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Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

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Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#11

Post by shubhamjain »

If you think you need to spend $100B, does using a third-party cloud provider still make sense? It doesn’t matter what sweet deal Amazon is pitching—in that scenario, you’d want to own your stack. Especially in a hyper-competitive field like this, where margins are going to matter a lot soon.

It feels like these hyperscalers are just raising as much as they can giving extremely rosy projections becauses these sooner or later peak is going to be reached (if that hasn’t happened already)

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#12

Post by hmmmmmmmmmmmmmm »

iot_devs wrote: post #7

Someone can explain to me what's the expectations for these AI labs? I mostly see their products as commodity at this point, with strong open source contenders. Eventually it will become hard to justify the premium on these models.

None of them have any moat, OpenAI already lost the lead [1] and no one is "winning". It is just a race to the bottom as they burn through GPUs that won't even last that long.

[1] https://x.com/kenshii_ai/status/2046111873909891151/photo/2

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#15

Post by Tepix »

hmmmmmmmmmmmmmm wrote: post #12
iot_devs wrote: post #7

Someone can explain to me what's the expectations for these AI labs? I mostly see their products as commodity at this point, with strong open source contenders. Eventually it will become hard to justify the premium on these models.

None of them have any moat, OpenAI already lost the lead [1] and no one is "winning". It is just a race to the bottom as they burn through GPUs that won't even last that long. [1] https://x.com/kenshii_ai/status/2046111873909891151/photo/2

GPUs are lasting longer than foreseen, in fact old GPUs are more valuable now (making more money!) than they were three years ago when they were new.

Tokens will continue to increase in price until the supply meets the demand. That's going to take a while.

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#16

Post by Zababa »

sensanaty wrote: post #14

I'm no economist, but how exactly does this make sense? Amazon is basically just giving them 5B which will then be used to repay them back 20x that amount??

I was wondering the same thing. I think it's something like, they're going to pay for infra anyways, so Amazon pushes them to allocate their spend to AWS in exchange for 5B.

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#17

Post by Tepix »

shubhamjain wrote: post #11

If you think you need to spend $100B, does using a third-party cloud provider still make sense? It doesn’t matter what sweet deal Amazon is pitching—in that scenario, you’d want to own your stack. Especially in a hyper-competitive field like this, where margins are going to matter a lot soon. It feels like these hyperscalers are just raising as much as they can giving extremely rosy projections becauses these sooner…

Sure: If you can't get enough compute by ordering it yourself, make deals with anyone who promises to get you more compute.

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#18

Post by spenvo »

cma wrote: post #10
iot_devs wrote: post #7

Someone can explain to me what's the expectations for these AI labs? I mostly see their products as commodity at this point, with strong open source contenders. Eventually it will become hard to justify the premium on these models.

Everyone using Claude code on a personal subscription is default opted in to getting their data trained on. Private troves of data like are seen to potentially end up in a winner take all scenario. More data, better models, attracts more users, results in more exclusive data (what Altman calls the data flywheel).

PSA: this is true (the defaults), but there's a "Help improve Claude" setting that you can disable here https://claude.ai/settings/data-privacy-controls It's my understanding that, as long as this is off, Anthropic does not train on Claude Code conversations, inputs/outputs -- if anyone knows otherwise, please tell and provide a link if possible.

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#19

Post by Zababa »

shubhamjain wrote: post #11

If you think you need to spend $100B, does using a third-party cloud provider still make sense? It doesn’t matter what sweet deal Amazon is pitching—in that scenario, you’d want to own your stack. Especially in a hyper-competitive field like this, where margins are going to matter a lot soon. It feels like these hyperscalers are just raising as much as they can giving extremely rosy projections becauses these sooner…

I think it could make sense to not want to own the stack if you think it's going to cost you velocity/focus? Which is probably the play here. But I'm not certain at all.

Re: Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

#20

Post by victorbjorklund »

sensanaty wrote: post #14

I'm no economist, but how exactly does this make sense? Amazon is basically just giving them 5B which will then be used to repay them back 20x that amount??

5 billion now vs 10 billion per year in spend on compute that you had to buy anyways (not necessarily at aws)
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