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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]

#121

Post by jmathai »

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…

I avoid subscriptions like the plague and I was getting enough value from Claude that I was paying for the Max plan for a couple months. I don't know how much Anthropic needs to make to be sustainable but I think it's worth north of $50 or $100 per month for many knowledge workers.

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

#122

Post by inigyou »

watwut wrote: post #81
inigyou wrote: post #48

Earlier quoted context omitted.

The railway bubble and the optical fiber bubble left the world with lots of railways and optical fibers. Once their original owners went bankrupt, the assets themselves were quite useful and changed the world. The cryptocurrency bubble, however, didn't. Not really. At best you can use it to buy drugs. Some of the GPUs may have been repurposed for AI, but not enough to make a dent in AI, and the AI reesarchers who kic…

Many of those assets were useless - like railways from nowhere to nowhere. Only some ended up being used. And many innocent people ended up being hurt in the process. Bubbles are not good. They are harmful. The ability yo recoup some of the losses in the span of next 15 years does not make the bubbles something positive.

Even railways from nowhere to nowhere often ended up being useful when the ends were extended to somewhere or when somewhere grew to encompass nowhere.

For example the Berlin Ringbahn was once some billionaire's toy but now it serves very useful traffic, as Berlin grew outwards to where the Ringbahn is.

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

#123

Post by pulse7 »

dexterdog wrote: post #102
spwa4 wrote: post #100

Earlier quoted context omitted.

M1 is finishing it's 6th year of life and going strong ...

Have you been trashing the non-replaceabe SSD with constant AI workloads? Do you have any idea how much electricity it uses over it those 4 years?

You cannot wear out an SSD through AI inference alone. LLM weights are only read from the SSD, and read operations do not contribute to SSD wear. SSD wear is primarily caused by write and erase operations.

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

#124

Post by tristanj »

InsideOutSanta wrote: post #116
tristanj wrote: post #106

Earlier quoted context omitted.

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.

Utterly false -- review the numbers yourself

https://www.wsj.com/tech/ai/mind-blowing-growth-is-about-to-...

https://newsletter.semianalysis.com/p/anthropic-3q26-profit-...

The company was profitable in Q2 and is projected to exceed $1B in profit in Q3.

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

#125

Post by carlosjobim »

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…

> But the question is how much are people willing to pay for AI.

That depends on how much more money they can make with AI or save with AI. It shouldn't be very hard to know that number in a well run business. Even for a one man business.

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

#126

Post by bsder »

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…

> To think that people won't pay $60-$80/mo to continue using it is wild to me.

I'm fine paying $200 per month. Companies seem to be fine at $2000 per month but I would balk at that. Companies are already balking at $20,000 per month.

So, we KNOW what the numbers are. If corporations are only willing to pay $2000 per month per developer for all the developers in the US, the amount of VC investment already exceeds what they can get back from 10 years of revenue.

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

#127

Post by stackskipton »

tristanj wrote: post #124
InsideOutSanta wrote: post #116

Earlier quoted context omitted.

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.

Utterly false -- review the numbers yourself https://www.wsj.com/tech/ai/mind-blowing-growth-is-about-to-... https://newsletter.semianalysis.com/p/anthropic-3q26-profit-... The company was profitable in Q2 and is projected to exceed $1B in profit in Q3.

I can't read the first article 100% but it's linked here: https://www.wheresyoured.at/anthropics-profitability-swindle... which I noted in my original post seems to be full of juiced numbers.

Second link talks about revenue and operating costs. Again, it's very possible that Anthropic is profitable as I hinted looking at pure revenue vs operating costs. That's like saying your delivery service is profitable because you are only looking at the cost of drivers + gas and ignoring maintenance, car purchases and building of garages to get you to that point.

Again, the poster you replied to is right. If they are extremely profitable, the logical thing is file S-1 publicly and IPO. The fact they haven't done so is interesting.

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

#128

Post by carlosjobim »

rdedev wrote: post #69
porridgeraisin wrote: post #55

Earlier quoted context omitted.

It is not going to go away. Rather they have doubled down and opened 399 INR/mo (4$/mo) plans that as of late have GPT 5.6 Luna. The reason this works is that you get lesser inference time compute used for queries on these cheaper plans which makes it sustainable and this is enough for the tasks these guys do. And some local telcos are bundling this subscription as well, so most people just get it for "free". For exa…

These companies have spent billions of investor dollars and they will need to recoup that cost soon. And then show year over year growth on top of that. Unless they can massively scale down training and inference cost or implement AGI I don't know what their plan is. Just provide a subsidized plan for the next 10 or 20 years? Their costs are directly proportional to the amount of tokens the LLM produces. How is a mon…

> These companies have spent billions of investor dollars and they will need to recoup that cost soon. And then show year over year growth on top of that.

Or else?

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

#129

Post by carlosjobim »

acivitillo wrote: post #14
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…

$80 per month in a 5,000 people Enterprise is 400k per month which translates to ~5m per year. That is easily in the 8-16% of their total IT budget. I don’t know you, but companies don’t like to increase recurring cost. Is AI good? Yes. Is it clear how it generates enough ROI to justify a material IT cost increase? No. This is the problem now, not how much white collar workers use AI, but what is the productivity nar…

> Is it clear how it generates enough ROI to justify a material IT cost increase?

It's probably crystal clear for the people making those decisions.

There is also a very clear specialized use case, which is translation.

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

#130

Post by _aavaa_ »

rdedev wrote: post #43
porridgeraisin wrote: post #36

Earlier quoted context omitted.

> 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,…

Remember that 20$ is a subsidized rate openai is currently willing to provide. Once that goes down you think these guys would be willing to pay token based billing charges ?

subsidized versus API pricing sure, but do we have concrete proof of how much it is subsidized versus the breakeven inference costs of those tokens?
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