> The idea of removing model training from your costs is a little wild tbh.

Yeah, I didn't believe they'd claim something like that. But yes indeed, from the article:

> Anthropic's gross margins are above 80% before accounting for revenue shared with distribution partners, including Amazon (AMZN.O), opens new tab, and the cost of training its model,

Is this how all AI companies calculate if they're profitable or not, by removing the highest costs? What a circus.

> The profitability of being able to serve a query wasn't really under question

In one sense, yes, but I do see people question it regularly.

I think part of the big push to "slow down AI development" is to add some sort of regulatory pressure that will give them sort cover to train less models and slow their burn rates

I didn't realize how much money Uber makes from ads.... Why does every business devolve into an ad platform?

> idea of removing model training from your costs is a little wild tbh

It's one of several metrics and tries to estimate steady-state profitability. It's the only one being leaked because it's the most sensational one. But don't assume cash-flow profitability is negative just because you don't know it.

> The profitability of being able to serve a query wasn't really under question (nor is the margin expected to be anything less than 80%+) I think.

HN had long debates about whether AI inference could even be affordable from a compute perspective.

Well then you haven't listened to Ed Zitron or any of the other AI bubble doomers. His contention is that its worthless and they lose money on every query.

Profitable without Capex, i.e. gross margin. Inference is included in COGS. Capex (training) is not. That's reasonable.

Is that basically: We'd be making money, if we didn't have to build the product?

Turns out building houses is super profitable once you remove the cost of building materials, labor, and land.

non GAAP. If they were GAAP profitable they either wouldn't be sharing or would be IPOing already.

The “opens new tab” sometimes drives me insane when using TTS to listen to Reuters articles. I’m assuming they are using the wrong CSS/markup for the purpose.

Well fortunately now we're gonna be Pacing the Frontier.

>This is reportedly a sort of "Enron" accounting which excludes some really big expenses like revenue sharing, the cost of model training and hardware deploymments

source? this seems false. reportedly the adjusted profitability includes inference and amortized training costs

It's really easy to be profitable when you exclude all of your expenses

That's a bit hyperbolic. It's closer to using EBITDA as your "earnings" and bucketing model costs in a rapid depreciation model (which is fair, I'd assume a model is good for more than just 1 year...

More similar to if they took out the cost to design the cars and all the many levels of corporate overhead they have in the form of middle management.