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LarsDu88 an hour ago | parent | next [-]

This is a fallacy. OpenAI and Anthropic would not continue to make money indefinitely by simply sitting still for the simple fact that their models can easily be distilled by competitors. Their value is contingent on sitting at the top of the leaderboards and staying there such that the marginal value of their AI is better than the mostly Chinese competitors.

And b/c these chinese competitors are open weight, the layer below frontier class AI is totally commoditized.

If there were a recession, the first thing enterprise customers would do is setup Kimi or Deepseek rigs. It would be a race to the bottom and no one would be profitable.

A similar phenomenon happened with rail lines in the 1850s where irrational exuberance led to a massive overbuild of rail lines, followed by a race to the bottom and the bankruptcy of almost all players. In the end, banks ended up absorbing the few companies that survived.

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parliament32 2 hours ago | parent | prev | next [-]

Because they're doing the fancy equivalent of selling $20 bills for $15 and chirping about how high their revenue is. You, me, and everyone else could generate $inf revenue with that strategy, but that doesn't make it a viable business model.

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MBCook an hour ago | parent [-]

Right.

At this point burying money in jars in the back yard and forgetting where some are has a much higher rate of return.

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hparadiz an hour ago | parent [-]

Using Google’s own IPO S-1 / SEC filings:

Year Revenue Net income / loss

1998 Not reported

1999 $220k -$6.076M

2000 $19.108M -$14.690M

Do you guys not know what a loss lead is?

	▲	parliament32 an hour ago \| parent \| next [-]
		I have no doubt there are a handful of positive examples when we ignore the tens of thousands of failed companies along these lines. I have no problem with money-furnaces trading publicly. If people want to invest in those, fantastic, power to them. But they absolutely should not be included in vehicles like pensions and indexes.
	▲	marcosdumay an hour ago \| parent \| prev \| next [-]
		You seem to be ignoring that a loss lead is supposed to lead people into doing something profitable.
	▲	MadxX79 an hour ago \| parent \| prev \| next [-]
		But Google didn't go public until 2004, when they were highly profitable. Every startup goes through a phase where they aren't profitable... For most of of them that ends when they go bankrupt.
	▲	logifail an hour ago \| parent \| prev \| next [-]
		> Do you guys not know what a loss lead is? We don't know which of today's companies will be successful and/or highly-valued in N years' time. Check Cisco's valuation on March 27, 2000; it was briefly the most valuable publically traded company in the world. Almost everyone believed it was worth it. Then it fell 88% over two years. Full disclosure: some of us are old enough to have held stocks during the dot-com boom. Fortunately I was still a student and therefore too poor to have had any significant amount of money to lose :)
	▲	MBCook 35 minutes ago \| parent \| prev [-]
		Survivorship bias. Also, those numbers are multiple orders of magnitude smaller than the AI stuff going on now.

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matthewdgreen 2 hours ago | parent | prev | next [-]

Really depends on the valuation and P/E they plan to list at, and some estimate of their future revenue story. I love Codex and Claude Code but OpenCode/Kimi is wildly cheaper and 90% as good.

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tclancy 2 hours ago | parent | prev | next [-]

Didn't we have a story just yesterday that Anthropic's run-rate now looks like $49 billion/ year and they might have their first quarterly profit? I would suggest if you have billions of dollars coming in the door and aren't breaking even, maybe you do have a small leak somewhere?

	▲	mrweasel an hour ago \| parent [-]
		Part of that potential profitability is reportedly coming the fact that they get a discount on compute from SpaceX in May and June. Anthropic and SpaceX signing a contract where Anthropic leases datacenter capacity for the low low price of $1.25 billion per month, except for the first two month when they get some sort of discount. Anthropics expected profitable quarter just happens to be the quarter were their cost is artificially low?

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alpha_squared 2 hours ago | parent | prev | next [-]

> Because from where I'm sitting it seems like you're just operating on hopes and feels.

I hate these flippant comments. Similarly, from where I'm sitting it seems you're struggling to disentangle revenue from profit.

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hparadiz 2 hours ago | parent [-]

I buy 50 billion of hardware. Make 45 billion back in year 1. My losses are 5 billion. I Pay of all my creditors by year two. Then spend another 55 billion on hardware in the second half of year two. My profit is at this point zero.

By year three I am printing money.

It's not a flippant comment. It's basic math.

	▲	zdragnar an hour ago \| parent \| next [-]
		In year three your competitors invest in making a better model and crush your business because you have no moat at all. The entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get. The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
	▲	zzleeper an hour ago \| parent \| prev \| next [-]
		Sorry that's confusing cash flow with profits, where things get amortized
	▲	rchaud an hour ago \| parent \| prev [-]
		It's not basic math when the numbers are this big. There's not going to be $50 billion coming in Year 3 if there's a market correction and lenders scale back financing. Borrowed money is how companies are paying for AI, and that's the first thing that disappears in a recession.

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43fg 2 hours ago | parent | prev [-]

" But they could just not do anything and continue raking in the money."

Hahaha what a fucking bozo.

Log out and dont talk about valuation again.