9 ms·

Anthropic Is Preparing for IPO and We Should Be Worried

89 points by vincent_s 5mo ago

Forgeties79 5mo ago
VC’s weren’t going to keep them propped up forever and it’s not like any of these companies have even a semblance of a plan to get into the black, so unfortunately this was always going to be the next stage for any LLM start up not bought out and folded in to a big player.
- vincent_s 5mo ago
  I'd say it's a mixed bag. Yes, price increases are/were expected. But blocking 3rd party harnesses from their subscription and also moving SDK/claude-p access out of the subscription is blocking innovation and therefore future use of Claude models. What I mean is, while Claude models are SOTA, Claude Code is not. It's full of bugs and shortcomings and new innovative harnesses might make better use of the model, but this won't happen now as they are blocked. Same for all the people building their own scripts/workflows around claude -p or the SDK, they will now stop inventing new stuff on top of Claude.
  - Forgeties79 5mo ago
    I think it also doesn’t help that they’re all different flavors of the same tool and it’s very easy to jump between them. None of them actually made a particularly distinct product, and they want us to use their tool to make/justify the nebulous billion dollar product. As for subscription/token costs, even with increases they’re not even remotely covering costs. If people actually paid what it cost for these companies to even break even, nobody would be using these tools. They simply aren’t that consistently useful despite all the grand claims. They can be useful and in some areas they are very useful, but nobody is going to spend thousands of dollars a month to have something rewrite their emails regularly. And it’s not like these companies are trying to target one industry. They want to target everyone.
    - vincent_s 5mo ago
      Yeah I'm worried about that too. Current SOTA models might just be too expensive for most use cases if we had to pay the real costs.
      - Forgeties79 5mo ago
        I wonder if there's a bit of a standoff situation here where every company feels like they have to burn enormous amounts of cash training/iterating on their models because if they stop, they'll get leapfrogged too quickly. So unless they all agree to just settle where they are more or less and focus on building out functionality and tooling, they all have to keep spending at an unsustainable rate.
  - _old_dude_ 5mo ago
    If you do not block 3rd party harness, people will discover that a good harness is more important than a good model.
cmiles8 5mo ago
It’s going to be an interesting period ahead. The market is going to struggle to absorb SpaceX, OpenAI, Anthropic and others. They’re just massive relative to typical IPOs. Maybe one can sneak through but not all. Someone is going to have to have a very bad day and it’s not clear who yet. Separately there’s a big battle to keep these folks out of the S&P index, because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating. Get your popcorn ready.
- re-thc 5mo ago
  > because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating Most of S&P 500 have shares in these anyway e.g. Microsoft and OpenAI. Not really making THAT much of a difference.
  - SJMG 5mo ago
    Not to mention Tesla.
  - cmiles8 5mo ago
    ? No. These companies are not publicly traded yet so they are not in these indices. Funds are fighting to keep them out so they’re not required to buy stocks they think will tank.
    - twalla 5mo ago
      There is indirect exposure to Anthropic/OpenAI through all the incestuous partnerships between hyperscalers and NVDA
      - re-thc 5mo ago
        Exactly. Google has SpaceX stock. To make matters worse all the banks, insurers and investment firms in that S&P list are likely in there somewhere too. I'm sure I'm missing a whole lot more.
alex1138 5mo ago
I like Claude a lot. I hope it continues to be good
- vincent_s 5mo ago
  Well it will always be good in a way, but probably won't become better in the near future. Opus 4.7 was a downgrade in a way that gives Anthropic more control and better margins. And they keep Mythos away from the normies, giving access only to large corporations who pay millions for it.
- miroljub 5mo ago
  > I like Claude a lot. I hope it continues to be good I like strawberries. And car washing. I hope they stay unaffected by Claude's whims.
  - GrinningFool 5mo ago
    May have been better as: "I like stawberrries, and walking to the car wash to clean my car."
    - miroljub 5mo ago
      You're absolutely right! My mistake. I should have said: "I like starwberries, and driving to the car wash to clean my car."
fabian2k 5mo ago
I think it's a good thing if the pricing gets more realistic. Both for the customers long-term and for the economy. To evaluate AI tools and how much benefit they provide you need to evaluate the costs as well. And right now nobody truly knows where the costs will end up. That's fine as long as the prices are stable, but they aren't. In one example I know, a boring company that isn't a pure software company, the Github Copilot pricing change will make it around 15x as expensive as before. It's far from ideal when you cannot rely on pricing to stay somewhat stable.
- Aurornis 5mo ago
  Copilot isn’t a good example because they had an extremely broken pricing model that was meant to be a loss leader. For a short while if you promoted a certain way you could get a crazy number of tokens out of their billing model.
afavour 5mo ago
I hope price increases will mean we see serious moves towards open source and/or on device models. Feels like that's where we should all be headed but the current subsidy is a distraction.
- Fire-Dragon-DoL 5mo ago
  I agree but with the current hardware pricing it is a big problem
  - nradov 5mo ago
    Just be patient for a few years. Even with the end of Moore's Law, compute hardware pricing always declines over the long run.
    - Fire-Dragon-DoL 5mo ago
      Yeah I am waiting but: If anything breaks on my pc, it's going to be really rough. My kids grow fast,a few years is a lot for them too. And i have a bunch of games I want to play with my wife that require 2 computers sadly
- miroljub 5mo ago
  There is no subsidy in interference. Serving existing models is a highly profitable business. The proofs are many independent companies serving models for profit. What is expensive is model development and training, but again, that's nothing inherent to technology. It's just that Anthropic and other western vendors made a business decision to use cheap investors money to brute force a new model development and market grab instead of investing in cost optimizations for model training and inference like Chinese model developers and providers.
  - eigencoder 5mo ago
    As I understand it, those cost optimizations relied on someone else brute forcing new model development. If everyone was trying to do it cheaper, we wouldn't have the models we have today.
rvz 5mo ago
After Anthropic achieve's "safe" AGI (A Giant IPO). Those token prices are NOT going down as I am predicting [0] Why would they? They need to pay for the increasing costs and the high demand for running Claude and soon it will be reflected in their earnings releases. So every token cost counts and the subsidization era of tokens will eventually end. [0] https://news.ycombinator.com/item?id=46886918 https://news.ycombinator.com/item?id=46886918
- Forgeties79 5mo ago
  The real test is going to be anthropic’s IPO + when Microsoft charges for copilot on June 1. I think a lot of companies are going to learn people are not interested in paying for these tools because they just aren’t consistently useful across-the-board. Like 3-D printing it will thrive in certain industries but will not have nearly the broad appeal and daily use they promise investors.
this_user 5mo ago
Anthropic have clearly been working towards this since last year when they started focussing more on building products around their models that could be monetised, instead of competing on the most advanced chatbot. IMO this is part of a broader strategy on their part to tap into the enterprise market, because that is where the money is, not in selling subsidised subscriptions to consumers. This is also what the market will want to see: a credible path towards profitability.
the__alchemist 5mo ago
JCBP; some way to short this!
mrbonner 5mo ago
That just means there will be legitimate ways to short them.
swader999 5mo ago
It will be just fine to see other tools like opencode and pi and other models flourish as subscription benefits get increasingly nerfed.
surgical_fire 5mo ago
Of couse they are preparing for an IPO. They bleed ungodly amounts of money and have no path to approach something that resembles profitability. The next step of the grift is offloading this into the stock market so that the investors get the exit event. They will need a lot of bagholders this time around.
CharlieDigital 5mo ago
I have been sounding the alarm on my team that the current edict to go all-in and not plan features ("we can just throw it away and rebuild it"), not read code ("the agents should do all the coding and review") is something that will end up being a medium term regret since there will be a day of reckoning with pricing. My sense is that these companies actively need the audience of developers to have their ability to read and write code atrophy and even stunt the growth of early- and mid-career engineers; create the dependency. It will be interesting to see how this works out because some parts of the equation should get better over time (better algos, better infra), but there are now billions of dollars of investment to recoup and it will continue to be an arms race that requires more money.
bilsbie 5mo ago
GOOD POINT by my wife: it’s too early in the AI cycle to already have winners especially with sky high valuations. It’s like betting on ibm to win the pc race.
- ReptileMan 5mo ago
  It took tremendous effort by IBM to lose the PC race. They succeeded eventually - but it took some tries to get there.
bzmrgonz 5mo ago
Am I correct in thinking it's a race to who launches IPO now? I mean among the SOTA models. Especially since OpenAI has been given the all-clear by the court.
- okdood64 5mo ago
  So you mean just Anthropic vs OpenAI?
  - bzmrgonz 5mo ago
    you're right, the other SOTA's are megacorp whic have no interest in spinning off their AI to stand alone.
deleted 5mo ago
[deleted]
anshumankmr 5mo ago
X is happening and we should be worried (I mean I am not saying its not warranted but by god its like every article these days)
bugsense 5mo ago
Good luck to everyone who got equity in 2021/2022 software/crypto unicorns. Thoughts and prayers.
harrisaydin77 5mo ago
[flagged]

89 points by vincent_s 5mo ago

VC’s weren’t going to keep them propped up forever and it’s not like any of these companies have even a semblance of a plan to get into the black, so unfortunately this was always going to be the next stage for any LLM start up not bought out and folded in to a big player.

vincent_s 5mo ago
I'd say it's a mixed bag. Yes, price increases are/were expected. But blocking 3rd party harnesses from their subscription and also moving SDK/claude-p access out of the subscription is blocking innovation and therefore future use of Claude models. What I mean is, while Claude models are SOTA, Claude Code is not. It's full of bugs and shortcomings and new innovative harnesses might make better use of the model, but this won't happen now as they are blocked. Same for all the people building their own scripts/workflows around claude -p or the SDK, they will now stop inventing new stuff on top of Claude.
- Forgeties79 5mo ago
  I think it also doesn’t help that they’re all different flavors of the same tool and it’s very easy to jump between them. None of them actually made a particularly distinct product, and they want us to use their tool to make/justify the nebulous billion dollar product. As for subscription/token costs, even with increases they’re not even remotely covering costs. If people actually paid what it cost for these companies to even break even, nobody would be using these tools. They simply aren’t that consistently useful despite all the grand claims. They can be useful and in some areas they are very useful, but nobody is going to spend thousands of dollars a month to have something rewrite their emails regularly. And it’s not like these companies are trying to target one industry. They want to target everyone.
  - vincent_s 5mo ago
    Yeah I'm worried about that too. Current SOTA models might just be too expensive for most use cases if we had to pay the real costs.
    - Forgeties79 5mo ago
      I wonder if there's a bit of a standoff situation here where every company feels like they have to burn enormous amounts of cash training/iterating on their models because if they stop, they'll get leapfrogged too quickly. So unless they all agree to just settle where they are more or less and focus on building out functionality and tooling, they all have to keep spending at an unsustainable rate.
- _old_dude_ 5mo ago
  If you do not block 3rd party harness, people will discover that a good harness is more important than a good model.

cmiles8 5mo ago

It’s going to be an interesting period ahead. The market is going to struggle to absorb SpaceX, OpenAI, Anthropic and others. They’re just massive relative to typical IPOs. Maybe one can sneak through but not all. Someone is going to have to have a very bad day and it’s not clear who yet. Separately there’s a big battle to keep these folks out of the S&P index, because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating. Get your popcorn ready.

re-thc 5mo ago
> because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating Most of S&P 500 have shares in these anyway e.g. Microsoft and OpenAI. Not really making THAT much of a difference.
- SJMG 5mo ago
  Not to mention Tesla.
- cmiles8 5mo ago
  ? No. These companies are not publicly traded yet so they are not in these indices. Funds are fighting to keep them out so they’re not required to buy stocks they think will tank.
  - twalla 5mo ago
    There is indirect exposure to Anthropic/OpenAI through all the incestuous partnerships between hyperscalers and NVDA
    - re-thc 5mo ago
      Exactly. Google has SpaceX stock. To make matters worse all the banks, insurers and investment firms in that S&P list are likely in there somewhere too. I'm sure I'm missing a whole lot more.

alex1138 5mo ago

I like Claude a lot. I hope it continues to be good

vincent_s 5mo ago
Well it will always be good in a way, but probably won't become better in the near future. Opus 4.7 was a downgrade in a way that gives Anthropic more control and better margins. And they keep Mythos away from the normies, giving access only to large corporations who pay millions for it.
miroljub 5mo ago
> I like Claude a lot. I hope it continues to be good I like strawberries. And car washing. I hope they stay unaffected by Claude's whims.
- GrinningFool 5mo ago
  May have been better as: "I like stawberrries, and walking to the car wash to clean my car."
  - miroljub 5mo ago
    You're absolutely right! My mistake. I should have said: "I like starwberries, and driving to the car wash to clean my car."

fabian2k 5mo ago

I think it's a good thing if the pricing gets more realistic. Both for the customers long-term and for the economy. To evaluate AI tools and how much benefit they provide you need to evaluate the costs as well. And right now nobody truly knows where the costs will end up. That's fine as long as the prices are stable, but they aren't. In one example I know, a boring company that isn't a pure software company, the Github Copilot pricing change will make it around 15x as expensive as before. It's far from ideal when you cannot rely on pricing to stay somewhat stable.

Aurornis 5mo ago
Copilot isn’t a good example because they had an extremely broken pricing model that was meant to be a loss leader. For a short while if you promoted a certain way you could get a crazy number of tokens out of their billing model.

afavour 5mo ago

I hope price increases will mean we see serious moves towards open source and/or on device models. Feels like that's where we should all be headed but the current subsidy is a distraction.

Fire-Dragon-DoL 5mo ago
I agree but with the current hardware pricing it is a big problem
- nradov 5mo ago
  Just be patient for a few years. Even with the end of Moore's Law, compute hardware pricing always declines over the long run.
  - Fire-Dragon-DoL 5mo ago
    Yeah I am waiting but: If anything breaks on my pc, it's going to be really rough. My kids grow fast,a few years is a lot for them too. And i have a bunch of games I want to play with my wife that require 2 computers sadly
miroljub 5mo ago
There is no subsidy in interference. Serving existing models is a highly profitable business. The proofs are many independent companies serving models for profit. What is expensive is model development and training, but again, that's nothing inherent to technology. It's just that Anthropic and other western vendors made a business decision to use cheap investors money to brute force a new model development and market grab instead of investing in cost optimizations for model training and inference like Chinese model developers and providers.
- eigencoder 5mo ago
  As I understand it, those cost optimizations relied on someone else brute forcing new model development. If everyone was trying to do it cheaper, we wouldn't have the models we have today.

rvz 5mo ago

After Anthropic achieve's "safe" AGI (A Giant IPO). Those token prices are NOT going down as I am predicting [0] Why would they? They need to pay for the increasing costs and the high demand for running Claude and soon it will be reflected in their earnings releases. So every token cost counts and the subsidization era of tokens will eventually end. [0] https://news.ycombinator.com/item?id=46886918 https://news.ycombinator.com/item?id=46886918

Forgeties79 5mo ago
The real test is going to be anthropic’s IPO + when Microsoft charges for copilot on June 1. I think a lot of companies are going to learn people are not interested in paying for these tools because they just aren’t consistently useful across-the-board. Like 3-D printing it will thrive in certain industries but will not have nearly the broad appeal and daily use they promise investors.

this_user 5mo ago

Anthropic have clearly been working towards this since last year when they started focussing more on building products around their models that could be monetised, instead of competing on the most advanced chatbot. IMO this is part of a broader strategy on their part to tap into the enterprise market, because that is where the money is, not in selling subsidised subscriptions to consumers. This is also what the market will want to see: a credible path towards profitability.

the__alchemist 5mo ago

JCBP; some way to short this!

mrbonner 5mo ago

That just means there will be legitimate ways to short them.

swader999 5mo ago

It will be just fine to see other tools like opencode and pi and other models flourish as subscription benefits get increasingly nerfed.

surgical_fire 5mo ago

Of couse they are preparing for an IPO. They bleed ungodly amounts of money and have no path to approach something that resembles profitability. The next step of the grift is offloading this into the stock market so that the investors get the exit event. They will need a lot of bagholders this time around.

CharlieDigital 5mo ago

I have been sounding the alarm on my team that the current edict to go all-in and not plan features ("we can just throw it away and rebuild it"), not read code ("the agents should do all the coding and review") is something that will end up being a medium term regret since there will be a day of reckoning with pricing. My sense is that these companies actively need the audience of developers to have their ability to read and write code atrophy and even stunt the growth of early- and mid-career engineers; create the dependency. It will be interesting to see how this works out because some parts of the equation should get better over time (better algos, better infra), but there are now billions of dollars of investment to recoup and it will continue to be an arms race that requires more money.

bilsbie 5mo ago

GOOD POINT by my wife: it’s too early in the AI cycle to already have winners especially with sky high valuations. It’s like betting on ibm to win the pc race.

ReptileMan 5mo ago
It took tremendous effort by IBM to lose the PC race. They succeeded eventually - but it took some tries to get there.

bzmrgonz 5mo ago

Am I correct in thinking it's a race to who launches IPO now? I mean among the SOTA models. Especially since OpenAI has been given the all-clear by the court.

okdood64 5mo ago
So you mean just Anthropic vs OpenAI?
- bzmrgonz 5mo ago
  you're right, the other SOTA's are megacorp whic have no interest in spinning off their AI to stand alone.

deleted 5mo ago

[deleted]

anshumankmr 5mo ago

X is happening and we should be worried (I mean I am not saying its not warranted but by god its like every article these days)

bugsense 5mo ago

Good luck to everyone who got equity in 2021/2022 software/crypto unicorns. Thoughts and prayers.

harrisaydin77 5mo ago

[flagged]