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Why Wall Street is ignoring big tech's debt [video]

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Re: Why Wall Street is ignoring big tech's debt [video]

#111

Post by WarmWash »

stackskipton wrote: post #99
tristanj wrote: post #97

Earlier quoted context omitted.

Yes, actually. Anthropic has gross margins of 40%+, hit $75B ARR last month, and (as of this quarter) is profitable.

As Ed Zitron pointed out, that "quarter" of profitability is EBITDA profitability and comes with plenty of creative accounting. When they do it for a year, we can say "They have found profitability"

This[1][2] Ed Zitron, or another one?

Because I don't know how you can be so totally and completely wrong for so many years, and still have people lend you credibility. But I definitely do understand how you can rage farm subscription dollars from suckers for years.

[1]https://www.wheresyoured.at/bubble-trouble/

[2]https://www.wheresyoured.at/to-serve-altman/

Re: Why Wall Street is ignoring big tech's debt [video]

#112

Post by jrflo »

oblio wrote: post #72
jrflo wrote: post #61

Earlier quoted context omitted.

But AI use translates directly to time savings (if it works). You only need 1-2 hours of time savings per employee per week to break even on a $100/seat/month subscription.

In the US. With how much they've invested in AI they need the entire planet to pay, and pay lots. What's the capex expenditure of Magnificent 7 just this year? Close to $1tn?

Yeah, they may be over built for sure, I'm just saying the demand is there.

Re: Why Wall Street is ignoring big tech's debt [video]

#113

Post by stackbutterflow »

TrackerFF wrote: post #16
WarmWash wrote: post #9

I don't know a single white collar worker who isn't using AI for their job. Not like forced, but like "Oh damn, this bot thing can do a lot of tedious leg work for me". To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use. If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bu…

But the question is how much are people willing to pay for AI. I use AI every day at work, but I only pay $20. That's the most I will ever want to pay. And, so far, it gives me everything I need. If OpenAI or Anthropic suddenly said "Sorry, the game is up. You'll have to pay $100/month now", I would 100% look into cheaper Chinese solutions. I suspect the AI subscription (or API) economy is whale economy. You have a s…

To put it into perspective if we consider that US salaries are 3 to 5 times those of other "rich" countries then it's already a 60 to 100 dollar subscription for the next richest part of the world.

Re: Why Wall Street is ignoring big tech's debt [video]

#114

Post by thisisit »

porridgeraisin wrote: post #36
TrackerFF wrote: post #16

Earlier quoted context omitted.

But the question is how much are people willing to pay for AI. I use AI every day at work, but I only pay $20. That's the most I will ever want to pay. And, so far, it gives me everything I need. If OpenAI or Anthropic suddenly said "Sorry, the game is up. You'll have to pay $100/month now", I would 100% look into cheaper Chinese solutions. I suspect the AI subscription (or API) economy is whale economy. You have a s…

> Even adding something like $20 - $100 subscriptions to every user is a serious enough financial obligation that it needs to go through budget planning / boards I doubt that. In my tiny town in India, office workers use the 1800 INR (20$) plans. 1800 INR/month is like... 4% of the salary these guys get. And since this is mostly MS-office and windows explorer and chrome based stuff in very small, non-tech companies,…

First I'd like to understand what are these "small" non-tech companies in tiny towns 45k to its employees? The last labor survey had average Indian salary pegged at 21k.

> it pays for itself in literally a day

Most comments in the thread say this but don't explain the how. How does it pay for itself "literally" in a day? Through productivity/time savings? How exactly?

I can only assume people are talking about productivity gains. Have their been reports of increased productivity or layoffs in tiny town, small non-tech companies in India that I am unaware of? What is the source here? Without a concrete source this is mostly anecdotal evidence and not backed by data.

Today there is novelty factor of AI. Questions or tasks which required people to really plan out now can be tested through AI quickly. To many people that seems like progress and that AI is paying itself. But most of it is busy work and isn't adding value to the companies. Given that everyone is on the AI hype train they might not be looking at the expenses closely. With time they will start poring it over and cancelling contracts en-masse.

Re: Why Wall Street is ignoring big tech's debt [video]

#115

Post by InsideOutSanta »

WarmWash wrote: post #9

I don't know a single white collar worker who isn't using AI for their job. Not like forced, but like "Oh damn, this bot thing can do a lot of tedious leg work for me". To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use. If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bu…

The question is not whether LLMs have value; the question is who will earn how much money off them. I don't see any scenario where the companies that put hundreds of billions into their models make that money back.

Re: Why Wall Street is ignoring big tech's debt [video]

#116

Post by InsideOutSanta »

tristanj wrote: post #106
stackskipton wrote: post #99

Earlier quoted context omitted.

As Ed Zitron pointed out, that "quarter" of profitability is EBITDA profitability and comes with plenty of creative accounting. When they do it for a year, we can say "They have found profitability"

Why are you citing old news? Zitron wrote that months ago when Anthropic was reported to have ~30B ARR. Anthropic now has more than double that, at even higher margins. There's no doubt at this point that Anthropic is profitable.

If they were profitable, they'd release real numbers and announce concrete plans for an IPO. They are very obviously not profitable; they just announced a $65B Series H two months ago.

They're almost literally setting money on fire.

Re: Why Wall Street is ignoring big tech's debt [video]

#117

Post by InsideOutSanta »

busyant wrote: post #101
borzi wrote: post #21

Earlier quoted context omitted.

The reason uber didn't loose that much business is because it replaced the established businesses and left most consumers with little alternative. That's not the case with AI - unless the frontier labs achieve AGI or some sort of super intelligence that lets them create infinite economic value (at which point, any further discussion is pointless for obvious reasons), the average worker can do most of their tasks with…

> the average worker can do most of their tasks with 5% of the api costs using an open source model from China and achieve the same results. Are you also going to tell me that everyone will be switching to their favorite Linux desktop distribution over Mac & Win because it's "free"?

We're talking about corporations here. Of course they use Linux, and of course they'll provide their employees access to the LLMs that cost half the price and are 90% as good.

Re: Why Wall Street is ignoring big tech's debt [video]

#118

Post by globular-toast »

WarmWash wrote: post #9

I don't know a single white collar worker who isn't using AI for their job. Not like forced, but like "Oh damn, this bot thing can do a lot of tedious leg work for me". To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use. If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bu…

Pays for itself how? Customers don't care if a business saved time on bullshit paperwork. It needs to actually convert to increased competetiveness which leads to increased profit to pay for itself. But if everyone is doing it anyway businesses will quickly realise they're just paying an AI tax and look for ways to eliminate it. Maybe by just not doing the bullshit they got AI to do.

Re: Why Wall Street is ignoring big tech's debt [video]

#120

Post by oblio »

jrflo wrote: post #112
oblio wrote: post #72

Earlier quoted context omitted.

In the US. With how much they've invested in AI they need the entire planet to pay, and pay lots. What's the capex expenditure of Magnificent 7 just this year? Close to $1tn?

Yeah, they may be over built for sure, I'm just saying the demand is there.

Demand for the internet was there but it still took 10+ years and a big economic crash to get there.
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