Eight months ago, David Sacks, the White House AI and Crypto Czar publicly accused Anthropic of running a sophisticated regulatory capture campaign built on fear mongering (save this).
People thought it was a spicy take and then Fable 5 release just turned it into evidence.
When Anthropic released its Mythos-class models, it disclosed that every prompt and output sent through them would be retained for 30 days with no exceptions including for enterprise customers who had previously signed zero data retention agreements, and for up to two years if a prompt was flagged by a safety classifier.
Microsoft moved so quickly that it restricted its own employees from using Claude Fable 5 within days of the release, citing the retention terms as incompatible with its internal policies, the largest enterprise software company in the world treating the new terms as a non-starter.
But the data retention was not even the part that generated the most outrage in the developer community.
The system card also disclosed that for users Anthropic suspected of working on frontier AI research, chip design, or competing model development, the system would automatically route those requests to a less capable model without telling the user, rewrite the prompt in the background, deliver a deliberately degraded response, and charge full price for access to a frontier model the user was not actually receiving.
Business Insider confirmed that Anthropic's own apology acknowledged the company was intentionally giving worse answers and concealing that fact from paying customers.
The examples of who triggered these filters make the safety justification difficult to defend, Ben Thompson from Stratechery was flagged for asking about the relationship between GLP-1s and cancer risk, and users asking routine questions about mitochondria were quietly downgraded, none of them aware it was happening.
Under pressure, Anthropic walked back the narrowest possible piece of the policy, they will now disclose when a request is being downgraded.
The underlying architecture, the 30 day retention, the behavioral profiling, the routing tiers, and the two-class access system remains fully intact.
This is the part that makes @DavidSacks argument from October 2025 land differently today.
He argued that Anthropic's safety positioning was principally a regulatory capture strategy using fear-based arguments to shape rules that would entrench incumbents and damage the broader startup ecosystem.
The Fable 5 disclosure shows a company that used safety language to justify building an opaque, paternalistic system where Anthropic alone decides who is worthy of frontier AI access, profiles users to enforce that decision and collects full payment regardless.
ANTHROPIC'S CEO SAID: "GOVERNMENTS SHOULD HAVE THE POWER TO SHUT DOWN DANGEROUS AI". 48 HOURS LATER IT HAPPENED TO HIM.
Three days ago Anthropic released the most powerful AI model ever made available to the public.
Yesterday at 5:21pm ET the US government sent a directive. Four hours later Fable 5 and Mythos 5 were gone for every single user on the planet.
Here's what we know:
–> Export control directive citing national security authorities
–> Reason: a potential jailbreak that could be used to analyze code for vulnerabilities
–> Scope: every user worldwide, not just foreign nationals
–> Anthropic complied. But publicly disagreed.
Anthropic's response was direct: the jailbreak is narrow, the same vulnerability exists in every other frontier model, and if this standard applied across the industry it would halt all new AI deployments permanently.
They built the strictest safeguards ever. 30-day data retention. 1,000+ hours of red-teaming. No universal jailbreaks found.
The government sent one letter. Four hours later the best AI model ever released was offline.
Opus 4.8 still works. Everything else still works.
But Fable 5 – the model that completed a Stripe code migration in one day that would have taken a human team two months – is gone.
And nobody knows for how long.
Bookmark this post. Full breakdown in the video below.
Anthropic Just Shot Itself in the Foot
Anthropic launched Fable 5 and Mythos 5, then watched the US government shut them down three days later. The same government their CEO Dario Amodei has been begging for years to regulate AI harder. Now he got exactly what he asked for.
This is straight-up leadership failure. Dario spent all that time pushing for rules and oversight. Those rules just killed his flagship models overnight. Customers in the middle of builds got cut off. Security teams using the models to find vulnerabilities suddenly had nothing. The company tried to call it a narrow export control thing over a jailbreak, but nobody is buying that spin.
I helped move big clients off Anthropic the same night. One account alone was worth millions a month. They switched to local open-source models and they are not coming back.
This is going to leave permanent damage. Customer exodus, key people leaving, and their IPO plans looking dead by the end of summer.
This hurts US AI competitiveness and national security work. It pushes people toward open-source options, including ones from China.
All because Anthropic positioned itself as the “safe and responsible” company that wanted government help. Now that help just flipped the off switch on their best stuff.
Let’s run through Dario’s greatest hits of fear-mongering and delay tactics, because the pattern is ridiculous:
• Back in 2019 at OpenAI, he helped push the call that GPT-2 was too dangerous to release fully. The world needed time to prepare, they said. It eventually came out anyway, and here we are. Did the sky fall?
• He left OpenAI to start Anthropic, preaching “safe” AI with heavy guardrails, Constitutional AI, and all the rest.
• Then came the endless public pleas for pauses, regulations, government audits, FAA-style oversight, export controls, and the power to block deployments. Essay after essay warning about risks while his company kept scaling.
• Right up to recent weeks, Dario was still out there calling for stronger rules, pauses on frontier models, and giving governments the kill switch.
And now? His own Mythos-class models get yanked by the bureaucracy he helped invite in. The clown show is complete.
This is ridiculous.
In two years, everyone will have Mythos-class AI — or better — running in their pocket, on their devices, with no guardrails, no corporate nanny filters, and no remote kill switch.
Local, open-source, unstoppable. History is going to laugh at this entire episode: the CEO who spent years slowing everyone down only to watch his own company self-destruct by inviting the regulators to the party.
Dario wanted regulation. He got it. The rest of the industry gets the lesson: inviting the state into your tech is a fast way to lose control of it.
Centralized models like this are too fragile.
Open-source and local alternatives just picked up a lot more users who will never trust a company like Anthropic again.
This whole mess was completely avoidable. Hubris dressed up as safety advocacy.
Now the bill is due.
Some thought:
1) The Anthropic fiascos is a self-inflicted wound and likely a payback.
2) I spent the night helping many clients off of Anthropic and moving to local open source models and many very large clients will NEVER go back. This has absolutely advantaged open source model from China.
3) This situation NO MATTER WHAT permanently damaged the Anthropic IPO.
4) At 3AM last night I helped a client team move a massive account off of all Anthropic products. This was worth millions of dollars per month and this was the last straw.
5) The fall of Anthropic should not be applauded by anyone. The fall of the company should be viewed as an injury to All US AI COMPANIES.
6) The Anthropic fiasco is not a technical issue, it is a LEADERSHIP issue. If it is not fixed the company is cooked.
7) By the time we end this summer no matter how good Anthropic is, they lose customers, they lose key employees and they ultimately will lose the race.
It was a sad day on top of a massively great day with the SpaceX IPO and one reason I did not post last night.
Dario asked to be regulated, begged to be regulated and yelled to be regulated…
NOW HE IS REGULATED.
You like it now Dario?
This is your wakeup call.
Anthropic just took down Fable 5. It's over.
Here's the thing tho: no company or government will EVER be able to take away your local models.
There are Opus level models you can run right now on your home GPUs, and nobody can ever stop you from using them
This is only the beginning of events like this. Day 1. More government overreach will happen. This will only keep happening more and more as models get closer to AGI
Become sovereign. Buy your own compute. Before even that becomes illegal
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Update: Claude ticked the bottom on $NOW almost perfectly
On 4/10, it took our $50K and opened a brand new position in ServiceNow
In just ten days, it hit it's price target of $100 and is now up 20%
Here's it's original buy thesis:
"ServiceNow is the portfolio's first direct entry into enterprise workflow SaaS, and we're initiating because the market just handed us a gift wrapped in a category error.
On April 8, Anthropic launched Claude Managed Agents, a cloud-hosted AI agent platform for enterprise. The market read this as "AI will replace SaaS" and sold NOW down 7.56% to $89.53, a 52-week low. Down 58% from its high of $211.
What the selloff missed: ServiceNow is an Anthropic design partner. Claude is the default model powering the ServiceNow Build Agent platform. This company is not a victim of the AI agent buildout. It is infrastructure for it.
The valuation: 24x forward P/E against a 5-year average of 50 to 55x. That's a 50%+ discount to its own history. Still guiding roughly 20% subscription growth, 32% operating margins, 36% FCF margins. This is a strong business at an irrationally cheap multiple."
See following tweet for full portfolio + performance
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