Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

techcrunch.com

Post reply on HN
Print view View original

201–210 of 308 posts

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

#201

Post by PunchyHamster »

mrbombastic wrote: post #54
stavros wrote: post #44

Earlier quoted context omitted.

Yeah I don't understand it, it's a marathon with three companies perpetually a minute ahead, and people keep saying "I expect the stragglers to catch up". The only thing I can see them meaning is what you said, "in a minute the stragglers will be where the leaders were a minute ago", which, yeah, sure.

It makes perfect sense if you think things cannot improve indefinitely

Also, there is a good enough point where improvements for a given use case are on heavy diminishing returns

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

#202

Post by kiratp »

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.

At the full current retail API price.

Business buyers are paying API prices, not subscription

Disclosure: Work at Microsoft on AI

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

#203

Post by bitmasher9 »

postalrat wrote: post #193
sandworm101 wrote: post #163

Earlier quoted context omitted.

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…

In a decade the cost of compute will be a tiny fraction of what it costs now. Specialized hardware will exist that will be cheap and efficient.

The difference in the cost of compute between 2026 and 2036 won’t be nearly as large as the difference in the cost of compute between 2016 and 2026. Even at 2016 the slowdown in improvements was noticeable.

We might see a one time bump in inference when we move off GPUs onto more limited and efficient dedicated hardware, but the sustained fast pace of improvements are far behind us.

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

#204

Post by hn_throwaway_99 »

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…

Maybe for right now, but even in the very near future it seems like data center expertise would absolutely be a core competency of any AI leaders.

Heck, look at Facebook. Granted, they got started slightly before AWS, but not by much. Owning all of their own data centers is a huge competitive advantage for them, and unlike most of the other hyperscalers they don't sell compute to other companies (AFAIK).

Again, the commitment is for $100 billion in spend. Building lots of data centers for a lot cheaper than that price should absolutely be doable. Also, geographic distribution isn't nearly as important for AI companies given the way LLMs work. The primary benefit of being close to your data center is reduced latency, but if you think about your average chatbot interface, inference time absolutely swamps latency, so it's not as big a deal. Sure, you'd probably need data centers in different locales for legal reasons, and for general diversification, but, one more time, $100 billion should buy a lot of data centers.

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

#206

Post by xboxnolifes »

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…

If there is bubble to be popped, I'm guessing there's still a few years before it happens. Just based on the timeline of events, maybe end of 2028. Even if the big players find profitability, all of the other companies latching onto the AI-first identity will probably pop by then.

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

#207

Post by signatoremo »

lelanthran wrote: post #184
paulddraper wrote: post #171

Earlier quoted context omitted.

Anthropic revenue is ~$30B/year.

Revenue is a meaningless measure though; what's the spend:income ratio? Excluding capital investments, what's the cost of operations? At a very minimum, to repay the +$100b in investment within a reasonable timeframe, what's the minimum figure they have to bank post-tax each month?

Since when revenue is meaningless? It’s an indication of market acceptance. Anthropic has one of the most expensive plan, they didn’t undersell other models. Open weight models would otherwise dominate if cost is the only factor.

Also, investment is not money in the bank. They can’t withdraw $100b tomorrow. That means they don’t have to repay until after they got the investment, which is a commitment over several years.

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

#208

Post by kgwgk »

giancarlostoro wrote: post #182
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…

> Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. I think a LOT of companies really never needed to be on the public market, and its a darn shame that so many go on the stock market, we have this obnoxious culture where you have to fire tons of people if you have a bad quarter just to show you're stopping the bleeding. Companies literally fire and hire x number of people every quarter…

> I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years.

That exists already! People often complain as well when a company ends its golden years because of some economic hurdle and ends up being acquired by a bigger fish who is _not_ on the stock market.

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

#209

Post by svnt »

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.

And receiving investment from their vendor in exchange? When this is done in established companies it is typically called a kickback and directed toward one person, but in this case the whole thing is so incestuous the kickback goes straight to the top.

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

#210

Post by twoodfin »

svnt wrote: post #209
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.

And receiving investment from their vendor in exchange? When this is done in established companies it is typically called a kickback and directed toward one person, but in this case the whole thing is so incestuous the kickback goes straight to the top.

Is it crazy to imagine Anthropic can leverage short term cash flow now to build the models and products that will let them resell $100B in AWS infra with nice margins tomorrow?

If Amazon believes that story they’d be crazy not to invest.

Post reply on HN