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> The money Anthropic pay to Amazon for delivering Anthropic models via Bedrock is separate, independent of compute costs, best thought of as commission. My po

by nl 11d ago

> The money Anthropic pay to Amazon for delivering Anthropic models via Bedrock is separate, independent of compute costs, best thought of as commission. My point is that you can't reverse out the maths like you did without knowing how much this is. > These tokens are not included in the 80% margins, they are acknowledged to be "subsidized". No, this isn't correct. Even including these they are claiming 80% margins. There's nothing at all that indicates subscriptions aren't included in this - it's a simple statement of their running margin. > these big models they're actually very expensive to run on inference the majority of the cost is is inference not necessarily the training of the model I don't think you can take this statement to claim that currently they spend more on inference than on training. I think he's saying over the lifetime of a model maybe inference ends up costing more unless they keep finding "better way to do inference that can kind of negate the effect". > If Anthropic and OpenAI needed to be profitable tomorrow, they could be, they could kill off all their fixed price subscription plans and charge only for usage via the API, they'd print money My point is that their subscription costs are a lot less than you think because of this statement by Anthropic that they have 80% margins including these subscriptions.

reticulates 11d ago
Your version of reality cannot be real because the numbers do not make sense. Anthropic's supposed revenue run rate for 2026 puts December 2026's forecasted revenue at $10 billion. They're only "profitable" according to a non-GAAP measure that excludes all of their costs, they are not cash flow positive, they are not bringing in more money than they are spending. If their margins are 80%, that means on $10 billion in revenue they're spending just $2 billion. Anthropic's own announcements put their spending at much, much higher, such as the $1.25 billion per month they are paying to SpaceX for compute, and the ~$3.5 billion they're paying to Google each month, and the billions to Amazon each month too. https://www.anthropic.com/news/higher-limits-spacex https://www.anthropic.com/news/higher-limits-spacex > We’ve signed an agreement with SpaceX to use all of the compute capacity at their Colossus 1 data center. This gives us access to more than 300 megawatts of new capacity (over 220,000 NVIDIA GPUs) within the month. This additional capacity will directly improve capacity for Claude Pro and Claude Max subscribers. There's no world in which Anthropic has 80% margins. At their current expenditure on compute it would require at least $20 billion in revenue to be mathematically possible. The 80% figure on compute margins that is widely discussed is based on analysis by SemiAnalysis and refers only to their per-token compute margin (which is calculated comparing hardware costs + electricity costs to what they charge via the API). The estimated training costs for models like Opus and Astra are ~$1 billion and they're not training multiple frontier models in parallel every month. Training costs cannot explain where billions of dollars per month are disappearing if they have 80% margins. And that's before even considering all the money they're raising and spending. Anthropic raised tens of billions just a few months ago, OpenAI even more. Where is the money going?
- nl 9d ago
  > The 80% figure on compute margins that is widely discussed is based on analysis by SemiAnalysis No. To quote from my link above: > Anthropic has told its backers it will be profitable this quarter, as it moves to allay investor concerns about the aggressive cash burn of frontier AI companies ahead of its blockbuster initial public offering. > The company has told a small group of shareholders that its adjusted operating income will be positive for the second consecutive quarter, [snip] > Anthropic’s gross margins are above 80 per cent before accounting for revenue shared with distribution partners, including Amazon, and the cost of training its models, according to two of the people. So this is a direct claim by Anthropic people, not analysis by outsiders. > If their margins are 80%, that means on $10 billion in revenue they're spending just $2 billion. Agree - but only spending $2B on inference. > Anthropic's own announcements put their spending at much, much higher, such as the $1.25 billion per month they are paying to SpaceX for compute, and the ~$3.5 billion they're paying to Google each month, and the billions to Amazon each month too. I don't believe this compute is sorely dedicated to inference. Only the part dedicated to inference is included in this profit rate calculation.

by nl 11d ago

reticulates 11d ago

Your version of reality cannot be real because the numbers do not make sense. Anthropic's supposed revenue run rate for 2026 puts December 2026's forecasted revenue at $10 billion. They're only "profitable" according to a non-GAAP measure that excludes all of their costs, they are not cash flow positive, they are not bringing in more money than they are spending. If their margins are 80%, that means on $10 billion in revenue they're spending just $2 billion. Anthropic's own announcements put their spending at much, much higher, such as the $1.25 billion per month they are paying to SpaceX for compute, and the ~$3.5 billion they're paying to Google each month, and the billions to Amazon each month too. https://www.anthropic.com/news/higher-limits-spacex https://www.anthropic.com/news/higher-limits-spacex > We’ve signed an agreement with SpaceX to use all of the compute capacity at their Colossus 1 data center. This gives us access to more than 300 megawatts of new capacity (over 220,000 NVIDIA GPUs) within the month. This additional capacity will directly improve capacity for Claude Pro and Claude Max subscribers. There's no world in which Anthropic has 80% margins. At their current expenditure on compute it would require at least $20 billion in revenue to be mathematically possible. The 80% figure on compute margins that is widely discussed is based on analysis by SemiAnalysis and refers only to their per-token compute margin (which is calculated comparing hardware costs + electricity costs to what they charge via the API). The estimated training costs for models like Opus and Astra are ~$1 billion and they're not training multiple frontier models in parallel every month. Training costs cannot explain where billions of dollars per month are disappearing if they have 80% margins. And that's before even considering all the money they're raising and spending. Anthropic raised tens of billions just a few months ago, OpenAI even more. Where is the money going?

nl 9d ago
> The 80% figure on compute margins that is widely discussed is based on analysis by SemiAnalysis No. To quote from my link above: > Anthropic has told its backers it will be profitable this quarter, as it moves to allay investor concerns about the aggressive cash burn of frontier AI companies ahead of its blockbuster initial public offering. > The company has told a small group of shareholders that its adjusted operating income will be positive for the second consecutive quarter, [snip] > Anthropic’s gross margins are above 80 per cent before accounting for revenue shared with distribution partners, including Amazon, and the cost of training its models, according to two of the people. So this is a direct claim by Anthropic people, not analysis by outsiders. > If their margins are 80%, that means on $10 billion in revenue they're spending just $2 billion. Agree - but only spending $2B on inference. > Anthropic's own announcements put their spending at much, much higher, such as the $1.25 billion per month they are paying to SpaceX for compute, and the ~$3.5 billion they're paying to Google each month, and the billions to Amazon each month too. I don't believe this compute is sorely dedicated to inference. Only the part dedicated to inference is included in this profit rate calculation.