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How much Anthropic and Cursor spend on Amazon Web Services

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Re: How much Anthropic and Cursor spend on Amazon Web Services

#61

Post by ai-x »

AznHisoka wrote: post #53
ai-x wrote: post #32

Just a reminder, Ed Zitron is neither an AI researcher, nor an Engineer, nor a Financial Analyst, nor an Economist nor an Insider and has ZERO clue in multiple dimensions (technology, investing, unit economics, growth, TAM) to analyze any of this

>> nor a Financial Analyst, nor an Economist Those people arent exactly experts or right most of the time either

If Ed is neutral or an expert, he would have had the following analysis

"What is the unit cost of serving a Token? It is the cost of electricity + amortized cost of GPU (GPUs would have been Capex, but because of their fast depreciation rate, you can claim they should be Opex). Given this cost structure, every SOTA labs (Google, Anthropic and OpenAI) are profitable and actually have high unit margins of 50-60%."

High Unit Margins and growth means, these labs can be profitable anytime they choose to

Re: How much Anthropic and Cursor spend on Amazon Web Services

#62

Post by jcheng »

thewebguyd wrote: post #52
lesuorac wrote: post #20

Earlier quoted context omitted.

They survived the dot-com bubble, I don't see the AI bubble taking out Amazon. It might take out your 401k for a decade.

I don't think anyone is expecting Amazon (or Google or Microsoft for that matter) to be taken out by the AI bubble. I would expect to see OpenAI, Anthropic, and a lot of the little tool wrappers to get taken out though, or at least acquired for pennies on the dollar when it bursts. But like the last one, it's going to be us, the tax payers, that are left holding the bag.

Why taxpayers? Where’s the systemic risk in AI labs getting acquired for cents on the dollar? The taxpayers weren’t holding the bag during the dot com crash, just investors.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#63

Post by LetsGetTechnicl »

infecto wrote: post #31
LetsGetTechnicl wrote: post #24

Earlier quoted context omitted.

Ed's mentioned ARR in previous articles and it's not a "generally accepted accounting principle". They cherry pick the highest monthly revenue number and multiply that by 12, but that's not their actual annual revenue.

Eh, when you have a company that’s growing, picking the highest and annualizing it is sensible. If we had a mature company with highly seasonal revenue it would be dishonest.

I mean I think there are instances where OpenAI's revenue is seasonal. Lots of students using it during the school year and cancelling it during summer.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#64

Post by omnicognate »

dcre wrote: post #28
Kuinox wrote: post #14

Earlier quoted context omitted.

I could find an ARR for Cursor of $500M. Why do they they in this article that Cursor is loosing with this spending number ?

The article Zitron links says Cursor has single-digit millions of cash burn with about $1B in the bank (as of August). Assuming that is true, they are losing money but have a long runway. https://www.newcomer.co/p/cursors-popularity-has-come-at-a

Single-digit cash burn on AWS, which the article says is only a small part of its compute, with the majority coming from Anthropic.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#65

Post by LetsGetTechnicl »

dcre wrote: post #26
LetsGetTechnicl wrote: post #24

Earlier quoted context omitted.

Ed's mentioned ARR in previous articles and it's not a "generally accepted accounting principle". They cherry pick the highest monthly revenue number and multiply that by 12, but that's not their actual annual revenue.

"Cherry pick the highest" is misleading. If your revenue is growing 10% a month for a year straight and is not seasonal, picking any other than the most recent month to annualize would make no sense.

Well people like Sam Altman have not been entirely honest and there's a reason they're not sharing their actual revenue numbers. If they could show they were growing 10% every month they would.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#66

Post by dcre »

omnicognate wrote: post #64
dcre wrote: post #28

Earlier quoted context omitted.

The article Zitron links says Cursor has single-digit millions of cash burn with about $1B in the bank (as of August). Assuming that is true, they are losing money but have a long runway. https://www.newcomer.co/p/cursors-popularity-has-come-at-a

Single-digit cash burn on AWS, which the article says is only a small part of its compute, with the majority coming from Anthropic.

That article says "Anysphere runs pretty lean with around 150 employees and has a single digit monthly cash burn, a source tells me." That would be total cash burn, i.e., net losses. If their AWS bill is bigger than that it's because they are making up for part of it with revenue.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#67

Post by throwaway290 »

username223 wrote: post #55
daft_pink wrote: post #3

I think this is a minor speed bump and VC’s believe that cost of inference will decrease over time and this is a gold rush to grab market share while cost of inference declines. I don’t think they got it right and the market share and usage grew faster than inference dropped, but inference costs will clearly drop and these companies will eventually be very profitable. Reality is that startups like this assume moore’s…

Color me skeptical. We're running into the speed of light when it comes to transistor size, and the parallelism that made neural nets take off is running into power demands. Where do the exponential hardware gains come from? Optimizing the software by 2x or 4x happens only once. Then there's the other side: if Moore's Law works too well, local models will be good enough for most tasks, and these companies won't be ab…

One improvement is from scraping and stealing better quality IP to train on. And they can just ride Moore's law until they profit then lobby governments to require licenses for fast GPUs because of national security.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#68

Post by rglover »

Frieren wrote: post #7
daft_pink wrote: post #3

I think this is a minor speed bump and VC’s believe that cost of inference will decrease over time and this is a gold rush to grab market share while cost of inference declines. I don’t think they got it right and the market share and usage grew faster than inference dropped, but inference costs will clearly drop and these companies will eventually be very profitable. Reality is that startups like this assume moore’s…

> I think this is a minor speed bump and VC’s believe that cost of inference will decrease over time and this is a gold rush to grab market share while cost of inference declines. It could also be that you give too much credit to the market. People follow trends because in most cases that makes money. There is no other deeper though involved. Look at the financial crisis, totally irrational.

This. Post-crypto, AI was the obvious next gambit for VC. Their money flows to hype, not product. The second that hype starts to fade and the money dries up, VCs will be running with their Harold Hill trunk full of cash toward the border. Just from the content they publish alone you can tell they're channeling their inner Barnum & Bailey in between Ayahuasca seizures.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#69

Post by omnicognate »

dcre wrote: post #66
omnicognate wrote: post #64

Earlier quoted context omitted.

Single-digit cash burn on AWS, which the article says is only a small part of its compute, with the majority coming from Anthropic.

That article says "Anysphere runs pretty lean with around 150 employees and has a single digit monthly cash burn, a source tells me." That would be total cash burn, i.e., net losses. If their AWS bill is bigger than that it's because they are making up for part of it with revenue.

Ah, gotcha. I misunderstood your comment.

Re: How much Anthropic and Cursor spend on Amazon Web Services

#70

Post by throwaway290 »

almostgotcaught wrote: post #44
dzonga wrote: post #29

One day we will westerners will learn why the Chinese are releasing models that are optimized for cost of training n yet good enough to run locally or cheaply. when the music stops, suddenly a lot of people won't just sit on the ground but plunge into the depths of hell.

i'm starting a new trend: ask every person that is so certain about the negative outlook how big their short position is. so how big is your short position? please let us know.

here's another trend: every time a person is on this hype bandwagon ask them how much are they invested in nvidia/ms/openai/etc

I am not invested in anything except popcorn to watch it burst;)

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