There's other side to it too.

Whoever running and selling their own models with inference is invested into the last dime available in the market.

Those valuations are already ridiculously high be it Anthropic or OpenAI to the tune of couple of trillion dollars easily if combind.

All that investment is seeking return. Correct me if I'm wrong.

Developers and software companies are the only serious users because they (mostly) review output of these models out of both culture and necessity.

Anywhere else? Other fields? There these models aren't any useful or as useful while revenue from software companies by no means going to bring returns to the trillion dollar valuations. Correct me if I'm wrong.

To make the matter worst, there's a hole in the bucket in form of open weight models. When squeezed further, software companies would either deploy open weight models or would resort to writing code by hand because that's a very skilled and hardworking tribe they've been doing this all their lives, whole careers are built on that. Correct me if I'm wrong.

Eventually - ROI might not be what VCs expect and constant losses might lead to bankruptcies and all that build out of data centers all of sudden would be looking for someone to rent that compute capacity result of which would be dime a dozen open weight model providers with generous usage tiers to capitalize on that available compute capacity owners of which have gone bankrupt and can't use it any more wanting to liquidate it as much as possible to recoup as much investment as possible.

EDIT: Typos

▲ solenoid0937 4 days ago | parent | next [-]

OpenAI has an absurdly high valuation given their cash burn vs RRR.

Anthropic's is far more reasonable.

It makes no sense to lump these two companies together when talking about valuation. They have completely different financial dynamics

▲ wg0 4 days ago | parent [-]

No matter how low and reasonably Anthropic is valued, don't think $200 Max plans are going to recoup the investment + some return on top because size of the software industry is not that huge and profit margins for AI inference aren't very high either.

▲ ElFitz 4 days ago | parent | next [-]

> because size of the software industry is not that huge

I onboarded marketing on a premium team Claude seat yesterday. And one of our sales vibecoded an internal tool in the last three weeks using Claude Code that they now use every day. I wouldn’t have imagined it a month ago. We still had to take care of deployment for him, but things are moving fast.

▲ raw_anon_1111 4 days ago | parent | prev | next [-]

And nor are they trying to. If you are spending $200 a month, you are a mere tolerated nuisance. The company I work for gives every developer a $5000 a month allowance to Claude and I think there are around 500-600 people eligible for it.

▲

bdangubic 4 days ago | parent [-]

comments like these is probably while significant contingent of HN talks heavily about AI bubble. burning that kind of cash always ends up like the right move, godspeed :)

	▲	raw_anon_1111 4 days ago \| parent [-]
		I work for a consulting company, we know exactly how much each billable person makes the company and whether the ROI is worth it. We don’t have to measure “productivity gains”. I personally don’t come close to that and neither do I suspect most of us. Between using my $20 a month ChatGPT subscription with Codex and the amount of time I spend on Zoom calls “adding on to what Becky said” and “looking at things from the 1000 foot view” On another note, the grunt work I use to delegate to a junior consultant, I now can get Claude to do in a fraction of the the time. They were making a lot more than the worse case of $72K a year fully allocated. But honestly most of that work is done with my $240 a year ChatGPT subscription + maybe $600 in Claude at the current prices/limits

▲ solenoid0937 4 days ago | parent | prev [-]

Pro and Max plans are probably a drop in the bucket for them.

▲ drra 4 days ago | parent [-]

Seems like everybody an their mothers are using max plans these days. I wouldn't be surprised if LTV of each customer was big enough to justify spending.

▲ wg0 4 days ago | parent [-]

Assuming there are 10 million developers and everyone is at $200 max plan, that would be $2 billion/month or $24 billion/year maximum.

Note - this is just the revenue not the profit. No salaries, no compute paid for. Just plain revenue. Profit would be way less.

But even that - if we take it to $24 billion/year and we take a 10x multiple, the company is barely valued at $240 billon dollar, lets be generous and make it double at $480 billion and then round it up to $500 billion for a nice round number.

Far far from the $800 billion valuation Anthropic is looking at.

Only a matter of time.

EDIT: Fixed math

▲ billziss 4 days ago | parent | next [-]

While I agree with you that AI companies are overvalued, I think 10 million developers at $200 per month makes 2 billion.

    >>> f"{10_000_000 * 200:_}"
    '2_000_000_000'

	▲	wg0 4 days ago \| parent [-]
		Thanks for pointing out. I updated the comment.

▲ steveklabnik 4 days ago | parent | prev | next [-]

Companies are spending far more than $200/month/developer. The $200 Max plan is a great value but you hit limits far too soon, and it also doesn't cover any of the other styles of integrations and tools that you can build and use to help your developers, like code review suggestions, which at the very least would come from additional Max plans, and not from the individual developers' plans.

▲ solenoid0937 4 days ago | parent | prev [-]

Pro and Max plans are a tiny fraction of their revenue. Many businesses are spending thousands of dollars per head per month.

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wg0 4 days ago | parent [-]

Really? Not challenging you, genuinely asking for more details.

If that is true, I think AI is counterproductive from the bean counter's standpoint.

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solenoid0937 4 days ago | parent [-]

Not counterproductive because people aren't just sitting back in the rest of the time while AI does work. They do more work. $3k per head on Claude is nothing if your devs get 2x more work done.

	▲	wg0 4 days ago \| parent [-]
		Do they review the code? Because in my experience using Claude Opus 4.6 generates code that would be buggy and the tests would be written agains that buggy code with wrong assumptions that certainly would pass with flying colors. It is only when you look closed you get to know what the hell has happened!

▲ classified 4 days ago | parent | prev | next [-]

> would resort to writing code by hand because that's a very skilled and hardworking tribe they've been doing this all their lives

Shush, don't tell that to the AI coding acolytes.

▲ christkv 4 days ago | parent | prev [-]

It feels like a repeat of the dot com infrastructure buildup that spurred the whole 2005 explosion in affordable hosting and new companies. This will probably leave us massive access to affordable compute in a couple of years.

	▲	raw_anon_1111 4 days ago \| parent [-]
		For power maybe. But the expected lifetime of GPU hardware is 3 years before they fail completely