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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

#161

Post by mistrial9 »

IMTDb wrote: post #106
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…

The problem is that at that scale, the alternative is building your own data centers. You'd probably want at least 2 in the US, 2 in Europe, 2 in Asia, maybe 1 in Africa and 1 in LATAM. So 8-10, and you need at least half of them ready "on time." What does "on time" mean? You'll need to negotiate with local authorities, some friendly, some not. Data centers aren't exactly popular neighbors these days. Then negotiate…

not sure what you are describing, however a random item is that in 2026 low-tech Chile is building sixty datacenters in or near Santiago, in the business news.

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

#162

Post by an0malous »

twoodfin wrote: post #150
Argonaut998 wrote: post #131

Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…

From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.

> From the limited perspective of software development, today’s models are well-worth their per-token cost.

At the current price or real price? Anthropic said a $200 subscription can cost them $5000 so the real price could be anywhere from 10-30x the current price.

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

#163

Post by sandworm101 »

twoodfin wrote: post #150
Argonaut998 wrote: post #131

Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…

From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.

But that per-token cost is a total joke. All these companies are fighting to build market share in some future dominated by one or two AI ecosystems. It is musical chairs until someone creates the one ring to rule them all. So they are charging token amounts just to claim revenue as they burn through investor dollars.

In short: per-token charges currently cover maybe 1% of the total costs in this field. To pay ongoing costs, and pay back investors, everyone will need to pay 100x or 1000x the current rates, likely for decades.

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

#164

Post by Argonaut998 »

IshKebab wrote: post #155
Argonaut998 wrote: post #131

Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…

Doubtful. Look at how long Uber and Tesla have lasted despite making huge losses. Hell even Magic Leap somehow still exists (I guess because they don't have running costs beyond salaries). I think this can keep going for at least another 5 years.

Uber had only 25B invested in them before their IPO. OpenAI has 120B invested in them currently which excludes these kinds of deals (as far as I’m aware)!

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

#165

Post by hliyan »

IshKebab wrote: post #155
Argonaut998 wrote: post #131

Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…

Doubtful. Look at how long Uber and Tesla have lasted despite making huge losses. Hell even Magic Leap somehow still exists (I guess because they don't have running costs beyond salaries). I think this can keep going for at least another 5 years.

> Look at how long Uber and Tesla have lasted

In a system of open-ended growth, yes, you can point to how long the system has persisted as evidence of its longevity. But in a system of plateauing growth, the system's age is an indicator of how close it may be to death. I suspect that the model that permitted the "success" of Uber and Tesla is nearing the end of its lifetime.

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

#166

Post by beisner »

electroly wrote: post #129
TSiege wrote: post #124

Earlier quoted context omitted.

latency absolutely matters? this is such a weird thing to say. for training sure, but customers absolutely want low latency

They want it, sure. Customers want everything if it's free, but this is about what they value with their money . In this thought experiment, you're Anthropic, not the customer. You're making a choice that's best for Anthropic . Will Anthropic lose customers because the latency is higher? No way. Customers want low cost and lots of usage more than they want low latency. In a cutthroat race to the bottom, there's no ro…

They’re unwilling to pay for fast mode because of the current step function price increase once you hit your quota. It’s a psychological effect. Because most shops I know in the US currently paying $125/mo per seat for Claude would happily - HAPPILY - pay 2x, and begrudgingly pay 10x that amount for the same service. If fast mode was priced 25% or 50% more they’d happily pay for that too. But it’s just not priced that way currently with weird growth subsidization & psychology.

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

#167

Post by cmrdporcupine »

inciampati wrote: post #83
lokar wrote: post #49

Earlier quoted context omitted.

I disagree. The point of the mythos hype is to get regulation to cut off competitors.

Didn't OAI just try that 18 months ago?

They'll all keep on trying it until it either totally fails or succeeds.

As people keep pointing out, the moat is insufficient to ward off international or domestic competitors.

So the answer is to try to seek regulatory capture.

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

#168

Post by RealityVoid »

an0malous wrote: post #162
twoodfin wrote: post #150

Earlier quoted context omitted.

From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.

> From the limited perspective of software development, today’s models are well-worth their per-token cost. At the current price or real price? Anthropic said a $200 subscription can cost them $5000 so the real price could be anywhere from 10-30x the current price.

No, that is probably one of the worst cases they probably saw. Most likely the subscription inference cost is much lower than you expect. If you look at costs for similar open models they are much lower than what you get by buying from anthropic, so that is the real cost basis I expect.

It's likely Amazon is making a fucking killing though.

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

#169

Post by twoodfin »

sandworm101 wrote: post #163
twoodfin wrote: post #150

Earlier quoted context omitted.

From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.

But that per-token cost is a total joke. All these companies are fighting to build market share in some future dominated by one or two AI ecosystems. It is musical chairs until someone creates the one ring to rule them all. So they are charging token amounts just to claim revenue as they burn through investor dollars. In short: per-token charges currently cover maybe 1% of the total costs in this field. To pay ongoin…

From the perspective of a deal like this, “total costs in the field” matter less than incremental cost per token served.

The unit economics for today’s frontier models should be great, and this suggests Anthropic believes they’ll get better.

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