7 ms·

This is important context in the wake of yesterday’s “raise” announcement. A lot of this stuff seems to just quietly never happen once the ink on the PR puff dr

by cmiles8 7mo ago

This is important context in the wake of yesterday’s “raise” announcement. A lot of this stuff seems to just quietly never happen once the ink on the PR puff dries. The AI industry increasingly looks in scramble mode to keep the hype going as those storm clouds of financial and business reality get darker and darker on the horizon.

dgellow 7mo ago
Anthropic does look healthier, with their enterprise focus. Or am I missing something?
- cmiles8 7mo ago
  They nominally come across as a more stable ship with less clouds over its leadership. However all of the major privately held AI players are struggling to paint a business and financial picture that doesn’t look “terrible” at best and “verge of market moving implosion” at worst. For now the only thing keeping this all alive is more and more irrational cash being thrown on the pile in the faint hope that something stops the implosion from happening.
- adventured 7mo ago
  The LLM usage will generate hundreds of billions of dollars in ad revenue, which will be wildly lucrative in terms of margins (not as good as Google search used to be). If GPT is a leader in that, they'll take a sizable share of that pot. There's a lot more money in being Google -> consumer ads, or Amazon -> consumer ads, or Meta -> consumer ads, than there is in being Anthropic -> enterprise. Just take a look at the enterprise. Amazon's ad business alone is already a better business than Oracle or SAP or Salesforce, with superior margins, and it's growing faster too. And of course everybody knows the Google & Meta ad monsters. The only question remaining is who is going to extract all those LLM ad dollars, how will that break out. Right now it's Gemini and GPT in the obvious lead, with Anthropic in third, and Meta & Grok nowhere to be found (permanent situation for those).
  - cmiles8 7mo ago
    “The LLM usage will generate hundreds of billions of dollars in ad revenue” And yet every attempt to extract even minimal ad revenue has been canned to date as something nobody wants with AI providers retreating in failure. I don’t doubt that there’s “some” ad revenue to be had but there’s little evidence that ads are going to save the day here.
    - bdangubic 7mo ago
      These exact words were said tens of thousands of times about Facebook (am old enough to remember those discussions :) ), “no way they can monetize on mobile” (this was the most fun). rules are simple, if you have Xbn or XXXm users on your system, you will make big bank in ads eventually
      - iAMkenough 7mo ago
        At that time, Facebook provided a free service without any real competitors. The masses will switch to Meta AI or Gemini or Claude at the drop of an ad that annoys them enough.
        adventured 7mo ago
        Gemini, GPT and Claude will all have ads on the consumer side. They will go together in quasi lock-step into the ad future, because that money is gigantic and they're going to need it. The masses will have no say in the matter. Just as they had no say in the matter with Google's ads getting ever more intrusive, or cable prices previously, or streaming prices going perpetually higher in the present, or YouTube ads, or anything else. Consumers will have no say in the matter, they'll take it and that's that. With only three relevant competitors (maybe Mistral in Europe), there will be nowhere to flee the deployment of ads.
        bdangubic 7mo ago
        amazing this is even a debate, we have now decades of this across everything that reaches enough users, it is a certainty as much that the Sun will rise tomorrow morning. as probably many people here on HN I am designated computer-fixer for all my family so any family gathering I have to look at someone's computer about something. years ago I started checking whether browser(s) anything ad-blocking in place and I am 0 for million by now. while HN crowd might be theoretically pushing back on ads (even with like "I won't use this if there are ads" nonsense) general public is so used to ads that I sometimes feel it is welcomed change when some new service etc gets ads. I remember the first time I saw an ad on Amazon Prime Video and my daughter and I were like "no f'ing way!!!" and my wife was like "oh, ____ is on sale this weekend, cool!" :)
- zer00eyz 7mo ago
  Outwardly it looks much better. But between their token curtailment and time of day restrictions, and some of the clues in the code leak (regex for sentiment, telling the public client to be "brief") it seems like they are facing some capacity issues. Im guessing that the accountants at all the AI incumbents drink heavily.
- mpalmer 7mo ago
  Anthropic can't prop up Nvidia and the chip industry itself. If AI as an industry can't start turning a dollar into $1.05, a lot of stuff starts falling in value
  - zozbot234 7mo ago
    Nvidia will be fine, same for the chip makers. They're selling shovels during the gold rush and they stand to gain even if local/on prem AI eventually dominates for casual users.
- paxys 7mo ago
  If/when the bubble bursts Anthropic is going down as well. There's nothing unique that sets it apart from OpenAI. Their cash burn is similarly egregious.
- therobots927 7mo ago
  Relative to OAI they are healthier. That isn’t saying much.
- Razengan 7mo ago
  Holy f'n Hell, there's such a blatant bias on HackerNews in favor of Anthropic and against OpenAI. I'm just a user, and in my experience Claude has been consistently crap compared to ChatGPT/Codex. I use both side-by-side, and have paid for a ChatGPT subscription every month for around 1 year, but only 2 months for Claude; once last year, and again since last month. Everything from the sign up, the sign in, the payment, the UI, the UX, gosh, just sucks on Claude. And the AI itself: SO. MUCH. "OoPs you're right! I was mistaken" BACKTRACKING! It's downright DANGEROUS to listen to it! God I can post screenshots of working on the same project and the same prompts with both agents and prove how worse Claude is. Of course this comment will be downvoted by Anthropic's paid PR machine, because there's no way actual users who have tried both products would be so in favor of Claude.
  - p1esk 7mo ago
    I’ve been a paid subscriber for all three players since day 1. CC (Opus) has been a clear winner for agentic coding starting about 6 months ago. GPT5.4 reduced the gap somewhat but the gap is still there.
  - jmye 7mo ago
    > Of course this comment will be downvoted by Anthropic's paid PR machine, because there's no way actual users who have tried both products would be so in favor of Claude. Sure, it couldn't possibly be that others have had a different experience. It couldn't even be that some people think OpenAI is nearly as gross as Palantir. It's that they're shills. High-end analysis.
  - greenchair 7mo ago
    Yes I dont get it either. probably bots, paid posts.
- darth_avocado 7mo ago
  > healthier Correct. As compared to other AI companies. Tangible product, specific market segment and stable user base. But whether it is worth a trillion dollars (like some of the peers are pretending to be) is yet to be seen. A lot of companies are using Anthropic products, but whether the spend is worth it, is also yet to be seen. A more realistic end state for Anthropic would be that they’d enterprise customers, with limited but steady spend due to Anthropic finally having to stop subsidizing tokens and a valuation in around $200-350B.
  - bandrami 7mo ago
    Yeah TCO on AI is the big hazy uncertainty that a lot of large firms are still waiting on firmer numbers on before they really adopt. And in the nature of things we can't get TCO numbers for another year or so.
nacozarina 7mo ago
sell the roadmap, deliver a sku, sell/comp consulting services on escalations the silicon valley shuffle, tried & true
cj 7mo ago
For a company bringing a new technology from zero to mainstream, I think it's pretty normal that there will be a lot of failed attempts at productization. The thing that isn't normal is the degree of experimentation relative to company valuation. Normally once a company reaches $700 B+ valuation, they've figured out their product and monetization strategy. ChatGPT is clearly still iterating heavily on that - not normal for a company that size.
- mandevil 7mo ago
  And not normal for a company that has been at it this long. The Apple II went on sale on June 10th, 1977. Visicalc went on sale October 17th, 1979- 860 days separate the two. ChatGPT was opened to the public on November 30th, 2022, which was 1219 days ago- almost 50% more time has elapsed than between the Apple II and Visicalc.
  - deleted 7mo ago
    [deleted]
  - ianbutler 7mo ago
    Without me trying to be snarky why do you feel spreadsheet software launching is comparable to this scenario?
    - Marazan 7mo ago
      VisiCalc was the killer app.
      - ianbutler 7mo ago
        Ah got it. I wasn’t drawing that connection. Thanks
      - zozbot234 7mo ago
        VisiCalc was "the" killer app for early micros, but being able to edit a written text on screen and then print it out with letter-like quality was nothing to sneeze at, either. This was plausibly a key gain in efficiency for the service sector, perhaps comparable to the 10%~25% that's now being talked about re: LLM's (which is huge on a secular basis).
sharadov 7mo ago
The circular deals are getting old - it's like rearranging the chairs on the Titanic's deck.
therobots927 7mo ago
All the “raises” consist of “committed capital” and all of the revenue is annualized. Welcome to dot com 2.0
xnx 7mo ago
OpenAI != The AI industry OpenAI has stagnated technologically, and is a financial zombie, but that's not true for every part of the industry. Once these early movers flame out, there will be more stability with Google, Microsoft, and AWS.

by cmiles8 7mo ago

dgellow 7mo ago

Anthropic does look healthier, with their enterprise focus. Or am I missing something?

cmiles8 7mo ago
They nominally come across as a more stable ship with less clouds over its leadership. However all of the major privately held AI players are struggling to paint a business and financial picture that doesn’t look “terrible” at best and “verge of market moving implosion” at worst. For now the only thing keeping this all alive is more and more irrational cash being thrown on the pile in the faint hope that something stops the implosion from happening.
adventured 7mo ago
The LLM usage will generate hundreds of billions of dollars in ad revenue, which will be wildly lucrative in terms of margins (not as good as Google search used to be). If GPT is a leader in that, they'll take a sizable share of that pot. There's a lot more money in being Google -> consumer ads, or Amazon -> consumer ads, or Meta -> consumer ads, than there is in being Anthropic -> enterprise. Just take a look at the enterprise. Amazon's ad business alone is already a better business than Oracle or SAP or Salesforce, with superior margins, and it's growing faster too. And of course everybody knows the Google & Meta ad monsters. The only question remaining is who is going to extract all those LLM ad dollars, how will that break out. Right now it's Gemini and GPT in the obvious lead, with Anthropic in third, and Meta & Grok nowhere to be found (permanent situation for those).
- cmiles8 7mo ago
  “The LLM usage will generate hundreds of billions of dollars in ad revenue” And yet every attempt to extract even minimal ad revenue has been canned to date as something nobody wants with AI providers retreating in failure. I don’t doubt that there’s “some” ad revenue to be had but there’s little evidence that ads are going to save the day here.
  - bdangubic 7mo ago
    These exact words were said tens of thousands of times about Facebook (am old enough to remember those discussions :) ), “no way they can monetize on mobile” (this was the most fun). rules are simple, if you have Xbn or XXXm users on your system, you will make big bank in ads eventually
    - iAMkenough 7mo ago
      At that time, Facebook provided a free service without any real competitors. The masses will switch to Meta AI or Gemini or Claude at the drop of an ad that annoys them enough.
      - adventured 7mo ago
        Gemini, GPT and Claude will all have ads on the consumer side. They will go together in quasi lock-step into the ad future, because that money is gigantic and they're going to need it. The masses will have no say in the matter. Just as they had no say in the matter with Google's ads getting ever more intrusive, or cable prices previously, or streaming prices going perpetually higher in the present, or YouTube ads, or anything else. Consumers will have no say in the matter, they'll take it and that's that. With only three relevant competitors (maybe Mistral in Europe), there will be nowhere to flee the deployment of ads.
        bdangubic 7mo ago
        amazing this is even a debate, we have now decades of this across everything that reaches enough users, it is a certainty as much that the Sun will rise tomorrow morning. as probably many people here on HN I am designated computer-fixer for all my family so any family gathering I have to look at someone's computer about something. years ago I started checking whether browser(s) anything ad-blocking in place and I am 0 for million by now. while HN crowd might be theoretically pushing back on ads (even with like "I won't use this if there are ads" nonsense) general public is so used to ads that I sometimes feel it is welcomed change when some new service etc gets ads. I remember the first time I saw an ad on Amazon Prime Video and my daughter and I were like "no f'ing way!!!" and my wife was like "oh, ____ is on sale this weekend, cool!" :)
zer00eyz 7mo ago
Outwardly it looks much better. But between their token curtailment and time of day restrictions, and some of the clues in the code leak (regex for sentiment, telling the public client to be "brief") it seems like they are facing some capacity issues. Im guessing that the accountants at all the AI incumbents drink heavily.
mpalmer 7mo ago
Anthropic can't prop up Nvidia and the chip industry itself. If AI as an industry can't start turning a dollar into $1.05, a lot of stuff starts falling in value
- zozbot234 7mo ago
  Nvidia will be fine, same for the chip makers. They're selling shovels during the gold rush and they stand to gain even if local/on prem AI eventually dominates for casual users.
paxys 7mo ago
If/when the bubble bursts Anthropic is going down as well. There's nothing unique that sets it apart from OpenAI. Their cash burn is similarly egregious.
therobots927 7mo ago
Relative to OAI they are healthier. That isn’t saying much.
Razengan 7mo ago
Holy f'n Hell, there's such a blatant bias on HackerNews in favor of Anthropic and against OpenAI. I'm just a user, and in my experience Claude has been consistently crap compared to ChatGPT/Codex. I use both side-by-side, and have paid for a ChatGPT subscription every month for around 1 year, but only 2 months for Claude; once last year, and again since last month. Everything from the sign up, the sign in, the payment, the UI, the UX, gosh, just sucks on Claude. And the AI itself: SO. MUCH. "OoPs you're right! I was mistaken" BACKTRACKING! It's downright DANGEROUS to listen to it! God I can post screenshots of working on the same project and the same prompts with both agents and prove how worse Claude is. Of course this comment will be downvoted by Anthropic's paid PR machine, because there's no way actual users who have tried both products would be so in favor of Claude.
- p1esk 7mo ago
  I’ve been a paid subscriber for all three players since day 1. CC (Opus) has been a clear winner for agentic coding starting about 6 months ago. GPT5.4 reduced the gap somewhat but the gap is still there.
- jmye 7mo ago
  > Of course this comment will be downvoted by Anthropic's paid PR machine, because there's no way actual users who have tried both products would be so in favor of Claude. Sure, it couldn't possibly be that others have had a different experience. It couldn't even be that some people think OpenAI is nearly as gross as Palantir. It's that they're shills. High-end analysis.
- greenchair 7mo ago
  Yes I dont get it either. probably bots, paid posts.
darth_avocado 7mo ago
> healthier Correct. As compared to other AI companies. Tangible product, specific market segment and stable user base. But whether it is worth a trillion dollars (like some of the peers are pretending to be) is yet to be seen. A lot of companies are using Anthropic products, but whether the spend is worth it, is also yet to be seen. A more realistic end state for Anthropic would be that they’d enterprise customers, with limited but steady spend due to Anthropic finally having to stop subsidizing tokens and a valuation in around $200-350B.
- bandrami 7mo ago
  Yeah TCO on AI is the big hazy uncertainty that a lot of large firms are still waiting on firmer numbers on before they really adopt. And in the nature of things we can't get TCO numbers for another year or so.

nacozarina 7mo ago

sell the roadmap, deliver a sku, sell/comp consulting services on escalations the silicon valley shuffle, tried & true

cj 7mo ago

For a company bringing a new technology from zero to mainstream, I think it's pretty normal that there will be a lot of failed attempts at productization. The thing that isn't normal is the degree of experimentation relative to company valuation. Normally once a company reaches $700 B+ valuation, they've figured out their product and monetization strategy. ChatGPT is clearly still iterating heavily on that - not normal for a company that size.

mandevil 7mo ago
And not normal for a company that has been at it this long. The Apple II went on sale on June 10th, 1977. Visicalc went on sale October 17th, 1979- 860 days separate the two. ChatGPT was opened to the public on November 30th, 2022, which was 1219 days ago- almost 50% more time has elapsed than between the Apple II and Visicalc.
- deleted 7mo ago
  [deleted]
- ianbutler 7mo ago
  Without me trying to be snarky why do you feel spreadsheet software launching is comparable to this scenario?
  - Marazan 7mo ago
    VisiCalc was the killer app.
    - ianbutler 7mo ago
      Ah got it. I wasn’t drawing that connection. Thanks
    - zozbot234 7mo ago
      VisiCalc was "the" killer app for early micros, but being able to edit a written text on screen and then print it out with letter-like quality was nothing to sneeze at, either. This was plausibly a key gain in efficiency for the service sector, perhaps comparable to the 10%~25% that's now being talked about re: LLM's (which is huge on a secular basis).

sharadov 7mo ago

The circular deals are getting old - it's like rearranging the chairs on the Titanic's deck.

therobots927 7mo ago

All the “raises” consist of “committed capital” and all of the revenue is annualized. Welcome to dot com 2.0

xnx 7mo ago

OpenAI != The AI industry OpenAI has stagnated technologically, and is a financial zombie, but that's not true for every part of the industry. Once these early movers flame out, there will be more stability with Google, Microsoft, and AWS.