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It's pretty clear actually.

Anthropic raises money from IPO -> How long will that sustain them given the immense cash burn? Forget about gross profit - that's the number they want you to focus on and can be played with. Keep the focus on the cashflows -> if a firm runs out of money its over, who cares what your revenues and gross margins are. We are not talking Amazon level loss's which were paltry AND they were able to raise more than enough to keep going for awhile.

Management of firms who pay rent to LLM models need to reign in costs -> they will use a bundle of chinese +american models (this is already happening look at the data) -> affecting revenues, earnings and cash flows of frontier labs. Given the losses in absolute terms, any stunting of the growth rate would be catastrophic for the story re. valuation.

The frontier model story rests on one giant assumption: lay-offs must happen en masse at some point. It's not happening and in my view won't happen - there simply isn't enough trust. Moreover, do you think firms are going to trust these model providers, given its in their interest to steal IP? lol

Not rocket science mate.

Oh so people who recently sign up = throwaway

Interesting. Are you an Anthropic investor?

This is insanely delusional.

Much of humanity doesn’t think at all btw - that’s why they’ll never pay for these products and Google search had to be free.

Furthermore two things could be true a) market for frontier is large b) Anthropic still continues to generate net loss’s

It’s even more sinister.

The vc’s have to be allowed to cash out - so that money remains a strategic weapon for US venture funds over any other nation re. Funding startups in future - esp capital intensive.

The valuation is a joke but they will be allowed to go on and cash out - just like the investors of spacex.

Most here need a finance lesson.

In intrinsic valuation, the value of the operating assets is determined by ebit(1-t) - reinvestment.

Gross profit doesn’t mean a whole lot if a) your operating income is negative b) your reinvestment needs are mega. You have to make some interesting assumptions Re. Anthropic to get a 2T valuation.

I almost have to hold my nose reading finance posts on here.