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

Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

reuters.com

Post reply on HN
Print view View original

291–300 of 306 posts

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#291

Post by erwald »

TheOtherHobbes wrote: post #61
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

They've replaced employees with compute, so RPE is irrelevant.

The point is that revenue is large and growing quickly, which is what the comment above mine denied

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#292

Post by erwald »

InsideOutSanta wrote: post #53
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

The revenue needs to be way, way higher than this to warrant the investment.

Maybe, but that's a different claim. You wrote that the improvements are "not translating to a dramatic increase in revenue", but going from about $1B to about $30B run rate in 16 months seems like a pretty dramatic increase to me!

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#293

Post by erwald »

serial_dev wrote: post #85
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

How is RPE relevant if they are spending hundreds of billions on compute and data centers?

It's relevant to the claim I was replying to, which was that revenue isn't growing, not to the question of whether the spending will pay off

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#294

Post by erwald »

Ekaros wrote: post #120
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

So they can add employees endlessly? And still make same revenue? Increasing employees only scale so far at those numbers.

No, I wasn't claiming that revenue scales with headcount, though it probably does to some extent. The point is that these companies' revenue is large and growing quickly, which is what the comment above mine denied.

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#295

Post by erwald »

dirkc wrote: post #153
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

Isn't that just saying CapEx is a bigger part of their costs as if that is a positive thing?

I wasn't saying anything about costs, only that revenue is growing quickly

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#296

Post by erwald »

toomuchtodo wrote: post #27
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

This assumes they do not have to increase prices to be profitable, and that they will continue to have customers when customers can switch to open models at similar performance. As an analogy, Uber could crank up rates after the VC growth play was over to stoke revenue and profits because they have a duopoly with Lyft. LLM consumers can switch to Kimi models fairly trivially today, and whatever the frontier open mode…

Those seem like reasonable questions about future margins and moats, but I was making the narrower point that revenue is in fact growing quickly, contra the comment above mine

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#297

Post by erwald »

icedrift wrote: post #34
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

Revenue isn't profit though. Anthropic is already profitable OpenAI financials have looked doomed for the past year

Right, and the comment I replied to was about revenue, not profit. (That said, while I don't think Anthropic is already profitable, it reportedly expects its first operating profit later this year.)

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#298

Post by erwald »

throwaway27448 wrote: post #29
erwald wrote: post #24

Earlier quoted context omitted.

"Anthropic and OpenAI generate a lot of revenue with relatively few employees – an estimated $9M and $5.5M in revenue per employee (RPE), respectively. If either company were to go public, it would have a higher RPE than any public tech company on Forbes’ Global 2000 list." https://epoch.ai/data-insights/revenue-per-employee-ai-compa...

Ah well we just need to convert our entire economy into an MLM and then I'm sure we'll be set

Lots of people paying for a product they use is more or less the opposite of an MLM

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#299

Post by InsideOutSanta »

wongarsu wrote: post #134
InsideOutSanta wrote: post #10

Earlier quoted context omitted.

The problem is that the dramatic improvement in capabilities is not translating to a dramatic increase in revenue.

Source? Has Anthropic's annualized revenue not quadrupled in the last 7 months? And OpenAI's annualized revenue quadrupled since January 2025? Which is only unimpressive by comparison to Anthropic's meteoric revenue growth I'd be with you if you claimed that the revenue hasn't translated into substantial profits. Being able to spend a lot of money to get less money back is not that impressive. But revenue by itself i…

> Anthropic's annualized revenue

That's not a meaningful number, and even if it were, quadrupled isn't nearly enough.

Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs

#300

Post by ethbr1 »

Laurel1234 wrote: post #225
tsoukase wrote: post #204

Earlier quoted context omitted.

Everyone that has invested even a dollar to AI believes the revenue will easily surpass the most optimistic predictions. Ask them.

Wonder if you can pay margin calls with belief.

No, but the rest of the market can cause you to avoid a margin call with its belief.
Post reply on HN