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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]

#161

Post by jurgenburgen »

amluto wrote: post #133
cm2187 wrote: post #71

Earlier quoted context omitted.

The video quotes sales of $2.5 trillion a year to payoff those investments. What workforce you divide it by is a bit up in the air, but let's use 500 millions, which is basically 100% of the workforce of US + Europe + some change. That gives you around $500 a month per employee (from hedge fund manager to flipping burgers at McDonald's). And there will be competition. I see zero moat right now. The user specific part…

Speaking of user experience: OpenAI has some pretty cool tools, some of which even have decent UX. But I’m amazed that anyone can get real work done with the first party web UI. It is UNBELIEVABLY LAGGY. It makes GitHub seem snappy. It scrolls to a black screen and slowly populates later. It takes tens of seconds to load conversations. On the rare occasions that I’ve tried the fun “ask Pro mode a math question” I thi…

The iOS app is hot garbage as well. The list of old chats will have topics randomly jumping around which makes it really annoying to try to choose the scheduled task that notified you.

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

#162

Post by jurgenburgen »

whateveracct wrote: post #148
spwa4 wrote: post #76

Earlier quoted context omitted.

Buy an M5 max for $4k and you have a portable Deepseek 0731 for life.

models are stuck in time. eventually the world moves forward and it is trained on too much obsolete data. training cannot end for LLMs intrinsically. it's not some fixed cost. it's an ongoing one.

> eventually the world moves forward and it is trained on too much obsolete data.

This is why LLMs are never going to be AGI. Humans don’t become obsolete just because they age.

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

#163

Post by jurgenburgen »

carlosjobim wrote: post #128
rdedev wrote: post #69

Earlier quoted context omitted.

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?

> Or else?

Their investors will throw the CEO under the bus and hire a new one that will enshittify it enough to make them money.

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

#164

Post by tristanj »

etempleton wrote: post #137
tristanj wrote: post #91

Earlier quoted context omitted.

Anthropic has 80%+ margins on inference. Google has 30%+ margins on compute. Both parties have discovered a literal money printer. The payback period is At those unit economics, anyone not borrowing aggressively here to create more money printers is a moron.

Why do they both need to keep borrowing so much money if the margins are so fat?

Demand for compute is growing 10x year-over-year, faster than inference profits can fund expansion. At 80% margin the payback period is 1.25 years. Cash flow can't keep pace with that scale.

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

#165

Post by boesboes »

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'm willing to pay >100$ a month to not have to use AI at all. It's trash and will never create anything of value.

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

#166

Post by boesboes »

arisAlexis wrote: post #105
TacticalCoder wrote: post #57

Earlier quoted context omitted.

And capitalism also works with crashes taking unprofitable companies down. And frauds, eventually, gets companies valuation like Enron and FTX to zero. And people go to jail. Now I'm not saying OpenAI or Anthropic are frauds. What I'm saying is that, eventually, things revert to what is just. The late 90s SV tech-bros behind pets.com or webvan for example faked it for 18 months to 36 months or so. At some point when…

Yes and since there is no fraud there is no reason for this panic they know what they are doing

hahahahaahahahhahahhaaa

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

#167

Post by tristanj »

stackskipton wrote: post #107
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.

Because again, we haven't seen further reports. As always, we are debating financials on a company that doesn't have to disclose them regularly.

We most certainly have: https://www.morningstar.com/stocks/anthropics-gross-margin-i...

The companies are growing so rapidly that citing their financials from several months ago is practically worthless.

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

#168

Post by camillomiller »

arisAlexis wrote: post #105
TacticalCoder wrote: post #57

Earlier quoted context omitted.

And capitalism also works with crashes taking unprofitable companies down. And frauds, eventually, gets companies valuation like Enron and FTX to zero. And people go to jail. Now I'm not saying OpenAI or Anthropic are frauds. What I'm saying is that, eventually, things revert to what is just. The late 90s SV tech-bros behind pets.com or webvan for example faked it for 18 months to 36 months or so. At some point when…

Yes and since there is no fraud there is no reason for this panic they know what they are doing

Delulu much? My God some people

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

#169

Post by wanda »

arisAlexis wrote: post #31

Capitalism works with debt for growth. Strange HN doesn't understand this

Subsets of HN do understand this.

Subsets of HN just want to know how long before they need to withdraw their savings, or sell their position.

I would say growth is even expedited with high allowances for borrowing/leverage, but at the cost of increasing systemic risk.

Obviously the people who will suffer from this are the taxpayers, who don't get a say in the matter, so no one is going to stop and consider whether it's a bad idea to continue issuing more and more debt.

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

#170

Post by deaux »

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…

> Did Uber die when a trip across town went from $3 to $13? No. It's giving more rides than ever, 10x more than when it was $3.

Would Uber have died if a competitor kept offering $3 rides? Yes.

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