4 ms·

I think when these companies IPO later this year, we’re going to see the reality of the PNL numbers and whether they are sustainable etc as all the financials w

I think when these companies IPO later this year, we’re going to see the reality of the PNL numbers and whether they are sustainable etc as all the financials will become public. Rumor mill suggests that Anthropic might be profitable (but at what magnitude), OpenAI is not profitable, Google is mostly vertically integrated and has a low cost structure as they are have pre-existing data center buildouts, their own silicon and experience that suggests they will be able to operate at a very low cost, but they still have to justify their spend. I think having to report numbers publically on a quarterly basis will bring the whole thing into reality.

Zigurd 5mo ago
> later this year One can hope that reality intrudes before the bubble gets even more dangerously inflated, but how many years has Tesla had a ridiculous P/E ratio. Even after growth stagnated and market leadership was lost in Asia and Europe. Number still goes up.
- hnthrow0287345 5mo ago
  If anything though, this shows that at least tech driven hype bubbles can stay around way longer than we think if we are looking at it from a product POV. This just means short sellers might have a hard time sinking a hype-category stock with reasoned research because the irrationality keeps it afloat.
  - ChartMaster22 5mo ago
    "Markets can remain irrational longer than you can remain solvent." - John Maynard Keynes
    - devin 5mo ago
      Sometimes I wonder if Keynes would under the current conditions see fit to differentiate "merely irrational" from "absolutely insane".
- BeetleB 5mo ago
  I hate Musk, and I'm not going to justify Tesla's crazy stock valuation, but consider the following: Outside of China, Tesla's probably the only company that can compete on battery prices. I don't know how accurate it was, but a news report was comparing the cost the manufacturer's pay to build the battery. Chinese companies were around $6000. Tesla was at $7000. Everyone else was around $12-15K. This is why a number of companies have exited the EV market - they just can't compete. This is why Ford lost money on every EV, despite the high MSRP. This is why the Ford CEO says "We're f####d" when he saw Chinese cars. The only hope regular Japanese/American/European auto manufacturers have is if EVs do not gain substantial market share. If the future is EVs, Tesla is the only non-Chinese company that has a chance. It's depressing.
  - Zigurd 5mo ago
    It's not depressing because it's not true. Tesla isn't investing in battery technology. Tesla also isn't developing new models at the same rate as VW, BMW, Mercedes, Hyundai Kia, etc.
    - 4ndrewl 5mo ago
      This. It doesn't really look like Tesla is doing anything rn but selling old cars. They don't appear to be the future any more.
      - SirMaster 5mo ago
        It doesn't look like they are developing self-driving? What other company is developing self-driving at a level of sophistication as Tesla that you can actually buy in a consumer vehicle?
        4ndrewl 5mo ago
        I suppose, if you live in a jurisdiction/insurance regime where it's usable. But people like buying new cars, new models, new designs. Not just features - those are just options.
        5mo ago
daxfohl 5mo ago
Agreed, and assuming local open AI models start catching up, which they seem to be doing, the foundation models' hold on society gets a lot slipperier. If there's a "what to do about all this" from an engineer's standpoint, pushing the needle toward local models, whether in research, agents, or just using them, understanding how they work, and advocating for them when it makes sense (which is more often than they get credit for) is probably the best ROI.
- dangus 5mo ago
  While I agree with you on open models getting better, I have been starting to see how the value, the reason you pay for Claude, isn’t in the models. For example, I just hooked Claude desktop up to my outlook to build a report for my timesheet then I used the chrome extension to fill it out automatically with that data. It could read Jira tickets if that’s where the information was. A local model can’t do that for me because I have to get the rest of the integration software somewhere. I also think this is why OpenAI is the worst positioned of the group of AI giants. Anthropic is trying to make a productivity operating system, while ChatGPT is basically just a website until recently.
  - daxfohl 5mo ago
    So far there's no moat though. A lot of that kind of stuff is available open source too if you look for it (and was available before claude desktop). And for anything that doesn't exist, with coding agents now you can write one up in an afternoon. It's kind of paradoxical in a way. By making writing software cheap, they've made it much harder to create a moat for themselves that involves only software. It'll be interesting to see how they respond.
    - dangus 5mo ago
      If there’s an open source alternative to Claude desktop that has a similar amount of extensibility with connectors specifically I’d be very interested to know about it. I’m very much not deep into this space.
fragmede 5mo ago
> having to report numbers publically on a quarterly basis They won't need to do that if the new rules come into effect.
deleted 5mo ago
[deleted]
brightball 5mo ago
Google really needs to work on the user experience. The Google Cloud based approach to Gemini for coding is so clunky.
- kingleopold 5mo ago
  they really dont care I think. Only Sergey brin cared for a while and he is silent again
- FuriouslyAdrift 5mo ago
  I thought most people used Antigravity to code with Gemini? https://antigravity.google/ https://antigravity.google/
- cute_boi 5mo ago
  Things went down why they hired anti gravity team. This thing is very had and isn't even opensourced.
- logicchains 5mo ago
  The current Gemini experience is "The Google Experience"; brilliant engineering underneath, disdain for customers on top.
BrenBarn 5mo ago
> I think having to report numbers publically on a quarterly basis will bring the whole thing into reality. That is a good reason that all companies (over a certain size, say in terms of gross expenditures) should have to report such numbers. There's no reason that huge companies should be able to distort the economy while not having to report anything just because they're not publicly traded.
Unit327 5mo ago
Anthropic have only scraped together a month of profitability by cooking the books. They have an extreme compute discount from spacex that only applies for the first couple of months of the deal. By pushing the costs down the road they can make themselves look good before IPO. Even they have admitted publicly though that they don't expect profitability to last.
33MHz-i486 5mo ago
i think the narrative of “all white collar employment replacement in the near future” can sustain their public market valuation for many years, regardless of how profitable they are in the medium term.
doctorpangloss 5mo ago
you: insurmountable cost structure for LLM providers also you: only three companies make LLMs people pay for sounds like a 15 minute phone call to form a cartel is all that is between them and profitability? less money has been made on more complex schemes.

Zigurd 5mo ago

> later this year One can hope that reality intrudes before the bubble gets even more dangerously inflated, but how many years has Tesla had a ridiculous P/E ratio. Even after growth stagnated and market leadership was lost in Asia and Europe. Number still goes up.

hnthrow0287345 5mo ago
If anything though, this shows that at least tech driven hype bubbles can stay around way longer than we think if we are looking at it from a product POV. This just means short sellers might have a hard time sinking a hype-category stock with reasoned research because the irrationality keeps it afloat.
- ChartMaster22 5mo ago
  "Markets can remain irrational longer than you can remain solvent." - John Maynard Keynes
  - devin 5mo ago
    Sometimes I wonder if Keynes would under the current conditions see fit to differentiate "merely irrational" from "absolutely insane".
BeetleB 5mo ago
I hate Musk, and I'm not going to justify Tesla's crazy stock valuation, but consider the following: Outside of China, Tesla's probably the only company that can compete on battery prices. I don't know how accurate it was, but a news report was comparing the cost the manufacturer's pay to build the battery. Chinese companies were around $6000. Tesla was at $7000. Everyone else was around $12-15K. This is why a number of companies have exited the EV market - they just can't compete. This is why Ford lost money on every EV, despite the high MSRP. This is why the Ford CEO says "We're f####d" when he saw Chinese cars. The only hope regular Japanese/American/European auto manufacturers have is if EVs do not gain substantial market share. If the future is EVs, Tesla is the only non-Chinese company that has a chance. It's depressing.
- Zigurd 5mo ago
  It's not depressing because it's not true. Tesla isn't investing in battery technology. Tesla also isn't developing new models at the same rate as VW, BMW, Mercedes, Hyundai Kia, etc.
  - 4ndrewl 5mo ago
    This. It doesn't really look like Tesla is doing anything rn but selling old cars. They don't appear to be the future any more.
    - SirMaster 5mo ago
      It doesn't look like they are developing self-driving? What other company is developing self-driving at a level of sophistication as Tesla that you can actually buy in a consumer vehicle?
      - 4ndrewl 5mo ago
        I suppose, if you live in a jurisdiction/insurance regime where it's usable. But people like buying new cars, new models, new designs. Not just features - those are just options.
      - 5mo ago

daxfohl 5mo ago

Agreed, and assuming local open AI models start catching up, which they seem to be doing, the foundation models' hold on society gets a lot slipperier. If there's a "what to do about all this" from an engineer's standpoint, pushing the needle toward local models, whether in research, agents, or just using them, understanding how they work, and advocating for them when it makes sense (which is more often than they get credit for) is probably the best ROI.

dangus 5mo ago
While I agree with you on open models getting better, I have been starting to see how the value, the reason you pay for Claude, isn’t in the models. For example, I just hooked Claude desktop up to my outlook to build a report for my timesheet then I used the chrome extension to fill it out automatically with that data. It could read Jira tickets if that’s where the information was. A local model can’t do that for me because I have to get the rest of the integration software somewhere. I also think this is why OpenAI is the worst positioned of the group of AI giants. Anthropic is trying to make a productivity operating system, while ChatGPT is basically just a website until recently.
- daxfohl 5mo ago
  So far there's no moat though. A lot of that kind of stuff is available open source too if you look for it (and was available before claude desktop). And for anything that doesn't exist, with coding agents now you can write one up in an afternoon. It's kind of paradoxical in a way. By making writing software cheap, they've made it much harder to create a moat for themselves that involves only software. It'll be interesting to see how they respond.
  - dangus 5mo ago
    If there’s an open source alternative to Claude desktop that has a similar amount of extensibility with connectors specifically I’d be very interested to know about it. I’m very much not deep into this space.

fragmede 5mo ago

> having to report numbers publically on a quarterly basis They won't need to do that if the new rules come into effect.

deleted 5mo ago

[deleted]

brightball 5mo ago

Google really needs to work on the user experience. The Google Cloud based approach to Gemini for coding is so clunky.

kingleopold 5mo ago
they really dont care I think. Only Sergey brin cared for a while and he is silent again
FuriouslyAdrift 5mo ago
I thought most people used Antigravity to code with Gemini? https://antigravity.google/ https://antigravity.google/
cute_boi 5mo ago
Things went down why they hired anti gravity team. This thing is very had and isn't even opensourced.
logicchains 5mo ago
The current Gemini experience is "The Google Experience"; brilliant engineering underneath, disdain for customers on top.

BrenBarn 5mo ago

> I think having to report numbers publically on a quarterly basis will bring the whole thing into reality. That is a good reason that all companies (over a certain size, say in terms of gross expenditures) should have to report such numbers. There's no reason that huge companies should be able to distort the economy while not having to report anything just because they're not publicly traded.

Unit327 5mo ago

Anthropic have only scraped together a month of profitability by cooking the books. They have an extreme compute discount from spacex that only applies for the first couple of months of the deal. By pushing the costs down the road they can make themselves look good before IPO. Even they have admitted publicly though that they don't expect profitability to last.

33MHz-i486 5mo ago

i think the narrative of “all white collar employment replacement in the near future” can sustain their public market valuation for many years, regardless of how profitable they are in the medium term.

doctorpangloss 5mo ago

you: insurmountable cost structure for LLM providers also you: only three companies make LLMs people pay for sounds like a 15 minute phone call to form a cartel is all that is between them and profitability? less money has been made on more complex schemes.