> No. This is opportunity cost.

It’s not opportunity cost. It would be opportunity cost if their employees not using it would lead to additional revenue. However, if Inwas to go to Anthropic and double my token usage Anthropic wouldn’t decline my money. If Anthropic’s employees would stop using Claude, their revenues wouldn’t increase by an equivalent amount.

Their revenues are not currently supply constrained.

It’s just a cost cost. If their employees stopped using these services they would simply need less infrastructure, and therefore save on the cost to build and run that infrastructure. It wouldn’t translate into an increase in revenue.

> Also, Anthropic is showing that to operate at Anthropic level, you need $300,000 compute spend per employee

They have infinite money to burn so they aren't going to optimize.

I've seen that trivial changes to workflows can token usage by 30%. Repeat this a few times and my token usage has plummeted over the last few months.

Only outputting test failures instead of having agents read test run output in real time. Not having build logs get fed into context. Projects like UCL (unified context layer) so agents don't rediscover the same facts about a code base again and again.

Giving tools agent output modes so they only print out the minimal info needed for an agent to get work done.

When I hear a company has an absurd AI spend I assume they aren't even trying to reign it in.

There is a huge difference between Anthropic and Google dog-fooding: Anthropic does not own or build data centers, they rent (as far as all the reporting on this I've read). Anthropic employees dog-fooding with Claude tools isn't "internal", its most likely being run on external AI data center compute, which they have to pay for, there's just no margin on it. It might even be run out of Google's data centers.

I don't buy it. A company like Anthropic is not going to just walk away from revenue. If external demand were really that high, then they should take the money first. And not just for the revenue; customer demand being that high is also an indication that the product is already great as-is so they stand to improve their bottom line by easing off on the R&D spend.

It depends on your assumptions. When Google is in "space crunch" mode, there are opportunity costs. Otherwise, there aren't, because you could do both.

You could also look at the opportunity cost of not letting Deepmind do quite as much research. How much is additional research worth on the margin? There will be diminishing returns.

So every business should measure any client fungible resource that way? Should a bank put a revenue number to any capital held in excess of regulatory requirements, for example?

They also offer $300,000 in compute spend (allegedly) for $200 a month to anyone who isn't employed by a large corporation so their pricing should be taken with a grain of salt.

> Anthropic is showing that to operate at Anthropic level, you need $300,000 compute spend per employee

You have confused necessary and sufficient.

> No. This is opportunity cost.

This is NOT the definition of opportunity cost. Please do not throw in random terms you don't understand. Opportunity cost is the value of the next best alternative you give up whenever you make a choice. WTF does it have to do with mis-classifying an expense?

> So, every compute Deepmind and Googlers get is lost revenue opportunity and must be measured as such

Maybe, but it also reduces supply that can drive up prices

> Also, Anthropic is showing that to operate at Anthropic level, you need $300,000 compute spend per employee

There are a bunch of open source harnesses that are competitive with CC and they aren't using anywhere near that many tokens to do it.

Not really- since they have an internal view of low and high usage times of the day, they can optimize differently.

Even within a single moment, if there is capacity for an internal request, just send it, if market traffic is currently at 100%, don't.

By 'operate at Anthropic level', you mean terrible reliability and availability, and terrible efficiency right?

If it were opportunity cost, that would imply that Anthropic can't sell as many tokens as people want to buy. But as far as I can tell, there aren't any "token shortages," at least at API prices. Or is there a maximum per-customer limit that I'm not aware of?

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Not an apt comparison. You are conflating the opex of the company with taxable benefits.

If what you said was how taxation worked, a hand tool manufactuting company giving hammers they make for $1 and retailing for $2 to workers building a shed on their property would be increasing the workers' income tax bill by $2. Of course, in reality the workers get no income tax bill on the hammer given to them for work and the company can get a $1 tax writeoff from the opex of making the hammer.

What's is the 'retail cost'? Because nobody (except total idiots) is actually paying their published API pricing.

Not true. Azure has a very different internal pricing. You can often get a glimpse of it if you have a.. particularly enterprising TAM. What happens sometimes (Like now when compute/GPUs are in high demand) is finance department would calculate the opportunity cost on allocating those resources internally vs selling them externally. The calculation isn't even always straight forward. What is the opportunity cost of using compute for internal CI or company operations vs selling them externally? It's not a straightforward equation and you would have to adjust the scale often depending on how clogged your internal processes get.

The extremely discounted internal cost promote waste, so there is always a room for improving efficiency, but that too has a cost.

>means you are now paying more for AI than you are employees.

Yea, isn't the entire point of RSI to replace your employees altogether? So you'd spend an infinite amount more on AI than employees in that theoretical.

Like, if you were in an energy generation business spending way more on fuel and capital expenditures is way better than having zillions of employees earning checks , it would be a sign of efficiency.

Anthropic's use of AI in no way translates or represents any other companies' use of AI, so your apparent extrapolation makes no sense.