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Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in tim

Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there is a lack of compute bottlenecking everything. Even now I’m looking at the 7.5x rate of tokens for Opus 4.7 Open models are promising and cost a fraction of what they proprietary models cost which the big two are vulnerable to when companies start to feel the cost of tokens. Will data centres be built fast enough and powered sufficiently to lower the cost of compute thus tokens? Is it just a giant Hail Mary to get to AGI ASAP before the economy collapses? Above all else, I simply feel the models have plateaued. I am noticing productivity loss for tasks I deem as “complex”

rvz 6mo ago
> Open models are promising and cost a fraction of what they proprietary models cost which the big two are vulnerable to when companies start to feel the cost of tokens. Anthropic are scared of open weight models and need to fear-monger towards you to continue paying for their models. That's the whole point of their 'safety' marketing narrative, account bans, and Dario being the AI scarecrow scaremongering everyone about nonsense like 'Mythos' towards the world. 'Mythos' is already here in the form of open-weight models that also found the same vulnerabilities as Anthropic did.
- danieldoesbio 6mo ago
  Genuine question here about the open-weight models finding the same vulnerabilities as mythos thing: is it just a matter of false negatives/positives? I’ve seen a few cases where people show other models (even opus) can find the same vulnerabilities given many passes. Is there some disadvantage to the extra passes that give the claimed Mythos performance extra value (assuming it finds them in less)?
  - intothemild 6mo ago
    The thing is, mythos found those with multiple passes, thousands of passes... So using thousands of passes or perhaps the same budgets, yes, cheaper open weight models could potentially (and have) found the same/similar vulnerabilities. Mythos screams of marketing hype, and nothing more. Opus 4.7 isn't really a meaningful upgrade in any sense, other than being more expensive. Once you can see what something like Qwen3.6-35B-A3B can do... with just a FRACTION of the size of the larger models, You'll understand that the future is open weight models you can run yourself. Same goes for companies, bringing inference onsite isn't hard, I'm actively building tooling to orchestrate it.
    - danieldoesbio 6mo ago
      What is the failure state for a pass that doesn't find a real vulnerability? Do the models report no issues or hallucinate issues that aren't real? I'm trying to run open weight local models and finding them really impressive... Just also trying to understand the cybersecurity side of all this.
  - tacet 6mo ago
    You have to keep in mind that it's not like anthropic just asked mythos to "find fancy bug, make no mistakes" and got the result. my quick read of the process they describe is that first they asked agents to rank files in order of potential to have interesting bugs, then they launch agents for each file in order of "interesting bug potential" and finally launch another agent for verification. (maybe i am mistaken, this is my read of this post https://red.anthropic.com/2026/mythos-preview/ https://red.anthropic.com/2026/mythos-preview/ ) it's not clear to me if they made just one pass over each file or made several passes for same file, but regardless, I think if you recreate roughly same process and burn 20000$ on tokens with other reasonably good model, you will find some fancy bugs too.
twoodfin 6mo ago
From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.
- an0malous 6mo ago
  > From the limited perspective of software development, today’s models are well-worth their per-token cost. At the current price or real price? Anthropic said a $200 subscription can cost them $5000 so the real price could be anywhere from 10-30x the current price.
  - RealityVoid 6mo ago
    No, that is probably one of the worst cases they probably saw. Most likely the subscription inference cost is much lower than you expect. If you look at costs for similar open models they are much lower than what you get by buying from anthropic, so that is the real cost basis I expect. It's likely Amazon is making a fucking killing though.
    - SlinkyOnStairs 6mo ago
      While $5000 is a lot, the people who rack up close or just over a thousand "API equivalent cost" are pretty common. > Most likely the subscription inference cost is much lower than you expect. This is probably not true because they'd be screaming it off every rooftop were that the case. Same deal with the API inference. Even the "profitable on inference" claim is sourced back to hearsay of informal statements made by OpenAI/Anthropic staff. No formal announcements, nothing remotely of the "You can trust what I'm saying, because if I'm lying the SEC will have my head" sort. Yet making such statements would be invaluable. If Anthropic can demonstrate profitability before OpenAI, they could poach most of the funding. There's no reason to keep it a company secret. And API inference is only part of the total costs, not even bringing in training and ongoing fine-tuning. If they're not even profitable on inference, how could they hope to be profitable overall.
IshKebab 6mo ago
Doubtful. Look at how long Uber and Tesla have lasted despite making huge losses. Hell even Magic Leap somehow still exists (I guess because they don't have running costs beyond salaries). I think this can keep going for at least another 5 years.
- Argonaut998 6mo ago
  Uber had only 25B invested in them before their IPO. OpenAI has 120B invested in them currently which excludes these kinds of deals (as far as I’m aware)!
- hliyan 6mo ago
  > Look at how long Uber and Tesla have lasted In a system of open-ended growth, yes, you can point to how long the system has persisted as evidence of its longevity. But in a system of plateauing growth, the system's age is an indicator of how close it may be to death. I suspect that the model that permitted the "success" of Uber and Tesla is nearing the end of its lifetime.
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infecto 6mo ago
I am not sure how grounded this is in reality. Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Has there been a ton of hype? Absolutely but the value proposition is getting more and more tangible. Did some of the AI companies over commit in spending? I am sure and they will probably hurt in the long term. I thought Anthropic had been scaling towards profitability at a quick timeline though.
- SlinkyOnStairs 6mo ago
  > Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Most of this is still structured around "find use cases for AI" rather than one (or more) clear use cases being the reason for adopting AI. There's no "Lotus 1-2-3" of AI. Even the software development applications are still somewhat controversial and highly pushed based on "Sam Altman promised me 10x developers".
  - infecto 6mo ago
    With the recent pushes into tools like Cowork/Claude Code for business users that’s not the reality I am seeing. We still have a long way to go to figure out the full value potential but it’s already at a point where there is a lot of low hanging fruit being able to be captured. Of course an anecdote of what I am seeing with my own company and companies I can peek into. YMMV but it’s a pretty clear path that these are going to be increasingly adopted.
paulddraper 6mo ago
Anthropic revenue is ~$30B/year.
- lelanthran 6mo ago
  Revenue is a meaningless measure though; what's the spend:income ratio? Excluding capital investments, what's the cost of operations? At a very minimum, to repay the +$100b in investment within a reasonable timeframe, what's the minimum figure they have to bank post-tax each month?
  - signatoremo 6mo ago
    Since when revenue is meaningless? It’s an indication of market acceptance. Anthropic has one of the most expensive plan, they didn’t undersell other models. Open weight models would otherwise dominate if cost is the only factor. Also, investment is not money in the bank. They can’t withdraw $100b tomorrow. That means they don’t have to repay until after they got the investment, which is a commitment over several years.
    - svnt 6mo ago
      It is meaningless when what you sell costs more than what your customer pays for it. I could sell $100B of GPUs at 90% of their cost tomorrow and I have market acceptance.
    - stackskipton 6mo ago
      Because at some point, you have to turn a profit. That's why people are wondering the margins, if their revenue is 30B but expenses are 60B with current investment repayment factor in, that means massive revenue increases or massive lowering of expenses are required to make the business profitable. What's the business impact if they do?
    - lelanthran 6mo ago
      > Since when revenue is meaningless? When you're selling $10 Bill's for $1, then revenue is meaningless.
aa_is_op 6mo ago
>Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. It's only a matter of time until they crash the market. Nobody is making any money, even if the White House is dumping billions in their tools.
giancarlostoro 6mo ago
> Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. I think a LOT of companies really never needed to be on the public market, and its a darn shame that so many go on the stock market, we have this obnoxious culture where you have to fire tons of people if you have a bad quarter just to show you're stopping the bleeding. Companies literally fire and hire x number of people every quarter to keep things going, its ridiculous and unhealthy. Private companies rarely work like this, I'm sure there's exceptions. Every company I've worked at started off private, and those were their golden years, until some economic hurdle happened so they sold it off to a bigger fish who is on the stock market, who bought them to be more attractive to investors or what have you. I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years. I think this would make more sense. Maybe it doesn't fix the VC peeps want their money back nonsense, but if you could do it even for early stage companies, maybe it could help somewhat.
- gowld 6mo ago
  > we have this obnoxious culture where you choose to fire tons of people if you have a bad quarter just to show you're stopping the bleeding Fixed your error.
  - giancarlostoro 6mo ago
    They choose to do so because they've lost money in a bad quarter, which might not be the case on the next quarter, its ridiculous. I would rather invest in a market where my investment is long term based, and you aren't just firing people to make numbers work. To these people its all about make the numbers work for investors, they don't care about anything else because of the way that market works. You can offramp your investment on a whim, which is ridiculous and volatile at times. Personally I would prefer more companies go private. Some companies probably wouldn't exist without the public market, like some social media companies, and maybe that's okay if they did not... Let companies fail, but also lets make investing smarter.
- kgwgk 6mo ago
  > I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years. That exists already! People often complain as well when a company ends its golden years because of some economic hurdle and ends up being acquired by a bigger fish who is _not_ on the stock market.
YetAnotherNick 6mo ago
> We are only just now getting a taste of the “true cost” of these tokens Why do you believe that? Better metric would be price per token of open models served by third party. Last I was tracking the price for similar level model was decreasing by more than 10x year on year, and they are 10-100x cheaper than top properietery models. Sure you can say that you can't compare them but for sure you can compare the top properietery model of 6 months back to current open models and the gap in time seems to be constant.
PunchyHamster 6mo ago
> Will data centres be built fast enough and powered sufficiently to lower the cost of compute thus tokens? ...building datacenters will not lower the cost. The cost (real, not investment hype subsidized one) will only drop with: * more efficient models * GPU/RAM market going back to reasonable pricing. The AI bubble pumped the second into unstustainable pricing and progress on first is going.. slowly.
xboxnolifes 6mo ago
If there is bubble to be popped, I'm guessing there's still a few years before it happens. Just based on the timeline of events, maybe end of 2028. Even if the big players find profitability, all of the other companies latching onto the AI-first identity will probably pop by then.
- jurgenburgen 6mo ago
  Private credit funds are already gating redemptions. Now with the energy crisis stemming from the war raising interest rates it’s not unimaginable that this pops the bubble.
mlinsey 6mo ago
You're observing that: a) effective price-per-token is rising b) there is insufficient compute to meet the demand. And your conclusion is that the industry is circling the drain and due to collapse?
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- svnt 6mo ago
  They are different observations, I think, though the phrasing confuses it: a) cost per successful task is rising — eg claude max allocation is functionally shrinking b) is there enough potential cost reduction in the queue to make up the gap c) if open models converge on a more efficient but slightly-less capable point (which has effectively happened) what is the actual moat?
  - mlinsey 6mo ago
    Yes, cost per successful task is rising - ie, we are all paying effectively more for AI. And yet - Anthropic is still struggling to have enough capacity to serve demand - they are virtually sold out. And yes, are almost-as-good open models, on part with the closed models from 6 months ago (at worst), that are just a single Openrouter API call away, and yet Anthropic is still selling out. So people are paying for the premium product anyway, for whatever reason - maybe the last bit of intelligence is worth it, maybe they like the harnesses/products around the models, maybe it's a brand/enterprise sales thing. Put aside your feelings about the AI industry and imagine we are talking about thingamajigs. Prices for thingamajigs are going up. They are still selling out about as fast (or faster) than the company selling them can build factories. There are more cost-effective competitors already in the market, but thingamajigs are selling out anyway. Would you, looking at the thingamajig industry, conclude the "jig is almost up"? That "the returns aren’t anywhere close to what investors expect" and that the impending IPO is all some desperate hail mary to save things before the collapse?
    - svnt 6mo ago
      I don’t have feelings about the AI industry to put aside. I would not have sufficient information to assess whether thingamajigs are legitimately valuable or whether they are tulips. The only indicator I see is the last point about people using it in the short term despite having access to cost effective alternatives, which actually points to irrationality/FOMO more than legitimate value. What we are looking at looks to me like it is rapidly becoming a a commodity: it will become as existential as electricity and water to businesses, and it will be sold and marketed and regulated, more or less like a utility.
czhu12 6mo ago
I don’t necessarily disagree but to provide some counter points: 1. Model providers are currently profitable when just counting the cost to serve tokens for inference[1]. They lose money training the next generation of models. 2. Open models don’t work nearly as well. Given that tokens are still relatively cheap, and hallucinations are expensive, I’ve not seen a huge up tick in open model usage for coding agents yet. 3. On the AI economy front, I really have no idea, but AI companies (meta, msft) have already come down in value. It seems investors are at least a little wary of AI over valuation. Of course, the stock market is not the economy, but it’s not clear where warning signs would be. Earnings are healthy. 1: https://martinalderson.com/posts/no-it-doesnt-cost-anthropic-5k-per-claude-code-user/ https://martinalderson.com/posts/no-it-doesnt-cost-anthropic... 2: https://www.economist.com/finance-and-economics/2026/04/20/american-corporate-profits-keep-shrugging-off-global-tumult https://www.economist.com/finance-and-economics/2026/04/20/a...
- bobro 6mo ago
  Your point 1 and point 2 live in direct tension. The reason the closed models are better is very likely that they are paying so much to train them.
- sassymuffinz 6mo ago
  If I start a business making a really special beef sandwich where I have to buy a farm every year for $1mil dollars, and then sell the sandwiches for $5, I can't get away with saying that my sandwiches turn a profit if the raw margin on the bread, the lettuce and the technical value of the weight of the beef is $3. Sure my gross margin might be $2 on each sammie sold but I need to sell 500,000 sandwiches just to break even to be a viable business. The fact is these AI companies are playing the game where they talk about revenue and gross profit per token and just try to wave their hands in the face of anyone looking behind them at the crater they're throwing investor money into. It's nothing but a gamble for AGI but the grand irony is that if that genie escapes out of the bottle the whole world economy is toast and money becomes meaningless anyway. I just can't comprehend the logic of why anyone is investing in this apart from short term gains.
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tptacek 6mo ago
People had literally the same arguments about Amazon, a company Matt Yglesias once described as "a charity run on behalf of the American consumer by the finance industry".
- fineIllregister 6mo ago
  This is an interesting comparison. So what's the AWS equivalent that can actually provide returns on the titanic investments going into AI?
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stanfordkid 6mo ago
They are bringing in $30B in revenue with 3X YoY growth. Why do you think it is a "jig"? I do think the US economy could implode, but thats because of war and wealth inequality in the midst of hyper-inflation. AI models aren't very useful when you have penniless consumers that can't buy the products they help build. All this is to say: the models are valuable, the companies building and providing them are very valuable. The biggest risk to AI companies IMO is further optimization and distillation of the capabilities into smaller and more efficient models. The moat these companies have right now is that higher intelligence requires more specialized and expensive compute. If you can do that for cheap then it kind of negates their business model. Everything is moving fast, we also yet to see world models/embodied AI and how that impacts thing. I think we've reached the peak with regards to capabilities of pure text trained LLMs.
pseudohadamard 6mo ago
It's not a "Hail Mary to get to AGI ASAP", it's a means of extending the money-go-round ride a bit longer. We'll make up some numbers and promise to donate those numbers to you if in return you make up some numbers and promise to donate those numbers to us. Banks, are you listening? Numbers! Big ones! Extend us more credit!
ItsBob 6mo ago
I think you're right. I think they are tightening the noose! I use Gemini quite extensively - I have a 5TB storage plan with Google so I get Pro thrown in. I also have Github Copilot Pro for IDE integration. However, lately it feels like I keep tripping the circuit breaker on Gemini more easily and get the message about using up all my Pro tokens for the next 3 hours. I used to be able to work most of the day before it hit the brakes but I can trigger it before work in the mornings now... that seems to me like they're tightening the usage limits! I use a Dell Micro PC with an Intel Core Ultra 265 so it's nice and fast but it has no GPU, hence the reason I use Gemini but I'm now starting to think that, despite the RAM cost, before the end of the year I'll buy a PC with a monster GPU in it and run all my AI locally... the direction of travel is clearly heading towards a massive cost increase so might as well get ahead of it: it's not going to become cheaper, that's for sure!

rvz 6mo ago

> Open models are promising and cost a fraction of what they proprietary models cost which the big two are vulnerable to when companies start to feel the cost of tokens. Anthropic are scared of open weight models and need to fear-monger towards you to continue paying for their models. That's the whole point of their 'safety' marketing narrative, account bans, and Dario being the AI scarecrow scaremongering everyone about nonsense like 'Mythos' towards the world. 'Mythos' is already here in the form of open-weight models that also found the same vulnerabilities as Anthropic did.

danieldoesbio 6mo ago
Genuine question here about the open-weight models finding the same vulnerabilities as mythos thing: is it just a matter of false negatives/positives? I’ve seen a few cases where people show other models (even opus) can find the same vulnerabilities given many passes. Is there some disadvantage to the extra passes that give the claimed Mythos performance extra value (assuming it finds them in less)?
- intothemild 6mo ago
  The thing is, mythos found those with multiple passes, thousands of passes... So using thousands of passes or perhaps the same budgets, yes, cheaper open weight models could potentially (and have) found the same/similar vulnerabilities. Mythos screams of marketing hype, and nothing more. Opus 4.7 isn't really a meaningful upgrade in any sense, other than being more expensive. Once you can see what something like Qwen3.6-35B-A3B can do... with just a FRACTION of the size of the larger models, You'll understand that the future is open weight models you can run yourself. Same goes for companies, bringing inference onsite isn't hard, I'm actively building tooling to orchestrate it.
  - danieldoesbio 6mo ago
    What is the failure state for a pass that doesn't find a real vulnerability? Do the models report no issues or hallucinate issues that aren't real? I'm trying to run open weight local models and finding them really impressive... Just also trying to understand the cybersecurity side of all this.
- tacet 6mo ago
  You have to keep in mind that it's not like anthropic just asked mythos to "find fancy bug, make no mistakes" and got the result. my quick read of the process they describe is that first they asked agents to rank files in order of potential to have interesting bugs, then they launch agents for each file in order of "interesting bug potential" and finally launch another agent for verification. (maybe i am mistaken, this is my read of this post https://red.anthropic.com/2026/mythos-preview/ https://red.anthropic.com/2026/mythos-preview/ ) it's not clear to me if they made just one pass over each file or made several passes for same file, but regardless, I think if you recreate roughly same process and burn 20000$ on tokens with other reasonably good model, you will find some fancy bugs too.

twoodfin 6mo ago

From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.

an0malous 6mo ago
> From the limited perspective of software development, today’s models are well-worth their per-token cost. At the current price or real price? Anthropic said a $200 subscription can cost them $5000 so the real price could be anywhere from 10-30x the current price.
- RealityVoid 6mo ago
  No, that is probably one of the worst cases they probably saw. Most likely the subscription inference cost is much lower than you expect. If you look at costs for similar open models they are much lower than what you get by buying from anthropic, so that is the real cost basis I expect. It's likely Amazon is making a fucking killing though.
  - SlinkyOnStairs 6mo ago
    While $5000 is a lot, the people who rack up close or just over a thousand "API equivalent cost" are pretty common. > Most likely the subscription inference cost is much lower than you expect. This is probably not true because they'd be screaming it off every rooftop were that the case. Same deal with the API inference. Even the "profitable on inference" claim is sourced back to hearsay of informal statements made by OpenAI/Anthropic staff. No formal announcements, nothing remotely of the "You can trust what I'm saying, because if I'm lying the SEC will have my head" sort. Yet making such statements would be invaluable. If Anthropic can demonstrate profitability before OpenAI, they could poach most of the funding. There's no reason to keep it a company secret. And API inference is only part of the total costs, not even bringing in training and ongoing fine-tuning. If they're not even profitable on inference, how could they hope to be profitable overall.

IshKebab 6mo ago

Doubtful. Look at how long Uber and Tesla have lasted despite making huge losses. Hell even Magic Leap somehow still exists (I guess because they don't have running costs beyond salaries). I think this can keep going for at least another 5 years.

Argonaut998 6mo ago
Uber had only 25B invested in them before their IPO. OpenAI has 120B invested in them currently which excludes these kinds of deals (as far as I’m aware)!
hliyan 6mo ago
> Look at how long Uber and Tesla have lasted In a system of open-ended growth, yes, you can point to how long the system has persisted as evidence of its longevity. But in a system of plateauing growth, the system's age is an indicator of how close it may be to death. I suspect that the model that permitted the "success" of Uber and Tesla is nearing the end of its lifetime.
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infecto 6mo ago

I am not sure how grounded this is in reality. Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Has there been a ton of hype? Absolutely but the value proposition is getting more and more tangible. Did some of the AI companies over commit in spending? I am sure and they will probably hurt in the long term. I thought Anthropic had been scaling towards profitability at a quick timeline though.

SlinkyOnStairs 6mo ago
> Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Most of this is still structured around "find use cases for AI" rather than one (or more) clear use cases being the reason for adopting AI. There's no "Lotus 1-2-3" of AI. Even the software development applications are still somewhat controversial and highly pushed based on "Sam Altman promised me 10x developers".
- infecto 6mo ago
  With the recent pushes into tools like Cowork/Claude Code for business users that’s not the reality I am seeing. We still have a long way to go to figure out the full value potential but it’s already at a point where there is a lot of low hanging fruit being able to be captured. Of course an anecdote of what I am seeing with my own company and companies I can peek into. YMMV but it’s a pretty clear path that these are going to be increasingly adopted.

paulddraper 6mo ago

Anthropic revenue is ~$30B/year.

lelanthran 6mo ago
Revenue is a meaningless measure though; what's the spend:income ratio? Excluding capital investments, what's the cost of operations? At a very minimum, to repay the +$100b in investment within a reasonable timeframe, what's the minimum figure they have to bank post-tax each month?
- signatoremo 6mo ago
  Since when revenue is meaningless? It’s an indication of market acceptance. Anthropic has one of the most expensive plan, they didn’t undersell other models. Open weight models would otherwise dominate if cost is the only factor. Also, investment is not money in the bank. They can’t withdraw $100b tomorrow. That means they don’t have to repay until after they got the investment, which is a commitment over several years.
  - svnt 6mo ago
    It is meaningless when what you sell costs more than what your customer pays for it. I could sell $100B of GPUs at 90% of their cost tomorrow and I have market acceptance.
  - stackskipton 6mo ago
    Because at some point, you have to turn a profit. That's why people are wondering the margins, if their revenue is 30B but expenses are 60B with current investment repayment factor in, that means massive revenue increases or massive lowering of expenses are required to make the business profitable. What's the business impact if they do?
  - lelanthran 6mo ago
    > Since when revenue is meaningless? When you're selling $10 Bill's for $1, then revenue is meaningless.

aa_is_op 6mo ago

>Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. It's only a matter of time until they crash the market. Nobody is making any money, even if the White House is dumping billions in their tools.

giancarlostoro 6mo ago

> Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. I think a LOT of companies really never needed to be on the public market, and its a darn shame that so many go on the stock market, we have this obnoxious culture where you have to fire tons of people if you have a bad quarter just to show you're stopping the bleeding. Companies literally fire and hire x number of people every quarter to keep things going, its ridiculous and unhealthy. Private companies rarely work like this, I'm sure there's exceptions. Every company I've worked at started off private, and those were their golden years, until some economic hurdle happened so they sold it off to a bigger fish who is on the stock market, who bought them to be more attractive to investors or what have you. I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years. I think this would make more sense. Maybe it doesn't fix the VC peeps want their money back nonsense, but if you could do it even for early stage companies, maybe it could help somewhat.

gowld 6mo ago
> we have this obnoxious culture where you choose to fire tons of people if you have a bad quarter just to show you're stopping the bleeding Fixed your error.
- giancarlostoro 6mo ago
  They choose to do so because they've lost money in a bad quarter, which might not be the case on the next quarter, its ridiculous. I would rather invest in a market where my investment is long term based, and you aren't just firing people to make numbers work. To these people its all about make the numbers work for investors, they don't care about anything else because of the way that market works. You can offramp your investment on a whim, which is ridiculous and volatile at times. Personally I would prefer more companies go private. Some companies probably wouldn't exist without the public market, like some social media companies, and maybe that's okay if they did not... Let companies fail, but also lets make investing smarter.
kgwgk 6mo ago
> I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years. That exists already! People often complain as well when a company ends its golden years because of some economic hurdle and ends up being acquired by a bigger fish who is _not_ on the stock market.

YetAnotherNick 6mo ago

> We are only just now getting a taste of the “true cost” of these tokens Why do you believe that? Better metric would be price per token of open models served by third party. Last I was tracking the price for similar level model was decreasing by more than 10x year on year, and they are 10-100x cheaper than top properietery models. Sure you can say that you can't compare them but for sure you can compare the top properietery model of 6 months back to current open models and the gap in time seems to be constant.

PunchyHamster 6mo ago

> Will data centres be built fast enough and powered sufficiently to lower the cost of compute thus tokens? ...building datacenters will not lower the cost. The cost (real, not investment hype subsidized one) will only drop with: * more efficient models * GPU/RAM market going back to reasonable pricing. The AI bubble pumped the second into unstustainable pricing and progress on first is going.. slowly.

xboxnolifes 6mo ago

If there is bubble to be popped, I'm guessing there's still a few years before it happens. Just based on the timeline of events, maybe end of 2028. Even if the big players find profitability, all of the other companies latching onto the AI-first identity will probably pop by then.

jurgenburgen 6mo ago
Private credit funds are already gating redemptions. Now with the energy crisis stemming from the war raising interest rates it’s not unimaginable that this pops the bubble.

mlinsey 6mo ago

You're observing that: a) effective price-per-token is rising b) there is insufficient compute to meet the demand. And your conclusion is that the industry is circling the drain and due to collapse?

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svnt 6mo ago
They are different observations, I think, though the phrasing confuses it: a) cost per successful task is rising — eg claude max allocation is functionally shrinking b) is there enough potential cost reduction in the queue to make up the gap c) if open models converge on a more efficient but slightly-less capable point (which has effectively happened) what is the actual moat?
- mlinsey 6mo ago
  Yes, cost per successful task is rising - ie, we are all paying effectively more for AI. And yet - Anthropic is still struggling to have enough capacity to serve demand - they are virtually sold out. And yes, are almost-as-good open models, on part with the closed models from 6 months ago (at worst), that are just a single Openrouter API call away, and yet Anthropic is still selling out. So people are paying for the premium product anyway, for whatever reason - maybe the last bit of intelligence is worth it, maybe they like the harnesses/products around the models, maybe it's a brand/enterprise sales thing. Put aside your feelings about the AI industry and imagine we are talking about thingamajigs. Prices for thingamajigs are going up. They are still selling out about as fast (or faster) than the company selling them can build factories. There are more cost-effective competitors already in the market, but thingamajigs are selling out anyway. Would you, looking at the thingamajig industry, conclude the "jig is almost up"? That "the returns aren’t anywhere close to what investors expect" and that the impending IPO is all some desperate hail mary to save things before the collapse?
  - svnt 6mo ago
    I don’t have feelings about the AI industry to put aside. I would not have sufficient information to assess whether thingamajigs are legitimately valuable or whether they are tulips. The only indicator I see is the last point about people using it in the short term despite having access to cost effective alternatives, which actually points to irrationality/FOMO more than legitimate value. What we are looking at looks to me like it is rapidly becoming a a commodity: it will become as existential as electricity and water to businesses, and it will be sold and marketed and regulated, more or less like a utility.

czhu12 6mo ago

I don’t necessarily disagree but to provide some counter points: 1. Model providers are currently profitable when just counting the cost to serve tokens for inference[1]. They lose money training the next generation of models. 2. Open models don’t work nearly as well. Given that tokens are still relatively cheap, and hallucinations are expensive, I’ve not seen a huge up tick in open model usage for coding agents yet. 3. On the AI economy front, I really have no idea, but AI companies (meta, msft) have already come down in value. It seems investors are at least a little wary of AI over valuation. Of course, the stock market is not the economy, but it’s not clear where warning signs would be. Earnings are healthy. 1: https://martinalderson.com/posts/no-it-doesnt-cost-anthropic-5k-per-claude-code-user/ https://martinalderson.com/posts/no-it-doesnt-cost-anthropic... 2: https://www.economist.com/finance-and-economics/2026/04/20/american-corporate-profits-keep-shrugging-off-global-tumult https://www.economist.com/finance-and-economics/2026/04/20/a...

bobro 6mo ago
Your point 1 and point 2 live in direct tension. The reason the closed models are better is very likely that they are paying so much to train them.
sassymuffinz 6mo ago
If I start a business making a really special beef sandwich where I have to buy a farm every year for $1mil dollars, and then sell the sandwiches for $5, I can't get away with saying that my sandwiches turn a profit if the raw margin on the bread, the lettuce and the technical value of the weight of the beef is $3. Sure my gross margin might be $2 on each sammie sold but I need to sell 500,000 sandwiches just to break even to be a viable business. The fact is these AI companies are playing the game where they talk about revenue and gross profit per token and just try to wave their hands in the face of anyone looking behind them at the crater they're throwing investor money into. It's nothing but a gamble for AGI but the grand irony is that if that genie escapes out of the bottle the whole world economy is toast and money becomes meaningless anyway. I just can't comprehend the logic of why anyone is investing in this apart from short term gains.
- 6mo ago

tptacek 6mo ago

People had literally the same arguments about Amazon, a company Matt Yglesias once described as "a charity run on behalf of the American consumer by the finance industry".

fineIllregister 6mo ago
This is an interesting comparison. So what's the AWS equivalent that can actually provide returns on the titanic investments going into AI?

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stanfordkid 6mo ago

They are bringing in $30B in revenue with 3X YoY growth. Why do you think it is a "jig"? I do think the US economy could implode, but thats because of war and wealth inequality in the midst of hyper-inflation. AI models aren't very useful when you have penniless consumers that can't buy the products they help build. All this is to say: the models are valuable, the companies building and providing them are very valuable. The biggest risk to AI companies IMO is further optimization and distillation of the capabilities into smaller and more efficient models. The moat these companies have right now is that higher intelligence requires more specialized and expensive compute. If you can do that for cheap then it kind of negates their business model. Everything is moving fast, we also yet to see world models/embodied AI and how that impacts thing. I think we've reached the peak with regards to capabilities of pure text trained LLMs.

pseudohadamard 6mo ago

It's not a "Hail Mary to get to AGI ASAP", it's a means of extending the money-go-round ride a bit longer. We'll make up some numbers and promise to donate those numbers to you if in return you make up some numbers and promise to donate those numbers to us. Banks, are you listening? Numbers! Big ones! Extend us more credit!

ItsBob 6mo ago

I think you're right. I think they are tightening the noose! I use Gemini quite extensively - I have a 5TB storage plan with Google so I get Pro thrown in. I also have Github Copilot Pro for IDE integration. However, lately it feels like I keep tripping the circuit breaker on Gemini more easily and get the message about using up all my Pro tokens for the next 3 hours. I used to be able to work most of the day before it hit the brakes but I can trigger it before work in the mornings now... that seems to me like they're tightening the usage limits! I use a Dell Micro PC with an Intel Core Ultra 265 so it's nice and fast but it has no GPU, hence the reason I use Gemini but I'm now starting to think that, despite the RAM cost, before the end of the year I'll buy a PC with a monster GPU in it and run all my AI locally... the direction of travel is clearly heading towards a massive cost increase so might as well get ahead of it: it's not going to become cheaper, that's for sure!