge and unencumbered by priors. So maybe all those unemployed computer science, but maybe some of them, maybe in some of these SAS comes genuine …”
O'Driscoll: SaaS companies failing AI transition will trade at 8x EBITDA
“Because if you don't bring this out, you're going to trade at eight times EBITDA, which at best is two or three times revenues, and it's going to be pretty Frickin unsatisfactory for the people who paid 30 times.”
Lemkin: Growth momentum is software's only defense in the AI age
“I'm betting on momentum is the only thing that's going to save us. Save us in the age of AI. So I'm betting on overpriced Palantir, Cloudflare, which is re-accelerating and benefiting from AI, and Shopify which is gaining market share.”
Lemkin: Figma is no longer a world-class product after Make release
“After using Make, I cannot do Figma. I cannot do Figma after make. This is not a world-class product.”
Stebbings: Nubank will expand into the US market
“They're going to enter the U S it's a good bet. They've still got David at the helm. They're growing 28% year on year. I think we, I think new banker incredibly solid.”
Lemkin: Refuses to invest in Snowflake or MongoDB because they lack founders
“The only reason I ding Snowflake is, and this is no, I couldn't do better is it's not founder led. And it's just, that's my thesis today. Like I can't pick Mongo or I killed Mongo or Snowflake just on not being founder led.”
O'Driscoll: Salesforce will thrive long-term like legacy system-of-record giants
“All the big pre-SaaS companies that had systems of record, Oracle, PeopleSoft, which rolled up into Oracle and SAP. Survived and financially thrived, even if they're not exciting in the age of cloud. And I, my guess is Salesforce does the same in a way that th…”