Anish

Son, husband, 2x dad, and founder @get_dac

Building digital agreement-driven governance for machines

Discover • Agree • Compute

[Anish @AnishDAC]

With all the discussion about AI’s progress this week, I keep coming back to how we govern what these systems actually do.

When an answer or action depends on an agreement, you should be able to see the rules behind it.

Here’s what I mean.

“Can I stop a prepayment?”

The answer might take you through three agreements. You should be able to follow the reasoning and see the language behind it.

If we use agreements to coordinate economic activity, why would we expect AI agents to operate without understanding them like this?

Understand · 1 of 4

[Anish @AnishDAC]

@DavidSacks @mirandadevine The other path makes no sense. Agreements govern behavior and assigns authority - that is how you separate intelligence from authority

[Anish @AnishDAC]

@bgurley Correct, and this comes down to agreements. It is exactly how we do this across society. Turn that digital and executable and you end up with an agreement-driven governance system

[Anish @AnishDAC]

@bgurley Correct and what he is describing is an agreement-based governance system

[Anish @AnishDAC]

@nikesharora @satyanadella Correct. What he is describing is an agreement based governance system

[Anish @AnishDAC]

So... an agreement based governance system

[Satya Nadella @satyanadella]

https://t.co/MjwFy73LOF

[Anish @AnishDAC]

@DavidSacks @mustafasuleyman Do not want to get into a rabbit hole, but right should be assigned if this is the case. Not saying it is, but if it is, then an entire infrastructure around legal primitives matters

[Anish @AnishDAC]

@lpolovets It's a right... in a binding contract. Binding contracts are not expectations and hope, they literally govern the transaction. The most responsible thing is to understand all your rights and obligations, and their implications.

When you sign and agreement, it matters.

[Anish @AnishDAC]

@alexsongis Exactly 💯

[Anish @AnishDAC]

@zachtratar Agreed 💯

[Anish @AnishDAC]

@scottastevenson Exactly 💯

[Anish @AnishDAC]

@sriramkri Dude, exactly. Agreements matter. Knowing what you signed is key. No one is defending Day One but, c'mon - you can't go crying when things don't work out the way you want because you don't fully understand the implications of what you signed. That's on him imo

[Anish @AnishDAC]

@isaiah_p_taylor It's important to just have a simple list of all your rights and obligations, and their implications for every transaction agreement. Without it, you end up ina situation like this. Unfortunate but if you don't fully understand what you're signing, that's on you

[Anish @AnishDAC]

@AdrianDittmann Winners don't quit

[Anish @AnishDAC]

@IlliquidInsight Do it in your 20s - worth the sacrifice

[Anish @AnishDAC]

@Jason What do you call a cow with no legs... ground beef 🐮

[Anish @AnishDAC]

@junkbondinvest Agreed on looking at the share of the book. How much of that 22% can refinance normally, and how much needs extensions or LMEs? Software... woof, that smells of LMEs

[Anish @AnishDAC]

hmm, this is pretty interesting...

The senior/junior split can explain 98 vs 10, even with equity at zero. But it doesn’t explain why the senior loan is worth 98 today.

The 98 vs 86 comparison seems more telling. Are FSK and TCPC holding the same claim with the same rights? If so, what assumptions explain that gap? I used to do private market marks, so I know how the same asset can be "valued" at different marks across even our own firm... so across the market is not surprising.

Would be useful to see the payment waterfall, what backs each loan and the recovery assumptions behind those marks.

[Anish @AnishDAC]

@deedydas Interesting! I actually just made a video this week on how if a labs revenue doesn't grow as fast as forecasts, how it impacts the circular financing situation. Worth a watch...

https://t.co/7ruYIXru8r

[Anish @AnishDAC]

These are genuinely nice charts, @a16z. But you skipped circular financing, so I made a quick video on it (see below 👇).

A little about me and why this is relevant. The weekend before Lehman failed, I was on the advisory team that helped issue their final CLO. I spent the whole great financial crisis (GFC) in CDOs, CLOs, and CDS. What I took away from that period of time was EVERYTHING runs through the agreements, and those agreements are all interrelated.

So when Oracle’s 5yr CDS hit a record last week, wider than 08, I decided it was time to pay attention. We know debt informs equity, and when protection gets that expensive, you really have to start asking what if?

So let's follow the money:

→ Nvidia funds OpenAI
→ OpenAI buys compute from Oracle
→ Oracle buys chips from Nvidia

But what if demand drifts to cheaper open models (a very real concern at the moment)?

• The labs would grow slower than the projections they raised the debt on
• But they’d still owe the same
• Debt Service Coverage Ratio takes a hit
• Each company’s revenue is another one’s bill, so the whole circle of participants eventually feels it

Btw, you only really see this coming with certainty by understanding the agreements and how they work together. Normally, this takes weeks with intense iteration. But you know what? The market won’t give you weeks when it really matters... The movie Margin Call had it right: be first, be smarter, or cheat.

I’d rather be the first two, never the latter. This is one reason I built DAC: so anyone can SEE and understand the risks and opportunities through scenarios embedded across agreements, before you need them, or instantly if required.

It is very important to know your options before the trade unwinds because when it unwinds... it unwinds fast!

Now, I am not saying this will happen, but it is important to know what-ifs so one can plan and be positioned to react accordingly

[Anish @AnishDAC]

7/7

Not saying any of this will happen. No missed payment has been reported, and this isn't investment advice. But it's better to know who holds what before the market tells you.

Know your options before you need them.

[Anish @AnishDAC]

1/7

When an AI chip loses value, who pays?

Amazon is reportedly in talks to put about $8B of Nvidia chips into a vehicle and lease them back. And per Reuters, Anthropic's IPO filing shows Broadcom may lend it up to $42B for its leases.

[Anish @AnishDAC]

6/7

Btw, you only see this by reading the agreements together. Six agreements, one chip. That's normally weeks of work, and the market won't give you weeks when it matters. That's why I built DAC, so anyone can SEE the what-if across the agreements behind their positions.