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Google plans to invest up to $40B in Anthropic

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Re: Google plans to invest up to $40B in Anthropic

#491

Post by etempleton »

pseudohadamard wrote: post #406
skybrian wrote: post #276

Context: a few weeks ago, Anthropic signed a deal to buy "multiple gigawatts of next-generation TPU capacity" from Google and Broadcom [1]. There have been several previous deals, too. Some people call this sort of thing a "circular deal", but perhaps a better way to think of it is as a very large-scale version of vendor financing? The simple version of vendor financing is when a vendor gives a retailer time to pay f…

It's pretty much vendor financing (although we could argue whether it should be classed as circular investment), with the extra trick being that both sides get to make number go up with it, through stock market valuations and the ability to borrow more money to set fire to so you can show how successful you are.

I think everyone is incentivized to keep the music playing and the party going with AI. Because the alternative is a massive correction like we have rarely seen.

What if AI is never good or cheap enough to reach significant profitability?

Re: Google plans to invest up to $40B in Anthropic

#492

Post by bonesss »

skybrian wrote: post #388
fc417fc802 wrote: post #353

Earlier quoted context omitted.

In another context I might see it as vendor financing. However given that Google and Anthropic are competitors in this segment and given that Google has previously invested in them I'd rather see this as a sort of bartered stock purchase presumably for the purpose of hedging against failure. If Anthropic wins the race and it turns out to be winner takes all and you happen to own half of Anthropic then you still win h…

Sure, since Google is both a supplier and a competitor, it’s both vendor finance and hedging. Also, it increases their investment in AI, in general. Arguably, too much of this kind of hedging is anti-competitive. But that doesn’t seem to be much of a problem yet?

Are we stoping too early in this analysis though?

Google versus OpenAI and Anthropic, sure, but Microsoft is deep into OpenAI. Google helping Anthropic is also putting MS into a corner (one that may even be shrinking? Copilot and openAI financing hurting their brand, rumours of deep displeasure at OpenAIs promises v returns).

Seen from afar I see Google happy to provide TPUs for money (improving Googles strategic positioning), torpedoing confidence in LLMs with their search AI summaries, and using their bankroll to force larger competitors (MS in particular), to keep investments high regardless of performance and user revolts and internal tensions with Sam Altmans sales approach. Plus, Anthropic is in ‘the lead’ right now product wise, so grooming them as a potential purchase would also seem to be a strategic hedge in the long term.

Re: Google plans to invest up to $40B in Anthropic

#493

Post by cavisne »

stingraycharles wrote: post #440
zmmmmm wrote: post #206

It feels like Anthropic is everybody's insurance policy against someone else winning the AI race. So you have Amazon, Google, Microsoft basically every major tech company pushing their own tech hard but simultaneously ensuring they have a survival level stake in Anthropic if they can't build or acquire their way to stay at frontier level performance themselves.

I find it interesting that Anthropic is in this position and not OpenAI. Where did OpenAI go wrong? Lack of focus and overambitious in some of their spending commitments?

Does not seem that complicated. OpenAI basically had to do a lock-in deal with Microsoft/Azure at the time, and they pioneered this circular funding hyperscaler deal structure so there were some rough edges.

Anthropic (all ex Open AI) knew the negatives of the deal, so they made a slightly better deal with AWS, not a full lock in. They also grounded it in hardware from the start, ie. being the flagship customer for Trainium, the flagship customer for external usage of TPU's.

Re: Google plans to invest up to $40B in Anthropic

#494

Post by Spacemolte »

james2doyle wrote: post #309
consumer451 wrote: post #104

It is very difficult for me to see any amount of money being thrown at Anthropic as a bad idea. The amount of new revenue that I am personally able to create for my clients, using Claude models for dev, and Claude models inside the insanely agile products delivered, is astounding. If I was not currently experiencing this myself, and someone told me that this was possible, I would be calling them names.

You’re paying the subsidized cost. Those margins will shrink once the real bill comes due. I really think everyone will look back at this time as the golden area of cheap AI. We are already seeing the costs (and restrictions/limits) creep up with the Western models.

It amazes me how productive it's possible to be using AI, but I also has this nagging feeling that we are being reeled into being so reliant on this that when the price starts going up, we will simply eat the cost.

The math is pretty simple, and it's easy to justify still paying the price even if it goes up 10 fold, when compared to hirering more resources its still cheap.

So I guess having multiple players and competition in the market is the key?

Re: Google plans to invest up to $40B in Anthropic

#495

Post by elliotec »

jameshart wrote: post #451
stasomatic wrote: post #327

Earlier quoted context omitted.

I am hobbyist playing around. Recently dropped CC (which gave me a sense of awe 2 months ago), but they realized GPUs need CapEx and I want to screw around with pi.dev on a budget. Then on to GH Copilot but couldn't understand their cost structure, ran out of quota half month in, now on Codex. I don't really see any difference for little stuff. I also have Antigravity through a personal Gmail account with access to O…

There has always been a gap between the experience of solo/small shop developers, vs. developers who work in teams in a large corporate environment. But thanks to open source, we have for the past twenty years at least mostly all been using the same tools. But right now, the difference in developer experience between a dev on a team at a business which has corporate copilot or Claude licenses and bosses encouraging t…

Forgive my ignorance, but what exactly is the vast difference? Who's doing more of what, or whatever you're implying? And how do you quantify this?

Re: Google plans to invest up to $40B in Anthropic

#496

Post by techpression »

ngruhn wrote: post #442
lukan wrote: post #431

Earlier quoted context omitted.

How can there be a "winner takes it all" situation with AI? OpenAI lead the game while they were best. Antrophic followed and got better. Now openAI is catching up again and also google with gemini(?) ... and the open weight models are 2 years behind. Any win here seems only temporary. Even if a new breakthrough to a strong AI happen somehow.

I guess if you build the first AI that can autonomously self improve, then nobody can catch up anymore.

If that happens catching up will be meaningless, everything we know and care about will change. You don’t have to be doomsday about it even, a self improving AI will quickly be more efficient than a human brain, all the data centers will be useless, tech companies will collapse (so will most others), everyone will have an incredible AI resource for the price of a hotdog. There’s no way it wouldn’t leak from whoever made it, either by people or by the AI itself.

Re: Google plans to invest up to $40B in Anthropic

#497

Post by jazzyjackson »

morserer wrote: post #434
dieortin wrote: post #300

Earlier quoted context omitted.

That’s like firing someone because he uses vim instead of VSCode. Who cares about the tools someone uses if he still does his job well?

Because the job itself has now changed, and they haven't. Their output speed might have been eclipsed by that of the engineers who efficiently adopted the new tooling. Where I work, the power dynamics have shifted wildly. There are a number of senior engineers who refuse to touch the stuff, and as a result, they can barely keep up with their peers. Some of our juniors are now running laps around them. When a stranger…

How do you mean "barely keep up" and "running laps around them" ?

Are the juniors increasing economic productivity or just pushing lines of code?

Re: Google plans to invest up to $40B in Anthropic

#498

Post by jazzyjackson »

johanneskanybal wrote: post #330
an0malous wrote: post #153

Earlier quoted context omitted.

What is all this AI doing? People are spending 10’s to 100’s of billions and no service or technology seems better or cheaper. Everything is more expensive and worse.

It's a great tool, and at 1/10 or 1/100th the cost of actual developers. In the context of yc I guess watch out getting re-disrupted by a smaller team faster than before. But that's really the trend the past 40 years so nothing is new. Well maybe the velocity combined with us loosing it's footing at the same time. But yea it's not gonna make facebook 20% better tomorrow just that you need 5 people instead of 40 to bu…

And we all know what a positive impact to quality of life building facebook made.

Re: Google plans to invest up to $40B in Anthropic

#500

Post by zarzavat »

fc417fc802 wrote: post #473
svnt wrote: post #471

Earlier quoted context omitted.

What is the argument for a duopoly when Kimi and Deepseek models are only months behind? It’s a commodity in the making.

That's certainly how it looks right now but where's the guarantee? What happens if it turns out that deep learning on its own can't achieve AGI but someone figures out a proprietary algorithm that can? That sort of thing. Metaphorically we're a bunch of tribesmen speculating about the future potential outcomes of the space race (ie the impacts, limits, and timeline of ASI).

Imagine such an AI exists. What good is AI that is so good that you cannot sell API access because it would help others to build equivalently powerful AI and compete with you?

If you gatekeep, you will not make back the money you invested. If you don't gatekeep, your competitors will use your model to build competing models.

I guess you can sell it to the Department of War.

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