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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

#101

Post by throwup238 »

dweekly wrote: post #81
throwup238 wrote: post #58

Earlier quoted context omitted.

> If they built it themselves and missed projections it's a much more expensive mistake Not if their pricing comes with multiyear commitments for reserved pricing. No doubt they get a huge volume discount but the advertised AWS reserved pricing is already enough for pay for a whole 8x HX00 pod plus the NVIDIA enterprise license plus the staff to manage it after only a one year commitment. On-demand pricing is signifi…

The pricing models that are published on AWS' website almost certainly have almost nothing to do with the pricing models that are discussed behind closed doors for a $100 billion commitment.

Of course not, but unless they’re getting the sweet heart deal of a lifetime from Amazon of all places, it’s still a hogwash. We’re talking about enough capital to build their own fab and a dozen datacenters*. This deal isn’t going to be buying existing capacity because that’s already stretched, it will be paying for new buildouts.

Afterwards Amazon will be milking the machines these commitments buy for nearly a decade. That tradeoff makes sense at a small scale (even up to $X00 million or even billions), but at $Y0 or $Z00 billion?

Color me skeptical. There are plenty of other side benefits like upgrading to the newest GPUs every few years, but again we’re talking about paying for new buildouts with upfront commitments anyway.

* obviously the timelines, scientific risk, and opportunity cost make this completely infeasible but that’s the scale we’re talking about. It’s a major industrial project on the scale of the thirty year space shuttle program (~$200 billion).

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

#103

Post by 0xbadcafebee »

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…

There is no money or time left to build a $100B stack. All private capital is tapped and banks know it's too risky. They have no choice but to rent.

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

#105

Post by 0xbadcafebee »

MrBuddyCasino wrote: post #100
MeetingsBrowser wrote: post #74

Earlier quoted context omitted.

Going from a company with no experience building and operating datacenters to a company with 100B worth of compute is a multi-decade high risk goal.

xAI built a datacenter in a few weeks, if I remember correctly.

And they used illegal power to do it (which will now give local poor people health disorders at 4x the national average). They likely violated every law possible in the process, like OSHA standards, overtime. Musk loves to overwork people.

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

#106

Post by IMTDb »

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 with the local power utility. Fingers crossed the political landscape doesn't shift and your CEO doesn't sign a contract with an army using your product to pick bombing targets, because you'll watch those permits evaporate fast.

Then there's sourcing: CPUs, GPUs, memory, networking. You need all of it. Did you know the lead time for an industrial power transformer is 5+ years? Don't get me started on the water treatment pumps and filters you can't even get permitted without. What will you do in the meantime ? You surely aren't gonna get preferential treatment from AWS / Google / ... if they know you are moving away anyway. Your competition will.

The risk and complexity are just too big. AI/LLM is already an incredibly complex and brittle environment with huge competition. Getting distracted building data centers isn't enticing for these companies, it's a death sentence.

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

#107

Post by MeetingsBrowser »

MrBuddyCasino wrote: post #100
MeetingsBrowser wrote: post #74

Earlier quoted context omitted.

Going from a company with no experience building and operating datacenters to a company with 100B worth of compute is a multi-decade high risk goal.

xAI built a datacenter in a few weeks, if I remember correctly.

xAI built the Colossus data center in 122 days (just the physical construction time).

Colossus initially had ~200k GPUs. 100B buys you ~1 million high end GPUs running 24/7 for a year at AWS retail prices.

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

#108

Post by neya »

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…

I remember seeing this extremely shocking graph of top AI companies on Facebook on how the money just keeps changing hands between a handful of companies. Almost seemed like a scam.

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

#109

Post by Aurornis »

MrBuddyCasino wrote: post #100
MeetingsBrowser wrote: post #74

Earlier quoted context omitted.

Going from a company with no experience building and operating datacenters to a company with 100B worth of compute is a multi-decade high risk goal.

xAI built a datacenter in a few weeks, if I remember correctly.

That’s PR hype. They built it quickly, but they didn’t go from deciding they wanted a data center to having it running in weeks.

You can’t even get the hardware at that scale without months or years of order lead time. NVidia doesn’t have warehouses full of compute hardware waiting for someone to come get it.

They also reused an existing building. Basically, they put 100,000 GPUs into a building and attached the necessary infrastructure in about half a year. Impressive, but it’s not the same as a $10B/year data center usage commitment like this deal.

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