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Anthropic raises $13B Series F

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Re: Anthropic raises $13B Series F

#571

Post by utyop22 »

pembrook wrote: post #162
usrnm wrote: post #9

I feel like the money itself makes less and less sense these days. It's just numbers that are becoming increasingly detached from the real world

Before you pat yourself on the back for being so smart and grounded... Remember, every technology you use today followed this pattern, with winners emerging that absolutely did go on to be extremely profitable for decades. Most of us remember the .com era. But in the early 1900s there was literally hundreds of automotive startups (actual car companies, and tens of thousands of supplier startups) in the metro-detroit…

"The point of these VC funds is to lose most of the time and win big very rarely."

Sure, but in my view, I think we are on the downtrend now and this line of thinking has been taken way too far.

Re: Anthropic raises $13B Series F

#572

Post by ZephyrBlu »

wongarsu wrote: post #110
StopDisinfo910 wrote: post #37

Earlier quoted context omitted.

Alphabet 2024 revenue: 350 billions dollars Anthropic 2024 revenue: 1 billion dollars Unreasonable doesn’t even start to capture it. Anthropic being worth 10% of Alphabet is beyond insane.

So all it takes is Anthropic 35x-ing their revenue once they start selling ad spots? That sounds pretty reasonable to me. Right now nobody wants to be the first to offer advertising in LLM services, but LLM conversation history provides a wealth of data for ad targeting. And in more permissive jurisdictions you can have the LLM deliver ads organically in the conversation or just shift the opinions and biases of the m…

__350x-ing__, not 35

Re: Anthropic raises $13B Series F

#573

Post by utyop22 »

xpe wrote: post #144
usrnm wrote: post #9

I feel like the money itself makes less and less sense these days. It's just numbers that are becoming increasingly detached from the real world

No disrespect to anyone in particular*, but I don’t care about one person’s armchair quarterback “feelings” about investment levels, bubbles, or . Give me something I can learn from. * I’m an equal opportunity critic of comments that are indistinguishable from people yelling into the void with whatever pops into their head. So yes, I’m extremely critical of this very human tendency that isn’t helpful.

I agree to an extent. But this stuff is actually super hard to do. Humans tend not to like doing the hard stuff.

Re: Anthropic raises $13B Series F

#575

Post by illiac786 »

llamasushi wrote: post #22

The compute moat is getting absolutely insane. We're basically at the point where you need a small country's GDP just to stay in the game for one more generation of models. What gets me is that this isn't even a software moat anymore - it's literally just whoever can get their hands on enough GPUs and power infrastructure. TSMC and the power companies are the real kingmakers here. You can have all the talent in the w…

I sincerely hope this whole LLM monetization scheme crashes and burns down on these companies.

I really hope we can get to a point where modest hardware will achieve similar results for most tasks and these insane amount of hardware will only be required for the most complex requests only, which will be rarer, thereby killing the business case.

I would dance the Schadenfreude Opus in C major if that became the case.

Re: Anthropic raises $13B Series F

#576

Post by rich_sasha »

simianwords wrote: post #328
rich_sasha wrote: post #283

Earlier quoted context omitted.

It's the SV playbook: invent a field, make it indispensable, monopolise it and profit. It still amazes me that Uber, a taxi company, is worth however many billions. I guess for the bet to work out, it kinda needs to end in AGI for the costs to be worth it. LLMs are amazing but I'm not sure they justify the astronomical training capex, other than as a stepping stone.

SV playbook has been to make sustainable businesses. Uber makes profits, so do Google, Amazon and other big tech. > LLMs are amazing but I'm not sure they justify the astronomical training capex, other than as a stepping stone. They can just... stop training today and quickly recuperate the costs because inference is mostly profitable.

All these businesses looked incredibly unsustainable for a long time. Uber was a cash shredder. Amazon didn't turn a profit for years, IIRC. They became profitable essentially by becoming quasi-monopolies.

Indeed, LLM companies likely turn operating profits, but I'm not sure that alone justifies their valuations. It's one thing to make money, it's another to make a return for investors.

And sure, valuations are growing faster than you can blink. Time will show if this in turn is justifiable or a bubble.

Re: Anthropic raises $13B Series F

#577

Post by ricardobayes »

bcrosby95 wrote: post #291
dom96 wrote: post #263

Earlier quoted context omitted.

> if I give you $15B, you will probably make a lot more than $15B with it "probably" is the key word here, this feels like a ponzi scheme to me. What happens when the next model isn't a big enough jump over the last one to repay the investment? It seems like this already happened with GPT-5. They've hit a wall, so how can they be confident enough to invest ever more money into this?

I think you're really bending over backwards to make this company seem non viable. If model training has truly turned out to be profitable at the end of each cycle, then this company is going to make money hand over fist, and investing money to out compete the competition is the right thing to do. Most mega corps started out wildly unprofitable due to investing into the core business... until they aren't. It's almost…

It's an interesting case. IMO LLMs are not a product in the classical sense, companies like Anthropic are basically doing "basic research" so others can build products on top of it. Perhaps Anthropic will charge a royalty on the API usage. I personally don't think you can earn billions selling $500 subscriptions. This has been shown by the SaaS industry. But it is yet to be seen whether the wider industry will accept such royalty model. It would be akin to Kodak charging filmmakers based on the success of the movie. Somehow AI companies will need to build a monetization pipeline that will earn them a small amount of money "with every gulp", if we are using a soft drink analogy.

Re: Anthropic raises $13B Series F

#578

Post by utyop22 »

solomonb wrote: post #267
DebtDeflation wrote: post #89

Earlier quoted context omitted.

The wildest part is that the frontier models have a lifespan of 6 months or so. I don't see how it's sustainable to keep throwing this kind of money at training new models that will be obsolete in the blink of an eye. Unless you believe that AGI is truly just a few model generations away and once achieved it's game over for everyone but the winner. I don't.

They are only getting deprecated this fast because the cost of training is in some sense sustainable. Once it is not, then they will no longer be deprecated so fast.

Is it though? Its only sustainable to the extent that there is easy access to funding on favourable terms...

Re: Anthropic raises $13B Series F

#579

Post by utyop22 »

SchemaLoad wrote: post #451
powerapple wrote: post #354

Earlier quoted context omitted.

Also not all compute was necessary for the final model, a large chunk of it is trial and error research. In theory, for $1B you spent training the latest model, a competitor will be able to do it after 6 months with $100M.

Not only are the actual models rapidly devaluing, the hardware is too. Spend $1B on GPUs and next year there's a much better model out that's massively devalued your existing datacenter. These companies are building mountains of quicksand that they have to constantly pour more cash on else they be reduced to having no advantage rapidly.

Yes indeed if we look at it from this equation:

FCFF = EBIT(1-t) - Reinvestment

If the hardware needs constant replacement, that Reinvestment number will always remain higher than what most people think.

In fact, it seems none of these investments are fixed. Therefore there are no economies of scale (as it stands right now).

Re: Anthropic raises $13B Series F

#580

Post by HellDunkel »

dpe82 wrote: post #331
AlexandrB wrote: post #309

Earlier quoted context omitted.

The whole LLM era is horrible. All the innovation is coming "top-down" from very well funded companies - many of them tech incumbents, so you know the monetization is going to be awful. Since the models are expensive to run it's all subscription priced and has to run in the cloud where the user has no control. The hype is insane, and so usage is being pushed by C-suite folks who have no idea whether it's actually ben…

In a previous generation, the enabler of all our computer tech innovation was the incredible pace of compute growth due to Moore's Law, which was also "top-down" from very well-funded companies since designing and building cutting edge chips was (and still is) very, very expensive. The hype was insane, and decisions about what chip features to build were made largely on the basis of existing vendor relationships. Tho…

You completly forgot about the invention of the home computer. If we would have all been loging into some mainframe computer using a home terminal your assessment would be correct.
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