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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

#211

Post by stackskipton »

nielsole wrote: post #194
SlinkyOnStairs wrote: post #177

Earlier quoted context omitted.

While $5000 is a lot, the people who rack up close or just over a thousand "API equivalent cost" are pretty common. > Most likely the subscription inference cost is much lower than you expect. This is probably not true because they'd be screaming it off every rooftop were that the case. Same deal with the API inference. Even the "profitable on inference" claim is sourced back to hearsay of informal statements made by…

I don't know about SEC rules but the anthropic CEO said they have a 50%+ margin on API pricing.

SEC rules means CEO cannot lie or deliberately hide the cost of something.

50%+ Margin statements have basically been "We are making 50% on delivering it." This does not include ANY of the costs of getting to this point, training, scraping, datacenters, people and so forth.

They are basically saying "Oh yea, the cost of GAS in the car is only X so charging Y per mile is great margin" while ignoring maintenance, cost of acquiring the car and so forth.

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

#212

Post by infecto »

SlinkyOnStairs wrote: post #172
infecto wrote: post #157

Earlier quoted context omitted.

I am not sure how grounded this is in reality. Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Has there been a ton of hype? Absolutely but the value proposition is getting more and more tangible. Did some of the AI companies over commit in spending? I am sure and they will probably hurt in the long…

> Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Most of this is still structured around "find use cases for AI" rather than one (or more) clear use cases being the reason for adopting AI. There's no "Lotus 1-2-3" of AI. Even the software development applications are still somewhat controversial and…

With the recent pushes into tools like Cowork/Claude Code for business users that’s not the reality I am seeing. We still have a long way to go to figure out the full value potential but it’s already at a point where there is a lot of low hanging fruit being able to be captured. Of course an anecdote of what I am seeing with my own company and companies I can peek into. YMMV but it’s a pretty clear path that these are going to be increasingly adopted.

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

#213

Post by mlinsey »

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…

You're observing that:

a) effective price-per-token is rising b) there is insufficient compute to meet the demand.

And your conclusion is that the industry is circling the drain and due to collapse?

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

#214

Post by mech422 »

whattheheckheck wrote: post #188
RealityVoid wrote: post #173

Earlier quoted context omitted.

Take the approach Geohot is suggesting. Take a shipping container, make a standard layout, cooling and compute load. Find a cheap source of electricity.. Place it and have compute.

Surely if it was that easy it'd be done?

It has been done... We used to get our POP gear built out from Dell (?) in shipping containers - pre-racked, wired, and cooled - just add network/power feeds. We'd have them dropped places we needed more capacity but there wasn't space available in the DC.

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

#217

Post by svnt »

signatoremo wrote: post #207
lelanthran wrote: post #184

Earlier quoted context omitted.

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 yea…

It is meaningless when what you sell costs more than what your customer pays for it.

I could sell $100B of GPUs at 90% of their cost tomorrow and I have market acceptance.

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

#218

Post by red_hare »

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…

If that's true, it's very unsustainable.

Gemma-4 26B-A4B + M5 MacBook Pro + OpenCode isn't Claude Code _yet_, but it's good enough that if I were forced to use it I would be fine.

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

#219

Post by stackskipton »

signatoremo wrote: post #207
lelanthran wrote: post #184

Earlier quoted context omitted.

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 yea…

Because at some point, you have to turn a profit. That's why people are wondering the margins, if their revenue is 30B but expenses are 60B with current investment repayment factor in, that means massive revenue increases or massive lowering of expenses are required to make the business profitable. What's the business impact if they do?

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

#220

Post by sandworm101 »

matrik wrote: post #196
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…

I'm not sure this information is grounded, but I remember to have read somewhere the inference is indeed profitable. My personal experience is similar. Running 2x3090s draw 500-600W and you can locally run amazing models with a similar setup.

Running the model isnt the cost. Watts per token is the math they show investors. You also have to be constantly training new models, which currently needs more compute than servicing the customer base. You have to biuld datacenters, and possibly powerplants to feed them. You have to carry debts. And you will need to buy new GPUs/ram every few years to remain competative. The total business is vastly different than simple gpu math.
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