I don't know about SEC rules but the anthropic CEO said they have a 50%+ margin on API pricing.

stackskipton 3 hours ago | parent | next [-]

SEC rules means CEO cannot lie or deliberately hide the cost of something.

50%+ Margin statements have basically been "We are making 50% on delivering it." This does not include ANY of the costs of getting to this point, training, scraping, datacenters, people and so forth.

They are basically saying "Oh yea, the cost of GAS in the car is only X so charging Y per mile is great margin" while ignoring maintenance, cost of acquiring the car and so forth.

	▲	postflopclarity an hour ago \| parent [-]
		but comparing your margin of charging to drive a mile to the price of gas makes a lot of sense? that is the only variable cost in the equation. training / scraping / people are all pretty much fixed costs.

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SlinkyOnStairs 2 hours ago | parent | prev [-]

I'm going to be a dickhead for a moment here, apologies, there's no way to say this that isn't rude to you. This is still the same hearsay "In an interview, somewhere."

A bit of google searching later can get us a specific interview. https://www.dwarkesh.com/p/dario-amodei-2

> Let’s say half of your compute is for training and half of your compute is for inference. The inference has some gross margin that’s more than 50%.

But the context, the very previous sentence is:

> Think about it this way. Again, these are stylized facts. These numbers are not exact. I’m just trying to make a toy model here.

Here, Amodei is in effect using weasel words. He is not giving any actionable claims about Anthropics margins, merely plucking an arbitrary number. Why 50%? Is 50% reasonable? Is 50% accurate to the company? Those are all conclusions the listener draws, not Amodei.

> I don't know about SEC rules

The main premise is that, as a CEO, there are some regulations you are beholden to. You're not allowed to announce you've made a trillion dollar profit, sell all your stock, and then go "teehee just kidding". The SEC prosecute you for securities fraud if you do that stuff.

This makes such weasel words as earlier suspicious. Because the exact statement Amodei gives is not prosecutable. He's not saying anything about the company, just doing a little "toy model".

The degree to which it is intentional that this hearsay travels and is extrapolated from "Well he picked 50% because it's a reasonable figure, and because he's CEO, a reasonable figure would have to be a figure akin to what his company can achieve" into "Anthropic has 50% margin", that's up for debate. Maybe it is intentional, maybe Amodei is exactly the same kind of shitweasel as Altman is. Probably he's just a dumbass who runs his mouth in interviews and for whatever reason cannot issue the true number in an authoritative statement to dismiss this misconception.

Hence my original comment; If the real number were better than the hearsay rumours of the number, Amodei would immediately issue a correction; It'd be great for the company. Hell, even if 50% were about the margin, that'd be great! To promote that from mere hearsay to "we're profitable, go invest all your money" would also be huge. Really, any kind of margin at all would put him ahead of OpenAI.

But he doesn't issue a correction. He doesn't affirm the statement. Perhaps he has other reasons for that, but a rather big reason could be that the margin number is in fact pretty bad.

Now, the observant reader will note I am also using a weasel word there. I do not know whether the number is good or bad, your take away should be "it could be bad." Not "it is bad". Go pressure Amodei into giving us the real number.

	▲	dminik 2 hours ago \| parent \| next [-]
		Interesting. So the 50%+ number that's been floating about isn't even real. It's just an example.
	▲	SlinkyOnStairs 2 hours ago \| parent \| prev [-]
		Self reply as I could've explained the SEC thing better: Anti-fraud regulators like the SEC give an inherent trustworthiness and credibility to CEOs and other market participants. You can trust that they're not lying to you, because they would be sent to jail if they were. Another example are general anti-fraud regulations; Consider how one would trust North American or European steel suppliers more than Chinese steel suppliers. It's not that the Chinese are "evil lying people" and Americans are "saints who never lie", it's that you can trust American, Canadian, and European courts to hold the liars accountable by regulations even if you're not in any of those regions. But the Chinese liars won't be held accountable by regulations. Thus also the opposite, if someone opts out of this credibility granted to them by anti-fraud regulations, their words may not be quite so truthful.