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This is not how it works. First, revenue is irrelevant. Second, the investment isn't a loan that they need to repay. They are getting equity. Third, Anthropi
by mbesto 2y ago
This is not how it works.
First, revenue is irrelevant.
Second, the investment isn't a loan that they need to repay. They are getting equity.
Third, Anthropic is exclusively using AWS to train its models. Which, yes, means if AWS gives them $4B and it costs them $500M/year to pay for AWS services then after 8 years, the cash is a wash. However this ignores the second point.
Fourth, there is brand association for someone who wanted to run their own single tenant instance of Claude whereby you would say "well they train Claude on AWS, so that must be the best place to run it for our <insert Enterprise org>" similar to OpenAI on Azure.
Fifth, raising money is a signaling exercise to larger markets who want to know "will this company exist in 5 years?"
Sixth, AWS doesn't have its own LLM (relative to Meta, MS, etc.). The market will associate Claude with Amazon now.
- warkdarrior 2y ago> Sixth, AWS doesn't have its own LLM (relative to Meta, MS, etc.). The market will associate Claude with Amazon now. Amazon/AWS has their line of Titan LLMs: https://aws.amazon.com/bedrock/titan/ https://aws.amazon.com/bedrock/titan/
- mbesto 2y agoFair. I wasn't aware of that, for the same reason that if you search Titan vs Claude on HN, you'll find way more mentions of Claude: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=titan%20LLM&sort=byPopularity&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=claude&sort=byPopularity&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... I think its fair to say this is also a hedging strategy then.
- whatshisface 2y agoThe difference between things you'd say like "it's true that..." and "the market will associate..." basically is the definition of a scam.
- mbesto 2y agoUmmm okay? A scam implies someone is getting hurt (financially, emotionally, etc.). Who's getting scammed here?
- whatshisface 2y agoThe big tech companies are spending enormous amounts for part ownership in startups whose only assets are knowledge that exists in the public domain, systems that the companies could have engineered themselves, and model weights trained with the buyer's own capital. The people who will get hurt are public investors who are having their investment used to make a few startup people really rich.
- prewett 2y ago> whose only assets are knowledge Knowledge is quite the useful asset, and not easily obtained. People obtain knowledge by studying for years and years, and even then, one might obtain information rather than knowledge, or have some incorrect knowledge. The AI companies have engineered a system that (by your argument) distills knowledge from artifacts (books, blogs, etc.) that contain statements, filler, opinions, facts, misleading arguments, incorrect arguments, as well as knowledge and perhaps even wisdom. Apparently this takes hundreds of millions of dollars (at least) to do for one model. But, assuming they actually have distilled out knowledge, that would be valuable. Although, since the barrier to entry is pretty low, they should not expect sustained high profits. (The barrier is costly, but so is the barrier to entry to new airlines--a few planes cost as much as an AI model--yet new airlines start up regularly and nobody really makes much profit. Hence, I conclude that requiring a large amount of money is not necessarily a barrier to entry.) (Also, I argue that they have not actually distilled out knowledge, they have merely created a system that is about as good at word association as the average human. This is not knowledge, although it may have its own uses.)
- PittleyDunkin 2y agoIf the scam only hurts investors i'd say it's likely a net benefit to humanity.