I’m not sure it’s a binary thing that contradicts.

I want AI and these companies to succeed. And I especially want new companies to succeed. But I want them to be valued far more realistically. Because if they have to be worth trillions, then there’s a real motivation to do what it takes to realize that valuation. And that’s how you birth a Zuckerberg.

I’m not rooting for them to fail. I’m rooting for the correction to happen sooner than later.

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Eji1700 3 hours ago | parent [-]

> But I want them to be valued far more realistically.

They are. That's the problem. The obligations that these companies are, on paper, supposed to meet require these valuations.

If you value Anthropic at $500b that's still a fuckload and vastly less than their obligations and a lot of people are going to say "well wait a minute how am I going to get paid".

The amount of spend going on, and planned, is insane and underpins a lot of this, and is why people are skeptical of the valuations. It has nothing to do with "Wanting" AI to fail and just a reasonable bet based on the math. For them to pay back what they have on their balance sheet entire continents will functionally be a spec in comparison, and that's really really fucking unlikely to happen.

Doubly so when you consider that there's a question of if they can be profitable to projected needed levels without fundamentally breaking some economics parts, and that this looks a lot like the overbuild of the internet during the dotcom bubble, which was also hideously overvalued at the time, for the time frame they were looking at, despite being THE literal world changing tech.

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npc99 2 hours ago | parent | next [-]

> They are. That's the problem. The obligations that these companies are, on paper, supposed to meet require these valuations.

How does that make sense lol

"it owes a bunch of people money, so it should be worth more"

i don't...

	▲	Eji1700 2 hours ago \| parent [-]
		> "it owes a bunch of people money, so it should be worth more" "it owes a bunch of people money so the only way for it to not be insolvent is it must be worth X, and if we're talking lower than X this is already a problem"

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JumpCrisscross 2 hours ago | parent | prev [-]

> For them to pay back what they have on their balance sheet entire continents will functionally be a spec in comparison

Walk me through this math. I’m seeing $900bn Capex over a decade. That’s $90bn required free cash flow a year, on average. If they can do 25% margins, that requires $360bn annual steady-state revenues. That doesn’t require continent-scale anything.

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Eji1700 2 hours ago | parent | next [-]

> If they can do 25% margins,

This is the assumption we disagree on. They're net negative by an order of magnitude on most of their current customers. I don't see them flipping to break even + 25%.

Further you're assuming they can turn that on today, when they're still very clearly not ready. Every year the timeline gets worse.

Take them to 2% margin with 8 years to go and you're looking at needing 4.5t annual.

This is normally where I'd say "but 2% feels extreme..." and hedge in the middle, but like...the current pricing isn't even close to 25% margin, it's not even close to break even.

	▲	orangecat 36 minutes ago \| parent [-]
		They're net negative by an order of magnitude on most of their current customers. From the S-1, in the first 3 quarters of 2026 their revenue was $33.2B and compute costs were $18.8B. Inference is highly profitable, they "just" need more of it.

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kridsdale1 2 hours ago | parent | prev | next [-]

Those numbers are stupid large for a company whose only moat is never ever being in second place.

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oblio 2 hours ago | parent | prev [-]

> That doesn’t require continent-scale anything.

Wha???

There are 13 companies in <<total>>, on the <<entire planet>>, that make more than that: https://companiesmarketcap.com/largest-companies-by-revenue/

Most of those needed decades to reach this point.

Anthropic has a near-clone in OpenAI (and vice versa). There are multiple smaller competitors, several much cheaper (especially the Chinese models).

Anthropic obviously needs continent-scale balance sheets, I would argue "multiple continent-scale balance sheets", since Google & co make their money by selling everywhere except for China.

Anthropic and OpenAI are never entering China on a massive scale. US relations with Europe are deteriorating and LLMs are <<massive> risks in an adversarial relation so it's not inconceivable Europe at some point starts marginalizing US tech companies, at least LLM labs. I imagine India will want to do something similar at some point.

Where exactly is Anthropic going to make all that steady revenue from, if it can't break out of coding and cybersecurity? Even worse, both those markets are super tech savvy so those cheap rivals are even more dangerous. One slip up the next 5+ years and Anthropic is history.

	▲	seiee an hour ago \| parent [-]
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