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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

#61

Post by petesergeant »

jeffbee wrote: post #41
Culonavirus wrote: post #32

Earlier quoted context omitted.

Only Google and xAI build their own, no? I don't think it's that easy to vertically integrate massive datacenters into a software company. Both Google and xAI (Tesla, SpaceX) have a massive wealth of experience when it comes to building factories.

New level of glazing Elon Musk unlocked. xAI has a vertical integration advantage because Tesla once moved into an old Toyota factory and because once they paid Panasonic to put a Tesla sign outside a Panasonic battery factory. Incredible content.

I would struggle to dislike Elon more, but this seems like you’re some kind of weird anti-Musk fanatic

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

#62

Post by jubilanti »

mitchell_h wrote: post #33
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 watched some explain how deepseak got good and the Chinese approach to LLM training. Really wish I could remember it. The premise was China thinks of LLMs not as a thing separate from hardware, but gains efficiencies at each layer of the stack. From Chips to software, it's all integrated and purpose built for training. Wonder if Anthropic is making a mistake by focusing on "consumer" hardware, and not going super s…

So you watched some random video from some random YouTuber, didn't even remember who made it, so much so you didn't even remember that deepseek isn't spelled "deapseak", didn't bother to even find it or verify, and then you go asserting your memory as fact on a serious discussion forum.

Comments like yours add nothing to the discussion.

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

#63

Post by vasco »

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…

That is a project you can work on at any point in the future and the more you delay it the more certain your investment will be about what you really need. But those additions to the PnL are capped to the costs.

In the meantime if you work on revenue generating work, that side of PnL is uncapped. So you can either put some engineers on reducing your costs at most by 100% or, if they worked on product ideas they could be working on things that generate over 9000% more revenue.

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

#64

Post by engineer_22 »

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.

>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.

On the contrary, the model is the moat.

The model represents embodied capital expenditure in the form of training. Training is not free, and it is not a commodity, it is heavily influence by curation.

Eventually the ever-increasing training expense will reduce the competition to 2-3 participants running cutting edge inference. Nobody else will be able to afford the chips, watts, and warehouse. It's a physics problem - not a lack of will.

If you're a retail user, and a lower-tier model is suitable for your work, you'll have commodity LLM's to help you. Deprecated models running on tired silicon. Corporate surveillance and ad-injection.

But if you're working on high-stakes problems in real time, you're going to want the best money can buy, so you'll concentrate your spend on the cutting-edge products, open API's, a suite of performance monitoring tools and on-the-fly engineering support. And since the cutting edge is highly sought after, it's a seller's market. The cutting edge products buoyed by institutional spend will pull away from the pack. Their performance will far exceed what you're using, because your work isn't important. Hockey stick curve. Haves and Have-Nots.

The economic reality is predetermined by today's physical constraints - paradigm shifting breakthroughs in quantum computing and superconductors could change the calculus but, like atomic fusion power, don't count on it being soon.

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

#65

Post by lubujackson »

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…

Look at GPU and RAM prices and data center rollout. We have quickly reached Earth's capacity for compute - it is a lot like the housing market. Once there is global saturation, the price to buy becomes increasingly high EVERYWHERE. Let's also not forget that Anthropic moves the market with their purchases and usage. They might literally be unable to buy capacity they need (or project to) and are doing this deal to pave a roadmap for the near-term and to keep global prices (somewhat) down.

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

#66

Post by SpicyLemonZest »

ForrestN wrote: post #48
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.

I think this "Mythos" situation, whether real or hype, points to the endgame here. Eventually, when you have a model powerful enough to have big consequences in the world, you stop worrying about selling it to consumers and start either a) using it to rule the world or b) watch as it gets nationalized. If you have a machine powerful enough to automate everything, why sell access to it when you could just...be all thi…

Sometimes selling services is just the best business model. Intuit has accounting software powerful enough to have big consequences in the world, yet they mostly sell it to accountants rather than doing the accounting themselves.

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

#67

Post by brianjlogan »

johnbarron wrote: post #51
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.

Please, some of us are long NVIDIA...let us cope in peace. :-) Here is the thing nobody wants to say out loud or they are too dumb to realize. AI is intelligence, and intelligence has almost never been the binding constraint on productivity. So you will get no productivity increase from the AI bubble. Yes, you read that correctly. The test is simple, if raw brainpower were the bottleneck, you could 10x any company by…

Besides to say that your competitor can turn around and hire the same team of PHDs at the same rate that you can. Compare and contrast PHD's on leaderboards and have access in seconds with a new API key or model selector.

Granted LLM's are not even PHDs.

What a weird time we live in...

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

#68

Post by samdixon »

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…

From my understanding, if you want to use native Claude in AWS Bedrock, it runs from an AWS datacenter. I'm guessing that's why regardless of running your own stack... they still need a footprint in all the major clouds.

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

#69

Post by anonyfox »

Sounds like moneygrab is accelerating before consumer grade local models are getting good enough for local inference in few years. Huge house of cards here. Demand skyrocketing until it’s suddenly dropping entirely with ondevice inference.

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

#70

Post by brianjlogan »

bombcar wrote: post #57
spwa4 wrote: post #3

> At the heart of this deal is Amazon’s custom chips: Graviton (a low-power CPU) and Trainium (an Nvidia competitor and AI accelerator chip). The Anthropic deal ... Yeah, totally not desperately seeking investment to keep the party going ...

It does seem like the tempo and volume of the music is getting louder and louder as the number of chairs is subtly decreasing, doesn’t it?

Because also look at the bond market... It's all coming to a crescendo including the global economic recession indicators which will be a cold sprinkler on the whole party.

Gemma4 being able to run on commodity hardware I think is the real win out of this. Pop the bubble. Settle the craziness and the claws. Let scientists and engineers tinker and improve in the background. Hopefully we can have GPUs be affordable for gaming again although I'm starting to think that will never happen.

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