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

251–260 of 308 posts

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

#251

Post by RealityVoid »

SlinkyOnStairs wrote: post #177
RealityVoid wrote: post #168

Earlier quoted context omitted.

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.

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…

> While $5000 is a lot, the people who rack up close or just over a thousand "API equivalent cost" are pretty common.

I think if you're not Anthropic and you don't have access to the actual data, then you can't say for sure. A bunch of anecdotes on terminally-AI people on twitter is not making a convincing case for me, IMO.

On the other hand, if similarly sized models cost much much cheaper than this, why, in the world, would Anthropic have much higher costs than that?

Also, counterpoint, maybe they want you to think that they have higher costs so you're more willing to actually pay for it?

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

#252

Post by mattmanser »

inciampati wrote: post #72
anonyfox wrote: post #69

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.

I'm already living in this future. In a decent execution framework, with context management, memory via unix, and mechanisms for web search and access, local models are effectively on par with frontier ones. And they can often be much faster. I'll keep paying fees for the AI companies until they stop truly subsidizing and leading. They are getting close to the edge of utility, but we can use their services now to boo…

I just don't believe you.

We can all see the vast gulf between paid + open AI in image and video, it's really visible. Compare Grok to wan or LTX or whatever and the difference is vast. There is no debate that those sort of models are 3 or 4 generations behind, because you can't argue with your eyes.

But DIYers like you claim that text LLMs are up to scratch with the frontier models?

Again, I simply don't believe you. I can't be bothered to download like however many GB it is to find out, because the result is going to be completely underwhelming and going back to 2023.

And worse, when these 'open' models do start getting good, what makes you think these companies will carry on open sourcing their models?

At the moment they're trying to stay relevant, get investment. When these models do start getting good, they won't give away the weights, they'll sell them.

They're not actually open.

And then in a year or two your 'open' model will be horrifically out-of-date with completely out of date knowledge, because you can't add to the knowledge of the model, it's stuck at whatever date the data it was trained on finished.

So in a year or two, those models will be worthless. That's why Ali, Meta, etc. are giving them away.

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

#253

Post by htx80nerd »

thinkingtoilet wrote: post #232
sharts wrote: post #170

Are taxpayers going to have to bail out these entities when all this insanity settles?

Only if we let them make us do it. Vote.

Ruling Elites and Banker Class are pals. They wont let each other down too much.

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

#254

Post by mlinsey »

svnt wrote: post #222
mlinsey wrote: post #213

Earlier quoted context omitted.

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?

They are different observations, I think, though the phrasing confuses it: a) cost per successful task is rising — eg claude max allocation is functionally shrinking b) is there enough potential cost reduction in the queue to make up the gap c) if open models converge on a more efficient but slightly-less capable point (which has effectively happened) what is the actual moat?

Yes, cost per successful task is rising - ie, we are all paying effectively more for AI.

And yet - Anthropic is still struggling to have enough capacity to serve demand - they are virtually sold out.

And yes, are almost-as-good open models, on part with the closed models from 6 months ago (at worst), that are just a single Openrouter API call away, and yet Anthropic is still selling out. So people are paying for the premium product anyway, for whatever reason - maybe the last bit of intelligence is worth it, maybe they like the harnesses/products around the models, maybe it's a brand/enterprise sales thing.

Put aside your feelings about the AI industry and imagine we are talking about thingamajigs. Prices for thingamajigs are going up. They are still selling out about as fast (or faster) than the company selling them can build factories. There are more cost-effective competitors already in the market, but thingamajigs are selling out anyway.

Would you, looking at the thingamajig industry, conclude the "jig is almost up"? That "the returns aren’t anywhere close to what investors expect" and that the impending IPO is all some desperate hail mary to save things before the collapse?

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

#255

Post by robotnikman »

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…

Its one of the reasons Valve is considered such a great company by its customers. If they were a public company, they would be enshittifying everything in an attempt to scrape every last penny they can.

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

#256

Post by twoodfin »

jcgrillo wrote: post #225
red_hare wrote: post #218

Earlier quoted context omitted.

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.

Yes, it's amazing how quickly so many tech companies have hitched their tooling to these big AI vendors seemingly without any thought towards whether they'll still exist a year or three or five from now. Insane behavior. To the (debatable!) extent that AI coding tools are useful at all wouldn't it be a hell of a lot smarter to self-host? At least that way you have some control over QoS, and a stable, predictable resu…

The basic business math is (to start) software companies realizing that spending $10k, $20k, $50k (more ?) per year, per developer for current models at current token rates might not be particularly insane, given the value return.

Models are likely going to keep getting better, and as costs go down, demand is likely to rise faster.

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

#257

Post by postflopclarity »

stackskipton wrote: post #211
nielsole wrote: post #194

Earlier quoted context omitted.

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…

but comparing your margin of charging to drive a mile to the price of gas makes a lot of sense? that is the only variable cost in the equation. training / scraping / people are all pretty much fixed costs.

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

#258

Post by tptacek »

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…

People had literally the same arguments about Amazon, a company Matt Yglesias once described as "a charity run on behalf of the American consumer by the finance industry".

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

#259

Post by madamelic »

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?

> 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?

I am completely confident that Amazon of all companies is totally fine with not taking a return for a long time.

Amazon didn't book a profit for the first decade of their company. It's completely modus operandi to burn, burn, burn to get as big as possible.

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

#260

Post by an0malous »

kiratp wrote: post #202
an0malous wrote: post #162

Earlier quoted context omitted.

> 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

Are your API prices profitable?
Post reply on HN