simianwords

It’s not clear what your argument is.

It’s more or less certain that Anthropic is already profitable if you discount the losses due to becoming too valuable.

What you are saying here

> The CapEx spend for AI not only makes AI itself more expensive (and thus less profitable),

There’s nothing inherently unique about this. It’s just supply and demand - the only problem is that the ecosystem of raw materials can’t keep up with the demand. It will catch up soon and the prices will stabilise.

Your only problem seems to be this aspect only: that RAM production hasn’t increased according to demand.

No I don’t agree they should slow down. I think RAM and other things should rather speed up to react appropriately to the demand.

It’s like saying the iPhone is not profitable because too many people want it and its price is going up.

I tried to give this article an honest read but

> Last year, for instance, Anthropic lost $80 billion, and Amazon had negative $42 billion free cash flow. The entire big tech complex, it seems, has moved from minting cash to burning it. And investors are, well, not panicking exactly, but wondering if the bubble is ending

Is this really the quality of such newsletters? I’m not asking rhetorically because I’d like to also have trustable sources to understand the underlying reality. I actually spent time understanding this part and the 80B dollar loss thing is completely misrepresented here (also went viral in other media).

The filing showed that it was profitable. The biggest expenses were because the stock valuation of Anthropic went really high.

I asked this to ChatGPT “if anthropics valuation didn’t rise and stayed at 200B what would their profit be on q2”

The answer is around 1B of profit.

I think this is incorrect logic. OpenAI’s valuation doesn’t come from the sum of other tech company’s valuation.

You do know that all valuations can go up together right? It’s not zero sum. OpenAI can create trillions in value not by taking it from somewhere but by creating it from nothing.

At the risk of goomba fallacy

1. Guys so AI is a bubble but that doesn’t mean it’s not useful, just like dot com bubble

2. “Someone would have to see value in that. Right now the value prop of AI is that maybe someday it'll get better and we'll be able to build useful, profitable consumer products on it”

Calling OpenAI and Anthropic a pyramid scheme is absurd

In other contexts people would ask me not to cherry pick extreme statements like “OpenAI and Anthropic will go away”. So I don’t have to cherry pick. I just have to pick what you said.

According to your argument, OpenAI should simply stop R and D which can result in massive jumps in performance because China may catch up?

What is your prescription if I may ask? Don’t invest in research? Let China do it?

This is a horrible article written by someone clearly upset about the state of things to process it objectively.

Please refute this argument: how can you expect 100% accuracy when your input is natural language which is fuzzy by definition?

I think you are overcorrecting. LOC is highly correlated with productive output. I’m willing to bet on it.

Over last 3 years on HN I have seen such low quality comments : prophesizing the end of times - the bubble will burst and we will all be so happy after that.

Any tiny news article that indicates even a modicum of challenges for OpenAI will be met with slurry of such comments.

Perhaps it’s good to keep a good epistemic hygiene in all this. OpenAI isn’t going away anywhere soon. AI isn’t going away, in fact we haven’t even started yet.

The article clearly counts AI as big tech. It’s clear you didn’t even read it..

What would that look like in an example? A SaaS company selling its services to other agents in another company that uses that SaaS?

I can’t imagine AI making sales by itself

It’s literally not true though. Big tech built AI which is probably the most important technology since internet

There’s this popular misconception that companies only chase stock valuation but it doesn’t look true.