Feels like I need to repeat myself more than once a day now: https://news.ycombinator.com/item?id=48697258

> These companies providing tokens, whether SOTA or not, that want to IPO are so fucked as time goes on.

>Can't sell their SOTA models, only slightly better than the open source models for the models they can sell, cost 20x to 50x for good models, a TAM that consists almost solely of developers, with no customer of theirs actually boasting increased profits as a result of AI...

> I fear their time to IPO may have passed.

What on earth could Anthropic and OpenAI Pivot to now?

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khurs 3 minutes ago | parent | next [-]

>I fear their time to IPO may have passed.

They may not get the valuation they want, but as it appears to be on a plateau may be better to offload now?

As per SpaceX, so many big names are involved the media will be controlled to hype it up and the investment banks will forecast 100x revenue in 2 years...

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a34729t 2 hours ago | parent | prev | next [-]

The open models are half the equation. The other half is Apple's hardware, which is likely to see major memory bandwidth improvements over the next 2-3 generations and will be capable of running substantial models locally. By that point the open models will be beyond today's SOTA.

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clusterhacks 9 hours ago | parent | prev | next [-]

I used to agree with you but now do not. I now think the floor for this market is probably no worse than the annual revenue of cell phone plans in the US market. So say, $250 billion.

Now, that probably doesn't justify the valuations and hype being thrown around, but I think it gets at a real revenue number.

I also don't know how that number fits into the funding rounds already raised and VC dreams of IPOs for these two.

This isn't coming from deep analysis on a verifiable source, but I started asking people in my social circle (includes white-collar and blue-collar folks) about their LLM use. The biggest surprise in 2026 for me was that almost all of these people told me about regular (and sometimes sophisticated) use.

A more intriguing observation - I work on the side with high school students and have two college kids of my own. Their LLM usage (and their peers) is much, much lower than expected . . . that's a little counterintuitive given "popular" perceptions I read.

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lelanthran 8 hours ago | parent | next [-]

> I used to agree with you but now do not. I now think the floor for this market is probably no worse than the annual revenue of cell phone plans in the US market. So say, $250 billion.

I don't think we're talking about the same thing. I'm talking about what their IPO is going to do to their share price.

In any case, $250b revenue translates to, best case scenario, $50b profit. On an investment of $1t. It does not look good for those companies making up the $1t investment.

	▲	clusterhacks 8 hours ago \| parent [-]
		Gotcha. I'm past the point of having any confident thoughts about what happens to their share price at IPO. What about the idea that there is a high likelihood that the potential share price for OpenAI and Anthropic are both going to be pretty divorced from a rational market price for either?

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throw310822 2 hours ago | parent | prev [-]

Interesting idea and reasonable number, but cell phones need a lot of infrastructure and they need interconnection. The risk here is that in the future a combination of near-sota open weights models optimised to use as little resources as possible and a reasonable drop in compute price, will make possible for small and tiny providers to compete with Anthropic/ OpenAI or even for people to run their own private models for most applications. Then large, expensive sota models would only be used for research and to answer the small subset of general user queries that need that kind of intelligence.

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9 hours ago | parent | prev | next [-]

[deleted]

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fassssst 9 hours ago | parent | prev | next [-]

> a TAM that consists almost solely of developers

That’s the wrong assumption. These models are good at office docs too.

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lelanthran 8 hours ago | parent | next [-]

> That’s the wrong assumption. These models are good at office docs too.

The cheap models handle that very well. The SOTA models still only have target TAM of developers only.

You only need SOTA for development. The $1t investment is in SOTA companies.

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dgellow 9 hours ago | parent | prev | next [-]

But you can do office docs work with way cheaper models

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airstrike 9 hours ago | parent | prev | next [-]

They're passable at those. And still no moat.

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AndrewKemendo 9 hours ago | parent | prev [-]

I have yet to see a model that can make a consistent and repeatable powerpoint deck that doesn’t need considerable manual revision

Find me someone who is putting raw text in and getting out a usable weekly staff meeting deck that doesn’t require massive revisions

	▲	yggy 6 hours ago \| parent [-]
		I agree but why is that? Let’s face it - without the humans these machines ain’t shit - aka we have mechanically figured out ways to make machines better than us at certain things (on demand memory) but this idea they are intelligent is horse shit. Btw the bar is low too! Most human created decks are garbage. And yet LLM’s don’t even beat those.

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outside1234 9 hours ago | parent | prev [-]

Propaganda? Pay for “facts” to be placed in the model?