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DW D.A. Wallach On This Week in Startups

“The actual greatest business in the history of the stock market over the past hundred years… was Altria, Philip Morris. And you go, well, why was that such a great business? Well, enormous gross margins and an incredibly addictive product with virtually unlimited demand… So I think the fundamental question for Anthropic and all the players in this market is basically, is intelligence the new cigarettes, right?”

This Week in Startups · Startups & Venture · October 2026

“The actual greatest business in the history of the stock market over the past hundred years… was Altria, Philip Morris. And you go, well, why was that such a great business? Well, enormous gross margins and an incredibly addictive product with virtually unlimited demand… So I think the fundamental question for Anthropic and all the players in this market is basically, is intelligence the new cigarettes, right?” — D.A. Wallach, This Week in Startups

Context

Jason Calacanis had just called Anthropic the greatest business in the history of capitalism, after its S-1 filing. Wallach answers with the tobacco comparison, then points to the S-1's figure that customers spend only about a tenth of a percent of operating costs on AI.

Listen to the episode → More from D.A. Wallach → More Startups & Venture quotes →

Transcript

This Week in Startups Around 10:23 into the episode
D.A. Wallach

…so as a way of signaling how confident they are that AI is going to cure cancer. So I would view this as a very toppy signal. You know, when people are willing to literally commit suicide because they believe so much in their religion, it's interesting. I'm not sure we've ever seen it. It's like,

Jason Calacanis

no, no, I think this is the buy sign. It's the ultimate buy sign. They're literally willing to ski without a helmet. They're like, this is fine.

D.A. Wallach

It's all on the line. Now, Jason, and it didn't occur to me until you said this is the greatest business in the history of capitalism. The actual greatest business in the history of the stock market over the past hundred years, as you guys may know, was Altria, Philip Morris. And you go, well, why was that such a great business? Well, enormous gross margins and an incredibly addictive product with virtually unlimited demand. So no check. At least 10 years ago, the number I heard was still today a billion cigarette six sold every day around the world. 1 billion. So I think the fundamental question for Anthropic and all the players in this market is basically, is intelligence the new cigarettes, right? So far, a little free sample. The drug dealer's given a free sample to every company in the world, and everyone's…

Jason Calacanis

spending 2% on

Lon Harris

Claude,

D.A. Wallach

on intelligence broadly? I mean, if they're spending a tenth of a percent on Claude,

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

More from This Week in Startups

“The thing I don't like about being anthropic right now is every person in the world has a huge financial incentive to figure out how to compete with your product cheaper. Okay. Everybody, like, it's the biggest, biggest pot of gold in human history is to figure out how to offer intelligence for free right now. So, you know, I don't like the idea of having that target on my back.” — D.A. Wallach, This Week in Startups “If you look at any company or any team, something like 10% of what you do is written down and 90% is spoken. It's all forgotten. And so where does that all go? And how do I make that actionable for you?” — Shishir Mehrotra, This Week in Startups