| ▲ | bagacrap 3 hours ago |
| Anthropic didn't lose $80B. Some complex securities tied to their stock went up in value by $72B, which they have to count as a loss, even though it's not cash out the door. As far as Google's mark to market profit on Anthropic shares, everyone realizes that's not a sustainable source of income. Which is probably one reason why it's trading at about 15 times profits. If you back out the $99B of (unrealized) equity gains in anthropic and others, Google is trading at 25 times the last 12m earnings. |
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| ▲ | DennisP 3 hours ago | parent | next [-] |
| People should really look at cash flow statements instead of just earnings. Anthropic published one and their cash flow was positive for the first half of this year. That doesn't mean all the circular financing won't be a problem, but people keep drawing the wrong conclusions from the negative earnings, which are relevant to investors but not so much to the viability of the business. |
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| ▲ | Spartan-S63 2 hours ago | parent | next [-] | | Wasn’t that also influenced by their discounted compute with SpaceX? I was under the impression the cash flow positive news was highly dependent on a lot of limited-time discounting that wouldn’t last. | |
| ▲ | ac29 2 hours ago | parent | prev | next [-] | | The data published in their S1 says they took a $693M operational loss in the first half of this year. | | |
| ▲ | barrkel 28 minutes ago | parent [-] | | That is from the increase in the share price, because they owe that in shares and the share price is higher now. On the other side is the IPO, it balances the books but it doesn't count as an asset today, whereas the promised shares count as a debt today. They are cash flow positive, $3.4 billion in H1. That means they're making money. |
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| ▲ | smallnix 2 hours ago | parent | prev | next [-] | | Re: positive Cashflow Was that the one where they removed a bunch of big positions to make it positive (was it training cost, I forgot)? | |
| ▲ | bagacrap 3 hours ago | parent | prev | next [-] | | What I don't understand about the circular financing is how does it not violate antitrust? All these supposed rivals own huge stakes in each other. Are they really competitors? | | |
| ▲ | mapt 2 hours ago | parent | next [-] | | Zaibatsu - Clearly antitrust. Keiretsu - perfectly acceptable business relationship preferences that in no way require governments to regulate their GDP growth / campaign donation black box machine. | |
| ▲ | trollbridge 2 hours ago | parent | prev | next [-] | | The entire economy relies on circular flows. That’s why we look at something called “net profit”. | | | |
| ▲ | thewhitetulip 2 hours ago | parent | prev [-] | | Well rules stopped mattering to BigCo many hears ago | | |
| ▲ | spwa4 2 hours ago | parent [-] | | Strange how you complain about this for circular flows when of course the GOAT of circular flows is the money system itself govt prints money (FED) -> government -> banks -> (economy) -> tax -> government And the second "great circle" govt loans money (FED) (money that doesn't exist, which isn't a problem if you can print money) -> banks -> (economy) -> loan repayment -> money gets "unprinted"/destroyed Everything about the economy is a great circle. You will also understand after a while, if you wish for the economy to remain stable, this must be the case. You can't change it without either hyperinflation and extreme "capital flight" (between quotes because of course in that circumstances capital will run into gold or other physical resources), by either vastly overheating or stopping the economy. And yes, most instances are of the overheating kind. The only case of stopping the economy was accidental (despite many warnings), in other words, yes, it was Republicans. But last time that happened, even republicans could decide to change course. Of course, only once huge damage was done. | | |
| ▲ | randbyte 2 hours ago | parent | next [-] | | Way more people complain about this too, if you pay attention to all the US inflation and national debt anxieties. It’s clearly unsustainable and driving interest rates up steadily. | | |
| ▲ | mpyne 2 hours ago | parent [-] | | People complain about the imbalance between economy supply and economy demand leading to inflation and debt concerns. The complaint isn’t that the economy is “circular”, how else could it work with 3 or more people engaged in commerce? Neither of those things get fixed on different ways to manage the money supply either, it’s not as if they didn’t have national debts or inflation while on the gold standard. |
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| ▲ | samiv 2 hours ago | parent | prev [-] | | Government doesn't print money. FED is a private institution. | | |
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| ▲ | cyanydeez 2 hours ago | parent | prev [-] | | people should look at dividends rather than anything else; but the people who matter at these scales are just dick measuring and don't care about anything to do with the actual economics of the system. |
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| ▲ | peri-cl an hour ago | parent | prev | next [-] |
| They're not really "complex securities"; they're just convertible bonds. The lender gets to choose if they want to be paid back (1) in a fixed note value (like a bond), or (2) with shares of the company (like equity)—if it IPO's. (I.e., the value is the max() of the two. ReLU-shaped). https://en.wikipedia.org/wiki/Convertible_bond I don't understand the accounting aspects, and they seemed very weird to me, when I tried to read about was happening with Anthropic. Basically: the rules says the convertible debt has to be valued at the predicted IPO price—because that's the value of the thing (Anthropic stock) Anthropic will be obligated to pay. At the point they re-calculated this debt, the valuation went up drastically, so the rules say that counts as a very large quarterly "loss". But: on the other side of the scale, the increase in predicted IPO price does not count as a quarterly "profit"—even though they should cancel out. Even though the increase in share price exactly cancels the size of the debt they're paying back—the debt denominated as a fixed number of shares. |
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| ▲ | steveBK123 an hour ago | parent | prev | next [-] |
| Well they can’t have it both ways on the accounting front. These complex securities they took a mark on only exist as a way for them to access compute at deep deep discount by issuing suppliers lottery tickets. Post IPO when they don’t have lottery tickets to issue as easily the numbers should be interesting. |
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| ▲ | cloudbonsai an hour ago | parent | prev [-] |
| This is correct. Out of the $80.7B loss, $72.4B was due to changes in the fair value of their convertible notes (and similar financial arrangements). Going a bit meta, I'm curious why we don't observe a faster convergence of opinions here. I assume that HN users are well-versed in AI tech, and the current generation of LLMs will happily break down the relevant information in Form S-1. Nevertheless, we see a chaotic storm of opinions, with wildly varying S/N ratios. Is it a limit of current LLMs, or is the bottleneck perhaps human nature? |
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| ▲ | steveBK123 an hour ago | parent | next [-] | | Yes but those convertible notes only exist to grant them access to compute they would otherwise need to pay fair market value for. If I drive a taxi making $200/day and need $150/day of gas.. but convince Shell to take a convertible note instead of $150.. Do I make a) $200/day profit, b) $50/day profit, or c) $200/day - (change_in_value[convertible_note]) in profit? Some are arguing that C is somehow fake, but its obviously more real than A! | |
| ▲ | barrkel 26 minutes ago | parent | prev | next [-] | | People are emotionally invested in a deflation and slowdown in AI because they feel threatened by AI. They'll cling to reeds of hope and wilfully misread financial stats to make themselves feel better. | |
| ▲ | solyin 43 minutes ago | parent | prev [-] | | Human nature. Obviously we know some things are just true. It's common sense! Why would I invite a non-deterministic hallucination machine that can't think to challenge my world view with something inconvenient like facts? |
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