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How is Anthropic, OpenAI and xAi going to compete against the likes of Google that can spend $200 billion a year? It’s an impossible war and all these investors
by reenorap 8mo ago
How is Anthropic, OpenAI and xAi going to compete against the likes of Google that can spend $200 billion a year? It’s an impossible war and all these investors are throwing their money into a bottomless insatiable pit of money.
Until the funding stops for one reason or another and then everyone loses all their money at once like a star that collapses into a black hole singularity in a femtosecond.
- seanhunter 8mo agoStrange as it may seem, there was a time when people asked “how will google be able to compete against the likes of aol, who are able to spend $x per year”
- Ancalagon 8mo agohow does any startup beat an incumbent?
- Esophagus4 8mo agoI think GP is probably implying that this particular vertical requires obscene amounts of capital to keep up, which makes it really hard for a startup if you’re going up against businesses with giant free cash flow machines. It’s the same reason Reid Hoffman sold his AI startup early… he realized he just couldn’t beat Google/FB/MSFT long term if it devolved into a money race.
- tarsinge 8mo agoWhen the incumbent shoot themselves in the foot. Google and Microsoft are consultancy driven bureaucracies with abysmal product culture. At best Google will be the one providing the back end, but it’s very unlikely to me they’ll win the end user product space.
- timmmmmmay 8mo agoGoogle fucks up 90% of their products, why do you think Gemini is in the 10%?
- xmprt 8mo agoBecause Google has the money to build 10 different versions/iterations of Gemini and can essentially force one to work. They have most people's data and most people use them for mail/search/browser/maps as well. In my opinion though this is a race to the bottom rather than a winner takes all situation so I don't think anyone is coming out ahead once the dust settles.
- kingkawn 8mo agoThis was the same argument made for Google Wave and Google+ and both completely tanked
- thewebguyd 8mo agoThe tech behind wave eventually made its way into Google docs though and pioneered collaborative document editing, so wasn't a complete failure even though the product itself was killed. No comment on Google+, Google has a storied history of failure on any kind of social media/chat type products. Where Google wins is just simply having enough money to outlive anyone else. As the saying goes "the market can remain irrational longer than you can remain solvent" In this case, Google is the market and they can just keep throwing money at the wall until OpenAI, Anthropic, etc. go under.
- hackingonempty 8mo agoSocial media has strong network effects that keeps competitors at bay. What network effects are OpenAI/Anthropic/etc accumulating?
- johntiger1 8mo agoGoogle's only focus isn't on Gemini. Anthropic is do-or-die
- sobkas 8mo agoAlso Theranos was do-or-die and we know how it ended.
- infecto 8mo agoI fail to see what that has to do with this?
- sobkas 8mo agoJust because something is in do-or-die situation doesn't mean that they have some kind of magical advantage over fat cat. Being in that situation means there is very real possibility of doing "die" part and we have lots of examples of them doing so.
- bdangubic 8mo agoGiven the amount money that they are spending for vastly subpar products maybe they need to quadruple their capex
- Traster 8mo agoWell there's a good reason that OpenAI partnered up with Microsoft. The calculation is that the established big techs - Amazon, Apple, Microsoft, Google, Meta are all going to be significantly impacted by AI so it's not unreasonable to look at Anthropic at 10% of their market cap as a reasonable value. Would it be worth Apple to bring Anthropic in house? They failed to deliver AI themselves, they know the risks of being dependent on Google. If AI goes far enough it may totally remove Apple's differentiation. Some of the Big Techs are building their own in house stuff (Meta, Google), but it wouldn't be crazy to see acquisitions by the others, especially if the market cools slightly. And then there's the possibility that these companies mature their revenue streams enough to start actually really throwing off money and paying off the investment.
- xp84 8mo ago> they know the risks of being dependent on Google I wouldn't argue it's that risky. Look at their past entanglements: 1. Google Default Search Bribe - brings in $20B a year for literally doing nothing 2. Google Maps: Google let them build their own custom app using Google's backend, and it worked fine all the way up until Apple chose to exit that arrangement actually I can't think of any others, but is there an example of Apple getting burned by Google?
- bjghknggkk 8mo agoAndroid.
- bbor 8mo agoWell they have an illegal monopoly over display ads that they defended with a moat of money when FB tried to butt in, so that's an example of them being not great to rely on.
- SilverBirch 8mo agoYes, but look at the counter side of it, Apple were hitched to Intel's wagon for CPUs and their laptop line got slowly demolished until Apple had to take over the task themselves (admittedly with expertise they'd largely already developed with the iPhone, which similarly came in house from places like Imagination Tech). Tim Apple is famous for very few things but > We believe that we need to own and control the primary technologies behind the products we make If AI is as big as we think it will be, Apple thinks they need to own it.
- buccal 8mo agoI'm trying paid tier Gemini and it doesn't allow to keep have personal chat history when you disable training on your data, on reload of the page your chat is gone. Even free tier of ChatGPT allows disabling training on your data while allowing to keep such basic functionality. Some technical advancements are not worth it if you do not respect your users.
- nickysielicki 8mo agoHow does their top tier subscription compare in usage limits to the $200/mo Claude usage limits?
- mvdtnz 8mo agoClaude has easily the worst and most opaque usage limits in the industry.
- MagicMoonlight 8mo agoYeah I’m never using a Google product. The sole purpose of their company is to be evil. At least other companies are indifferent.
- Yizahi 8mo agoGoogle is evil in passive way, like sprawling bureaucracy making you life slowly worse and worse but also doing some stuff to at least some fraction of population. OpenAI and Sam are determined and energetic evil, laser focused on making whole human population jobless and homeless in shortest way possible and not producing anything else of value, no other products. I'd rather prefer the former evil out of the two.
- viking123 8mo agoI hate Google but I hate Anthropic way more.
- jiggawatts 8mo agoAnother basic feature that’s missing is sharing a Gemini chat as a link anyone can view. OpenAI figured this out: it’s awesome marketing when people send each other links to the app with a convenient text box to continue the conversation. It’s viral. Google meanwhile set this up so that “anyone with the link can view” is actually “anyone with the link and a Google account”. That’s grade A failure of marketing. The PM in charge of that decision ought to be walked off a plank.
- kiernanmcgowan 8mo agoSlight counter point - claude code is basically the only developer tool that ever been happy to pay money for. Getting the entire software industry to give you $200/mo/person is quite the market.
- renato_shira 8mo ago[flagged]
- chrisjj 8mo ago> Getting the entire software industry to give you $200/mo/person is quite the market. Quite the fantasy, you mean.
- vitaflo 8mo agoThat just means they're basically Adobe. What's their valuation?
- mrtksn 8mo agoTheoretically Apple can spend just as much. What are the outcomes though? All those giants have their own business that are established and profitable. It’s the new kids in the block that will make the difference. You know those lists on twitter about how many companies US has in top 10 and are presented as a win? Those are actually lists of capital concentrations blocking innovation. It looks like US is winning but for some reason life is better in EU and innovation is faster in China. It’s companies like OpenAI Anthropic that will move US ahead. Even if some core innovation or and capital comes from the establishment.
- SoftTalker 8mo ago> What are the outcomes though? NVIDIA, and contractors who build data centers, and manufacturers who supply them, will all get rich.
- logicchains 8mo ago[flagged]
- ivantop 8mo agoTo your last point, the answer is probably much different in China
- hiq 8mo ago> bigger cars I gotta say, I found this one especially funny as I currently don't have a car and that's actually my biggest luxury: being able to go around without one and no spending time in commute.
- stackghost 8mo ago>As measured by prosperity life in the US is better; the poorest US state has a higher GDP per capita than most western European countries. GDP per capita/prosperity is a poor proxy for quality of life. The US is lagging most of the developed world in most quality of life metrics, even as reported by US news outlets, which don't rank the US in even the top 20: https://www.usnews.com/news/best-countries/rankings/quality-of-life https://www.usnews.com/news/best-countries/rankings/quality-... >Americans have bigger houses, more food, bigger cars, The size of one's house or car is at best weakly-correlated with quality of life. I would rather not own a car at all and be able to walk everywhere, rather than spend hours of my life commuting in a gigantic SUV. >bigger salaries, and access to better medical care and schools if they've got an okay job. The US ranks the lowest in the developed world for life expectancy, and among the highest in obesity globally (obesity being a major determinant of health). The US remains the only developed country where an unlucky dice roll (e.g. genetic-linked cancer) will bankrupt you and destroy the livelihoods of your children. This is not the flex you think it is.
- throwaway911282 8mo agoGoogle has invested in Anthropic. I don't trust that Google will compete on fair grounds with Anthropic on coding. Their common enemy is OpenAI.
- bentt 8mo agoI’d guess they want to outlast OpenAI and then get bought by Apple or Amazon.
- causalmodels 8mo agoGoogle will buy Anthropic if it comes to it. Google already owns ~30% of anthropic and Anthropic is running on Google hardware.
- beambot 8mo agoThe same way that Google+ never overtook Facebook
- Waterluvian 8mo agoThe most efficient way Google could spend that money is probably to buy a company and not poke at it too much. I have no confidence that large rich companies can actually innovate beyond buying small innovators or spawning business units and not poking at them much.
- impulser_ 8mo agoBecause it's Google they can't build products and they only care about benchmarking. The product they released so far are all half assed experiments. Gemini 3 Pro is now being beaten by open source models because they can't fix or don't want to fix the problems with the Gemini models being completely useless. The same for Microsoft. Microsoft had GitHub Copilot, and Microsoft Copilot and both of them are useless to Claude Code and Claude Cowork. You can have all the money in the world, but nothing is stopping you from building useless garbage.
- rvnx 8mo agoClaude is clearly the most superior product right now. Gemini is absurdly expensive for low quality (3000 USD of tokens are not even worth what you get @ Anthropic for 200 USD).
- lostmsu 8mo agoThe same can be said about Claude (no or tiny Opus on Pro) vs GPT-5.2 high (5.3-codex if you like terminal bench hacking).
- rvnx 8mo agoYou mean GPT-5.3-Codex is a much better value than Claude Opus for programming ? If yes then I'm very interested as I am using Claude there
- lostmsu 8mo agoI guess it depends on your spending. GPT-5.2 and -5.3-Codex are certainly much cheaper: you get much more from the same $20 sub. When I was using Claude as primary I would daily hit limits and have to wait vs on GPT with more usage it only happened to me once in a few months when I was vibecoding non-stop for a week or two to port my personal Windows tools to Linux with multiple other projects being worked on in parallel. Anecdotally GPT was also smarter than Claude which prompted my move from Claude in the first place: Gemini and Claude back in October failed to get their own harness PID. Outside of anecdata I rely on https://artificialanalysis.ai/models/capabilities/coding https://artificialanalysis.ai/models/capabilities/coding for now.
- nightski 8mo agoHow long is Google going to be able to keep selling search engine ads?
- twobitshifter 8mo agoAs someone who thought Google+ doomed facebook, because of Gmail accounts and everyone with Google as their homepage already, I learned not to overestimate Google’s abilities.
- pragmatic 8mo agoHow in the world would you have thought that? Genuinely curious. It was obviously DOA and waaaayyy outside G'scompetence.
- MattGrommes 8mo agoEverything was obviously DOA after it dies. I also thought it wouldn't last but it wouldn't be the first or last tech company initiative that lived on long after people thought it would die. Weird things happen. "Obviously" isn't a good filter.
- akersten 8mo agoSo is Gemini tbh. It's the only agent I've used that gets itself stuck in ridiculous loops repeating "ok. I'm done. I'm ready to commit the changes. There are no bugs. I'm done." Google somehow manages to fumble the easiest layups. I think Anthropic et al have a real chance here.
- QuantumGood 8mo agoHard to bet against Hassabis + Google's resources. This is in their wheelhouse, and it's eating their search business and refactoring their cloud business. G+ seemed like a way to get more people to Google for login and tracking.
- unmole 8mo ago> it's eating their search business Fact not in evidence. Google's search and advertising revenue continues to grow.
- rizpanjwani 8mo agoGoogle is invested in Anthropic
- rhubarbtree 8mo agoCulture.
- pazimzadeh 8mo agojust want google to have good web apps again, it's so bad on desktop
- cantalopes 8mo agoHave you ever used anything that is on google cloud console? Or tried not to get randomly ratelimited with a single request to a vertex llm model? They are shooting themselves in the foot for solid 20 years, any of these players can compete with google in this frontier
- operatingthetan 8mo agoGoogle is playing the datacenter game differently because they have their own hardware.
- eleventen 8mo agoI had to install the separate gcloud and gsutil utilities and use one to synthesize a login session for the other this week. Took fully 10 minutes to install from homebrew. I do not believe in this company.
- alwillis 8mo ago> It’s an impossible war and all these investors are throwing their money into a bottomless insatiable pit of money. Anthropic went from zero to $14 billion in revenue in less than 3 years, growing at 10x per year. That's what they're investing in. Also Anthropic seems laser-focused, unlike some of their competitors who are throwing stuff against the wall to see what sticks.
- Insanity 8mo agoRevenue, but what about profit? Google can be cash positive but I’m not sure Anthropic can be the same.
- 2sdd 8mo agoAlso the switching cost. If its negligible theres no reason for Anthropic to be considered a going-concern in the long term. So its valuation makes no sense from a DCF basis unless you are expecting a liquidation in future. But even then, the liquidation value still doesn't justify its valuation today.
- alwillis 8mo agoWhat about it? It took Twitter 10 years before it was profitable [1]. I'd guess that Anthropic will be one of the companies left standing when it's all said and done, assuming nothing catastrophic happens. [1]: https://en.wikipedia.org/wiki/Twitter,_Inc.#Funding https://en.wikipedia.org/wiki/Twitter,_Inc.#Funding
- avisser 8mo agoI did the math. Twitter was down $1.3 billion over 10 years. Anthropic lost $5.2 billion last year. So they are 40x better at spending investor money than Twitter. Hard to call Twitter the archetype for Anthropic.
- deadeye 8mo agoGoogle also has the most to lose.
- protocolture 8mo agoI mean, you gotta spend the 200B on the right things.
- HardCodedBias 8mo agoLet's be real. Google leadership is pathetic. Sundar "the manager" has presided over an enormous growth of the businesses he was handed. He also presided over the complete collapse of the internal culture. OTOH he may have fired Dianne Green, so that's something. Overall, at best Meh. Demis ran a startup that burnt cash on vanity projects and continues to burn cash on vanity projects. Gemini is barely open source quality AI, but Google makes it nearly free and has the best distribution on the planet. Gemini has been a joke since 1.0. No release has hurt Google's brand more. 3.0 was STOA for about 2 days, easily Gemini's best release. Anthropic and OAI are moving at amazing pace, Google can not keep up at all.
- YZF 8mo agoThey're frenemies. The likes of Google also host Anthropic and OpenAI.
- bastawhiz 8mo agoUntil a version of Gemini is released that can fix one (1) bug in my codebase, I'm not worried for any of those companies.
- threethirtytwo 8mo agoThey have the best coding agent around. I would say roughly half the industry no longer writes code by hand and claude is/was the only agent that let me drop my editor all together. That enabler alone is enough signal beyond hype. Frankly google models and the UIs google designs around their models just aren't as powerful and more training, more data and more compute is no longer tipping the scale. Anthropic did something to make their model better at coding than almost anything else. And all of this is just what's happening right now. The money being invested is a gamble not on right now... but on the trendline to the future. I agree that the LLMs are overloaded with hype, but the people who compare it to crypto aren't thinking straight. Whether there's over investment or not a paradigm has shifted. Maybe there will be a collapse, but it won't collapse into a singularity. If it collapses at all, a new world will emerge, and that new world will generate more value than all the money currently invested in AI.
- SkyPuncher 8mo agoWe're starting to see the nuance come out in what these models are working towards. * OpenAI - chat that has some character to it. * Claude - working through thoughts and coding * Gemini - general reasoning (still blown away by gemini's reasoning, but cannot understand it's inability to tool call - maybe that's been fixed)
- nradov 8mo agoWork smarter, not harder: find an innovation that makes LLM computation an order of magnitude more efficient. Easier said than done, of course, but vastly more efficient biological systems provide an existence proof that this is possible in principle. DeepSeek already showed how it's possible to get good results with limited resources.
- King-Aaron 8mo agoThese companies are operating outside of "normal" economics. They seem to be fed money against all rational valuations because it is a Manhattan project - the US needs to 'beat' the Chinese with this and as such these companies will probably not be allowed to fold.
- ramshanker 8mo agoAt least xAI now has a revenue generation backer. SpaceX. Others must pull up their revenue number.
- el_nahual 8mo agoSpaceX makes 16B in revenue per year, with 7B in ebitda (which doesn't account for the cost of rockets)... so assume what, 3B in free cash flow per year? And that's being generous. That's about what Google creates in free cash every 2 weeks.
- randerson 8mo agoSpaceX can also raise their prices for government launches to pretty much anything and still get business, because they are essentially a monopoly.
- hamandcheese 8mo agoSo why haven't they already?
- randerson 8mo agoI can think of a many possible reasons offhand: 1. They've been in Growth mode, where it's common for companies to prioritize capturing the market over being profitable. 2. They've had no problems with money since proving their effectiveness. They can raise capital at favorable valuations (and hold secondary sales) whenever they want. It has been one of the hottest private stocks that people clamor to own. 3. As a private company whose dominant shareholder is the CEO, nobody can pressure them to raise prices. This typically changes after an IPO. 4. Previous government administrations would likely have resisted paying them much more than they charge the private sector or other governments. The new administration has proven they will do favors for companies that are friendly to them. 5. For awhile it seemed they might soon have viable competition for manned space flight (e.g. Starliner) but only in 2024 did we see how bad those are. 6. The low cost is a point of pride for Musk who liked to prove how much more efficiently he could do spaceflight than NASA.
- fooey 8mo agoit's a race of parallel discoveries sprinting towards commoditization and indistinguishably any real breakthrough will be instantaneously reverse engineered and replicated none of the not-googles can win, because there is no win state
- hulitu 8mo agoThey made a C compiler. Google has no C compiler. Win. /s
- dolphinscorpion 8mo agoMake the pie higher, a US President once said. I will leave it at that
- Aerroon 8mo agoI think Google's downfall in a product can easily come from UX. Take livestreaming: YouTube is better on a technical level: * Higher bitrate * Ability to rewind * Able to edit recordings (thumbnails, cutting out dead air etc) * Much larger userbase But you know what they fail at? The actual livestream watching UI with chat. There's wasted space, it doesn't darken the rest of it, getting chat on screen with as big of a video window as possible is annoying, the emotes pretty much all suck. And because of that watching on Twitch is a better experience. Google sometimes fails at the small things. And those small things might be enough for a competitor to build a viable competing product. You might think that they could easily solve all these problems. Maybe they could, but google.com still isn't equivalent in its mobile and desktop offering in 2026. Eg on desktop page I can select an arbitrary date range to filter results, on mobile I can only select from a preset drop-down at most until 1 year ago. Could Google fix this? Sure, but I've been waiting for a fix for this for a decade. This isn't something that gave a competitor an edge, but Google being bigger doesn't necessarily mean they get good at the small things.
- 2sdd 8mo agoYou can see their lack of design nouse in their marketing material. Compare it with Apple. There is no comparison, its actually laughable and embarrassing how bad they are at it given the resources the firm has its disposal.
- Sparyjerry 8mo agoGoogle has been working on these exact same type of models far longer than all of the new entrants but was unable to make them good enough or useful enough. Money spent does not equate to value created or we would have one big company that runs everything.
- deleted 8mo ago[deleted]
- strawhatguy 8mo agoAll I know is that claude code is pretty dang good, grok's nice for searching info, and Google's Gemini hasn't really been in my workflow at all. Neither chatgpt, beyond when it first came out. Maybe I'm odd, but a Google search is even rare (usually use duck duck go) so I don't know, Google may have problems on it's hands. Possible anyway.
- viking123 8mo agoGrok is nice because it is not censored like all the other cuck models.
- strawhatguy 8mo agoYep, I can't trust software that has shone clear instructions to produce incorrect results, like Gemini did with it's image generation famously. If nothing else, it means Gemini's team has priorities other than the results. Necessarily that means they will lag behind others who have clearer focus Then the only way for Google to get ahead is to help promote regulation of AI to do what they're already doing. I know it's coming cuz regulators can't help themselves, but No thanks.
- SergeAx 8mo agoGoogle is notorious for creating bad products, and right now, Gravity is the worst ML-assisted code editor on the market, IMO. Also, I personally experienced a mishap when Google ML-chat was unable to sync chats between the web and mobile clients. To my embarrassment, it turned out that I was using Gemini on the mobile and AI Studio on the web. How Google managed to create two similar products - I don't know, but it was obviously a tremendous misallocation of resources.
- raincole 8mo ago> How is Anthropic, OpenAI and xAi You mean Amazon, Microsoft and Tesla?
- bmitc 8mo agoAnthropic's product, in my experience, is leaps and bounds over the competition. I don't know how profitable any of these companies can be, but if Anthropic fails as a company, they will be purchased for sure. I'm not saying that's good, but I can't see someone just leaving something like Claude to die away.
- lumost 8mo agoAnthropic's primary Capex partner is AMZN. AMZN is presently willing to drop 200 billion a year into Capex for compute to rent to anthropic and others. This 30 billion only needs to fund their rental rates - unlike openai and google who need to put in the upfront capex for their compute as MSFT stopped footing the bills. An interesting question is whether anthropic's capex needs may grow to the point that they can take down AMZN with them should they fail.
- ulfw 8mo agoInvestors still pretend AI is a winner-takes all. The one magic model that will rule all the others forever and ever and gain all the marketshare. In reality LLMs have proven to be a commodity. Today OpenAI is ahead, tomorrow Anthropic, the next day Gemini and vice versa. Many others, if Qwen or Deepseek are at it's toes and for the majority of people if used unbranded wouldn't even be discernable in difference. Price will dictate who wins. And that is a commodity product.