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crystaln an hour ago

[flagged]

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dang an hour ago | parent | next [-]

Ok, but please don't post unsubstantive comments to Hacker News.

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impossiblefork an hour ago | parent | prev | next [-]

Yeah, i calculated something like that earlier.

But with a 2T valuation-- if they did raise, let's say, 300B, that's a 15% float, maybe they'd have a chance.

518 B in future compute obligations for the coming decade. 300 B, then 218 B is left. That's 13x their current revenue, not too far from 10x their current revenue.

Perhaps they could survive if they raised 300B. With that they'd only need to increase revenue a little bit, and that's probably possible, what with inflation and all.

The big problem is if there's improvements in AI accelerators that aren't going to be be bought by the companies that the people to whom Anthropic have obligations are likely to buy from. So if Google, AWS or NVIDIA end up not being the leaders in tokens/$, then Anthropic are screwed.

I'm not sure how the total picture ends up if one adds OpenAI to the picture.

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als0 an hour ago | parent | prev | next [-]

Why? Do you think frontier AI will never generate enough profit to justify its costs? The market seems to move on vibes rather than logic. I can imagine one of those company failing and the other seizing the market.

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freecodeio an hour ago | parent | next [-]

while what you say is true, trillions of dollars and thousands of people invested in something that ultimately leads to a few companies from china doing the same 10x cheaper is a vibe that can go so far

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lenerdenator an hour ago | parent [-]

I know that there are a few regulated industries that will go out of their way to not have any prod data ever exposed outside of the United States.

"China can do it cheaper" applies well to your personal projects. It doesn't apply well when you handle things like trade secrets, healthcare, or financial data.

	▲	stymaar 29 minutes ago \| parent \| next [-]
		> It doesn't apply well when you handle things like trade secrets, healthcare, or financial data. OpneAI stole valuable secrets from their customers Buckmaster and Alpöge, why should a company expect them not to do the same with their trade secrets?
	▲	redanddead 39 minutes ago \| parent \| prev \| next [-]
		I promise you China can do it cheaper is good enough for many corporates that have neutral views at best on the labs These are open models, go speak to corporates see what they’re up to Also the healthcare bit is funny. Go ask the healthcare bigs and their intermediates what they’re doing today, hint it’s India American corporates have zero loyalty to America or Americans, and they love bypassing laws, attempting regulatory capture on American corps is braindead and shows a weak hand, as they speak all this bluster about 2-3T valuations for an easily reproducible technology
	▲	freecodeio 34 minutes ago \| parent \| prev [-]
		huh? assuming you're in america right now, the device you're using to publish that comment has been built in china or had most of it's components anyways, which are from some very trade secret-sensitive companies

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InsideOutSanta an hour ago | parent | prev | next [-]

> Do you think frontier AI will never generate enough profit to justify its costs?

I don't know, but I'm not sure it matters. Anthropic and OpenAI still have such large market shares only because their services are heavily subsidized. This can't go on forever.

At some point, they will have to stop burning investor money and start hiking prices. At that point, all of their competitors will look even better than they do now. So I don't see how these two companies in particular can generate enough profit to justify their costs.

	▲	2tttt an hour ago \| parent [-]
		Correct and before some idiot comes in and says ‘high gross profit margin’ Yeah shut up idiot - they need to raise prices to cover operating expenditures and reinvestment that stays inline with the valuation. If it implodes they’ll have trouble raising money later and they’ll need to lay off people - aka on bad terms.

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iAMkenough 43 minutes ago | parent | prev [-]

They and their partners can’t pay off the debt to buy top-of-the-line inference hardware before it becomes obsolete and requires more debt to buy the next generation of top-of-the-line inference hardware.

This cycle will continue every 3-5 years. Given the supply for this hardware can’t keep up with the demand, they’ll be expected to pay more with each cycle.

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downrightmike an hour ago | parent | prev [-]

There is no moat

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DennisP an hour ago | parent | next [-]

Contrary to popular belief, plenty of long-term profitable businesses have no moat. It's just that if you use Warren Buffett's investment strategy and want to buy stocks to keep for decades, companies with moats are the surest way of doing that.

	▲	2tttt 43 minutes ago \| parent [-]
		Excess returns. Heard of it? No? Shut up then. You have no idea what you’re talking about.

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krona 26 minutes ago | parent | prev [-]

or network effects, or intangible assets (e.g. a brand, patents) or even economies of scale which they own and can leverage.