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If people were not consuming their services they would not be buying inference hardware at this rate so it's pretty much on consumers.
by qaq 3mo ago
If people were not consuming their services they would not be buying inference hardware at this rate so it's pretty much on consumers.
- Insanity 3mo agoThey are reserving future HW productions to meet their hypothetical usage as well. Which is why others (like Apple) can’t reserve it for their future products. Yet the AI labs are speculating on usage, and spending money from investments without clear revenue path.
- qaq 3mo agoYes 65B ARR that Anthropic has is clear indication there is no path to revenue.
- mrbungie 3mo agoHow much money does that revenue cost though? If I had to steel-man GPs argument I'd ask for profits rather than revenues.
- qaq 3mo agoWe will see once they go public Dario did claim profit margin on inference is 40% if memory serves me right
- mrbungie 3mo agoThat's convenient accounting. The reality is that they can't stop training since they risk losing customers if they do so. So they shouldn't factor it out of profitability analysis.
- qaq 3mo agoA lot of factors there we will see how it plays out.
- overgard 3mo agoYes Dario is well known for his honesty
- qaq 3mo agohence the bit about us learning the actual state of things once they are a public company.
- Insanity 3mo agoSorry, I should have said "profit path", good catch! They have revenue, but their cost scales with revenue and they're losing more than they are making. See: https://www.wheresyoured.at/brokenomics/ https://www.wheresyoured.at/brokenomics/ for an interesting write-up on the economics of AI.
- qaq 3mo agoIf people are sure they can always short NVIDIA
- brookst 3mo agoTheir costs do not scale linearly with revenue. Inference is expensive, but it's a variable cost. Anthropic's overall costs include massive fixed costs in training, which are the same regardless of usage. It's easy to falsify the claim with a simple experiment: imagine they had no customer at all, $0 in revenue. Their costs would still be massive. If the claim were true, $0 revenue should mean $0 costs, right?
- danabrams 3mo agoThis is not sustainable forever unless their hypothetical usage is realized, and eventually the bill will come due. Meanwhile, component makers will surely be spinning up more capacity, some of them in a foolhardy manner, and if the bubble does burst, 3-6 months later we'll be seeing fire sales on components and component makers going bankrupt (or getting bailouts, if considered of national importance)
- coldtea 3mo agoPeople will consume a lot of things offered below actual cost thanks to VC and cheap loans. Doesn't mean people would legitimately use them enough to warrant such infrastracture demand, if they were priced according to actual costs. So it's a distorted market.
- qaq 3mo agoMost of Anthropic revenue looks to be companies paying for Claude Code at API prices ...
- coldtea 3mo agoCompanies will consume a lot of things offered below actual cost thanks to VC and cheap loans.
- qaq 3mo agoAPI pricing is def not below cost
- coldtea 3mo ago"def" doing a lot of work here. It is more expensive? yeah Is it "definitely not below cost"? hardly except if as cost here only the inference cost is considered, and not the capital investment, and maintenance costs (not to mention r&d, marketing, and others). to put it another way, if they just had the corporate API subs today, would they be profitable?
- crypttales 3mo ago[dead]
- rpgbr 3mo agoAsk every Windows 11 or Google consumer that doesn't give a damn for AI and, yet, has been almost forced to use Copilot and Gemini…