Anthropic is not going to fail. Claude does amazing things and all the companies built on top of it are more likely to fail because at the end of the day, we can remake their value proposition by using Claude and a few command line tools…
Anthropic is not going to fail. Claude does amazing things and all the companies built on top of it are more likely to fail because at the end of the day, we can remake their value proposition by using Claude and a few command line tools…
If Anthropic has made promises that its wallet cannot keep (as it looks like), it will fail. Let me remind you that Anthropic isn't profitable yet, and there's no clear path that it will be.
Okay fair enough. I don’t track the finances just what the tools are doing. And on that all these AI-Ifying documents and stuff doesn’t really have a moat, but Anthropic has a great product.
Either way the people should never bail out corporations.
> but Anthropic has a great product.
Give me $100 billion and I will make the greatest pencil sharpener that has ever existed, and possibly that will ever exist.
To be fair: You'd need to make at least several billions of revenue by selling pencil sharpeners while mostly spending the $100b on R&D (not the production of individual sharpeners)!
The market for AI is very clearly there; people are willing to pay more than enough so that providing LLM infrastructure (inference) is profitable.
Just the SOTA model R&D is pretty unsustainably expensive right now, but this only means that if the status quo "bursts" (because people realize that pushing the frontier is not paying off), model improvement will (probably) be slower afterward.
Note: this could also happen because expensive SOTA progress fails to keep ahead of "garage-trained" models, in such a case SOTA-AI lab investments collapsing would not really slow AI progress anyway.
Ok, then why are these mega corps not producing a net zero or net positive book?
At the debt levels they have, they need to start shoreing up their books or else the ramifications for the entire market will be apocalyptic
Because (some) investors with money still believe that this overspending (tbd.) on R&D is gonna pay off in the form of market share (or the generosity of our future AI overlords ;), and (some) dumb money is just following it.
An investment that needs to return 7x, alone, on hundreds of billions to trillions of investments... While not destroying the entire economy, or replacing it?
If you can capture a significant fraction of the gains made by automating lots of white-collar work, then those billions/trillions look more reasonable.
"Correct" investment volume towards early industrialization might have looked just as unreasonable without the benefit of hindsight.
How exactly is capturing 75% of white collar work not collapse western capitalism?
great products only take them so far, the question is are they great enough so people would be willing to pay the prices they'd need to ask if they would want to at least match their spending with their income
>but Anthropic has a great product
Let me guess, subscription user?
Yeah Pro subscription. I realize building something targeting API is probably astronomically more expensive.
And I realize also that they are reducing churn by keeping the value there for subscribers. Not sure what that’s costing them, but it’s definitely holding me as a customer. The product works so well for me that I honestly don’t need to even glance at the competition.
And honestly, this has been the case since day one. I’ve always used Claude. ChatGPT a bit in the beginning, but it’s emoji fetish and “bro” personality gave me the ick so I dropped them.
A Tesla model S for $2,000 would also be a fantastic product. As would a $200 RTX 5090. Or an M6 MBP for $200.
Not sure I understand.
> I don’t track the finances just what the tools are doing.
Then you have absolutely no idea what is going on. It has exactly zero to do with what AI can do, and everything to do with how the companies are being run. The technology will not die, but the AI bubble will pop, regardless of what Claude can do.
Anthropic probably is profitable. They were very close and growing rapidly.
The demand and profit margins for inference at the moment means that all these companies will make money off the physical investment.
The physical investment that devalues in <7 years in the absolute best case, <5yr in the standard case.
So are they showing a profit that can pay off these data centers before the turn of the decade? If not, they aren't profitable enough to succeed.
Jet airliners do amazing things, moving people across continents. But they are seldom profitable. Airlines, in general, struggle to make money and have to try every trick in the book to sometimes squeeze a profit.