Fable 5's Ban Is Another Reason to Sell Overpriced Chip Stocks
Fable 5 - as I wrote last week - is significantly better than Opus 4.8. I was maybe 75-100% faster using Fable 5 in terminal vs. Opus 4.8. I imagine that Anthropic’s Fable 5 model will be reinstated with some caveats. Maybe all user data will be shared with the NSA, I’m not sure what the caveats will be. I assume the Government will allow sales to users outside the U.S., so long as all activity goes to the NSA. Until then, former Fable 5 developers lose significant productivity.
Government’s heavy hand should give investors pause:
1.) More companies and individuals will use DeepSeek and other opensource alternatives, which is bad news for the proprietary model companies.
2.) Government interventionism in private markets is never a good thing. Just look at the equity market, which hasn’t traded on fundamentals since 2020’s COVID interventionism (QE, BTFP, fiscal stimulus, various Fed credit programs, zero reserve requirements, low interest rates, deficit spending, etc.), and remains distorted and disconnected from economic reality (don’t look at Federal Govt. figures such as CPI to gauge economic health, as those figures are heavily manipulated - for example, look at CPI growth versus money supply growth over the past year, the latter is a much truer measure of inflation and outpaces the former).
3.) There is the technology element to consider. Fable 5 is so much better than Opus 4.8 and Codex 5.5 that AI model progress has definitely been halted. The more important things I am working on I do not want to work on without Fable. I do not have days to waste why the Federal Government takes an AI primer. Frankly, I don’t know what’s going on. I’ve read all of the notes that have come public. Part of this feels like Bezos pushing Jassy to bitch about Anthropic to Lutnick. Part of this feels like Anthropic has wanted this to happen because it wants Government to subsidize models and wants to be first to be nationalized. But no doubt that AI progress has slowed, which is bad for the chip companies. My guess is that Jensen has already been in touch with the White House as this is not good for NVIDIA (NVDA).
We are going to see a lot more companies tune their own models on prem - and DeepSeek will be the big winner - until the Trump Admin bans DeepSeek and other Chinese models.
Big cluster. Government is never here to help. Ever. Better to get out of the way.