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How much Anthropic and Cursor spend on Amazon Web Services

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Re: How much Anthropic and Cursor spend on Amazon Web Services

#91

Post by OptionOfT »

mossTechnician wrote: post #51
dcre wrote: post #26

Earlier quoted context omitted.

"Cherry pick the highest" is misleading. If your revenue is growing 10% a month for a year straight and is not seasonal, picking any other than the most recent month to annualize would make no sense.

If a company's revenue in January is $100 and it grows by 10% every month, the December revenue is $285. The year's revenue would be about $2,138, but ARR in December would be $3,423. That's 1.6x the actual revenue. ARR could be a useful tool to help predict future revenue, but why not simply report on actual revenue and suggest it might increase in the next year? I have found the most articles to be unclear to the r…

How can you talk about ARR if you only look at 1 year?

Re: How much Anthropic and Cursor spend on Amazon Web Services

#92

Post by literatepeople »

dcre wrote: post #45

Numbers are always interesting, assuming they're real, but I just want to comment on the Cursor thing: Zitron has been insisting for 6 months that Anthropic screwed Cursor somehow by raising prices on them but the claim has always been gibberish. It's not that it's false, it's that it's impossible to figure out what Zitron claims happened. He cannot describe (here or in https://www.wheresyoured.at/anthropic-and-opena…

Ed has constantly done this, and it's a shame because it has taken the air out of the room for real AI criticism. Most of Ed's criticism comes from a place of giving a narrative to people who are wishing for a magic bullet that makes ChatGPT vanish tomorrow rather than actually pressuring companies about the harms this technology can cause. This in part is why his writing so often focuses on perceived financial issues (despite his lack of credentials in financial journalism) rather than the social harms the technologies cause today (slop, delusions, manipulated truth).

Re: How much Anthropic and Cursor spend on Amazon Web Services

#93

Post by datadrivenangel »

OptionOfT wrote: post #91
mossTechnician wrote: post #51

Earlier quoted context omitted.

If a company's revenue in January is $100 and it grows by 10% every month, the December revenue is $285. The year's revenue would be about $2,138, but ARR in December would be $3,423. That's 1.6x the actual revenue. ARR could be a useful tool to help predict future revenue, but why not simply report on actual revenue and suggest it might increase in the next year? I have found the most articles to be unclear to the r…

How can you talk about ARR if you only look at 1 year?

It's useful for financial planning. Less useful for overall financial reporting given how volatile it is.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#94

Post by isoprophlex »

swyx wrote: post #6
isoprophlex wrote: post #2

Ed Zitron's style isn't for everybody, I understand that. But if these numbers, and the direction they're going in, are correct... to me this points to a significant AI bubble deflation coming soon. It just isn't sustainable, it seems.

if you are worried about AWS spend, i have news for you about non AWS spend. "coming soon" is also really over simplistic. you would have missed some of the greatest tech companies in the past 20 years if you evaluated startups based on their early-year revenue vs infra spend like sure i have a dog in this fight but i actually want the criticism to sharpen my thinking, unfortunately yours does not meet that bar.

are you glossing over the whole "aws bill isnt structural infra spend" thing?!

they spend 104% of revenue on ONE cloud provider and costs scale linearly with revenue growth. assume zitron didn't pull these numbers out of his ass.

educate me how this isnt selling $20 bills for $5. you're a smart dude; i myself aint seeing the "sustainable business practices" here

Re: How much Anthropic and Cursor spend on Amazon Web Services

#95

Post by x0x0 »

steveklabnik wrote: post #42
KallDrexx wrote: post #34

Earlier quoted context omitted.

Fwiw that's not necessarily true, because if Sonnet ends up using reasoning, then you are using more tokens than GPT-4 would have used for the same task. Same with GPT-5 since it will decide (using an LLM) if it should use the thinking model for it (and you don't have as much control over it).

This is addressed in the post.

Right, but if I understand you, the counterargument is dumb since the context in which we are discussing is business viability (vcs investing in businesses where the unit economics require inference cost decreases), so actual dollars out rather than some imaginary cost per token is the metric that matters.

Inference is getting so much cheaper that cursor and zed have had to raise prices.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#96

Post by tadfisher »

gruez wrote: post #46
noir_lord wrote: post #23

Earlier quoted context omitted.

I'm on like my fifth once in a generation financial crisis. At a certain point you just expect it.

How are you getting 5? In recent memory, there's only 3: dotcom bubble (2000), GFC (2008), covid (2020). You'd either have to go back in time even more (eg. savings and loan crisis in the 80s/90s), or include regional ones (eg. eurozone crisis) to hit 5.

Maybe they had strong exposure to Worldcom or Enron?

Re: How much Anthropic and Cursor spend on Amazon Web Services

#97

Post by ai-x »

dist-epoch wrote: post #87
baggachipz wrote: post #72

Earlier quoted context omitted.

An 18 hour old account, named suspiciously like an ai model company, trying to discredit a prominent AI skeptic.

Here I am, 2.5 year account discrediting him - the confirmation bias of Zitron is so thick, you need diamond tipped cutters to cut through it.

I'm betting big on AI (not a shill if you are alluding to that). Address my points. All other things are irrelevant.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#98

Post by steveklabnik »

x0x0 wrote: post #95
steveklabnik wrote: post #42

Earlier quoted context omitted.

This is addressed in the post.

Right, but if I understand you, the counterargument is dumb since the context in which we are discussing is business viability (vcs investing in businesses where the unit economics require inference cost decreases), so actual dollars out rather than some imaginary cost per token is the metric that matters. Inference is getting so much cheaper that cursor and zed have had to raise prices.

> so actual dollars out rather than some imaginary cost per token is the metric that matters.

Even if we take this as true, the point is that this is different than "the cost of inference isn't going down." It is going down, it's just that people want more performance, and are willing to pay for it. Spend going up is not the same as cost going up.

I don't disagree that there are a wide variety of things to talk about here, but that means it's extra important to get what you're talking about straight.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#99

Post by VirusNewbie » 

         I have sat with these numbers for a great deal of time, and I can’t find any evidence that Anthropic has any path to profitability outside of aggressively increasing the prices on their customers to the point that its services will become untenable for consumers and enterprise customers alike.
This is where he misunderstands. Enterprise companies will absolutely pay 10x the cost for Claude. Meta and Apple are two large customers, you think they won't pay $500 a month per employee? $1000 a month per employee? Neither of those are outrageous to imagine if it increases productivity 10%.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#100

Post by VirusNewbie »

oliwarner wrote: post #71
JCM9 wrote: post #48

Earlier quoted context omitted.

Yes, the Amazon AI stuff isn’t great. They don’t really have the right leadership or talent to do anything particularly competitive there.

Why do they need to compete? AI at Amazon should be laser-focussed on two things: selling compute time to AI Wannabees, and up-selling stuff to me in the shop. Everything else is expense.

AWS is not winning selling compute to AI folks. GCP and Azure have both done better selling AI services, which is part of the problem. Amazon is still the king for basic compute, but fell behind on the AI infra.
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