4 ms·

How are they not overvalued? At some point OSS will be sufficient for most businesses, what then?

by xvector 8mo ago

phreeza 8mo ago
These companies are spending billions on custom datasets for a gazillion of valuable tasks and are clamping down on exfil for distillation. It's not guaranteed open source models will continue to keep pace.
- CuriouslyC 8mo ago
  And yet open models have been tailing closer lately?
- marcyb5st 8mo ago
  China might purchase the data and train their models just to make the AI bubble pop. A few billions to throw a wrench in your competing superpower economy might be totally worth it
  - zozbot234 8mo ago
    If they did that it would be pursuing a commodify-the-complement strategy of some kind, not just "popping" a bubble. Same as nVidia publishing their own open models. If anything the value of everything AI would rise even further due to Jevons' Paradox.
mcmcmc 8mo ago
They’ll become commodity AI compute providers while training and selling premium foundation models.
vessenes 8mo ago
What do you value a company at that has gotten to $14b in revenue in 3 years and has 60%+ margin on inference? Just out of curiosity.
- xvector 8mo ago
  I am struggling with this because I have an Anthropic offer vs another equivalent offer that is all cash. But project out forwards. - What happens when Google builds a similar model? Or even Meta, as far behind as they are? They have more than Anthropic in cash flow to pour into these models. - What happens when OSS is "enough" for most cases? Why would anyone pay 60% margins on inference? What is Anthropic's moat? The UX is nice, but it can be copied. And other companies will have similarly intelligent models eventually. Margins will then be a race to the bottom, and the real winners will be GPU infra.
  - jrjeksjd8d 8mo ago
    I've been in this situation before. Anthropic has a stupid business model but the market can stay irrational longer than you can stay solvent. If you get in there you will be aligned with people who structurally do not lose.
  - underyx 8mo ago
    If you have an offer, you can and should ask this question of whomever you're coordinating with. They will give you an honest answer.
  - fragmede 8mo ago
    Big picture, sure. We can talk about the millions that corporations will make and who's going to do what. But you're a person. $1 million in options is probably meaningful for you. Companies aren't IPOing, but the secret is that they're still paying employees cash for their options. SpaceX employees have had what's called a tender, which means they get to sell some of their hypothetical SpaceX options for cold hard cash in the bank that you can use to pay your mortgage. There's zero guarantee that Anthropic will do such a thing before the bubble bursts, but if they do, and you're there, who cares about a software company moat when you have enough money to buy a castle in Napa and pay to have a real actual moat with water in it and crocodiles, if that's what you want. Others are made of different stuff, and are going to go right back to work, even though they could go off to a beach for the rest of forever somewhere.
Yizahi 8mo ago
Then they will fall back on the selling their other real competitive products - hardware accelerators, phones and PCs, cloud storage and cloud compute, enterprise software, databases, operating systems, office and media suits... Oh wait...
nikcub 8mo ago
Funny I consider this valuation modest considering what the max extent of the investment thesis is here. SaaS and legal market caps have already contracted a multiple of the combined OpenAI + Anthropic valuations just based on the _threat_ of what they may be able to accomplish. They'll have the data + knowledge edge over open alternatives and be able to implement + deploy (see the story about Anthropic employees being at GS for 6 months already[0]) [0] https://www.cnbc.com/2026/02/06/anthropic-goldman-sachs-ai-model-accounting.html https://www.cnbc.com/2026/02/06/anthropic-goldman-sachs-ai-m...
- bix6 8mo ago
  What’s your max extent? I was just doing some napkin math to think about where they’ll cap out.
ibejoeb 8mo ago
>OSS will be sufficient for most businesses Only for well defined tasks. There's not really a practical upper bound. We will keep throwing more complex tasks at it to the extent that it can handle them. Like if you just need fancy OCR, then a specific model will probably suffice, but there will be an appetite for human- or superhuman-level intelligence that never gets tired and has no rights.
- benreesman 8mo ago
  K2.5 run on your own gear is an Orca tube away from 4.5, R4 will be stronger. The gap is growing and the second derivative is positive. They don't catch up until it saturates.
  - walterbell 7mo ago
    > run on your own gear Where does that fall within the range of Mac Studio, Nvidia 4090, H100?

How are they not overvalued? At some point OSS will be sufficient for most businesses, what then?

by xvector 8mo ago

How are they not overvalued? At some point OSS will be sufficient for most businesses, what then?

These companies are spending billions on custom datasets for a gazillion of valuable tasks and are clamping down on exfil for distillation. It's not guaranteed open source models will continue to keep pace.

CuriouslyC 8mo ago
And yet open models have been tailing closer lately?
marcyb5st 8mo ago
China might purchase the data and train their models just to make the AI bubble pop. A few billions to throw a wrench in your competing superpower economy might be totally worth it
- zozbot234 8mo ago
  If they did that it would be pursuing a commodify-the-complement strategy of some kind, not just "popping" a bubble. Same as nVidia publishing their own open models. If anything the value of everything AI would rise even further due to Jevons' Paradox.

mcmcmc 8mo ago

They’ll become commodity AI compute providers while training and selling premium foundation models.

vessenes 8mo ago

What do you value a company at that has gotten to $14b in revenue in 3 years and has 60%+ margin on inference? Just out of curiosity.

xvector 8mo ago
I am struggling with this because I have an Anthropic offer vs another equivalent offer that is all cash. But project out forwards. - What happens when Google builds a similar model? Or even Meta, as far behind as they are? They have more than Anthropic in cash flow to pour into these models. - What happens when OSS is "enough" for most cases? Why would anyone pay 60% margins on inference? What is Anthropic's moat? The UX is nice, but it can be copied. And other companies will have similarly intelligent models eventually. Margins will then be a race to the bottom, and the real winners will be GPU infra.
- jrjeksjd8d 8mo ago
  I've been in this situation before. Anthropic has a stupid business model but the market can stay irrational longer than you can stay solvent. If you get in there you will be aligned with people who structurally do not lose.
- underyx 8mo ago
  If you have an offer, you can and should ask this question of whomever you're coordinating with. They will give you an honest answer.
- fragmede 8mo ago
  Big picture, sure. We can talk about the millions that corporations will make and who's going to do what. But you're a person. $1 million in options is probably meaningful for you. Companies aren't IPOing, but the secret is that they're still paying employees cash for their options. SpaceX employees have had what's called a tender, which means they get to sell some of their hypothetical SpaceX options for cold hard cash in the bank that you can use to pay your mortgage. There's zero guarantee that Anthropic will do such a thing before the bubble bursts, but if they do, and you're there, who cares about a software company moat when you have enough money to buy a castle in Napa and pay to have a real actual moat with water in it and crocodiles, if that's what you want. Others are made of different stuff, and are going to go right back to work, even though they could go off to a beach for the rest of forever somewhere.

Yizahi 8mo ago

Then they will fall back on the selling their other real competitive products - hardware accelerators, phones and PCs, cloud storage and cloud compute, enterprise software, databases, operating systems, office and media suits... Oh wait...

nikcub 8mo ago

Funny I consider this valuation modest considering what the max extent of the investment thesis is here. SaaS and legal market caps have already contracted a multiple of the combined OpenAI + Anthropic valuations just based on the _threat_ of what they may be able to accomplish. They'll have the data + knowledge edge over open alternatives and be able to implement + deploy (see the story about Anthropic employees being at GS for 6 months already[0]) [0] https://www.cnbc.com/2026/02/06/anthropic-goldman-sachs-ai-model-accounting.html https://www.cnbc.com/2026/02/06/anthropic-goldman-sachs-ai-m...

bix6 8mo ago
What’s your max extent? I was just doing some napkin math to think about where they’ll cap out.

ibejoeb 8mo ago

>OSS will be sufficient for most businesses Only for well defined tasks. There's not really a practical upper bound. We will keep throwing more complex tasks at it to the extent that it can handle them. Like if you just need fancy OCR, then a specific model will probably suffice, but there will be an appetite for human- or superhuman-level intelligence that never gets tired and has no rights.

benreesman 8mo ago
K2.5 run on your own gear is an Orca tube away from 4.5, R4 will be stronger. The gap is growing and the second derivative is positive. They don't catch up until it saturates.
- walterbell 7mo ago
  > run on your own gear Where does that fall within the range of Mac Studio, Nvidia 4090, H100?