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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

#651

Post by zrn900 »

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.

> I really think everyone will look back at this time as the golden area of cheap AI.

Chinese models like Deepseek v4 are as good and 10 times cheaper. You can even run Deepseek locally. So no, cheap AI wont be over. Just the US investors won't be able to profit off of the artificial bubble that is there now but wont be in the future.

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

#652

Post by zrn900 »

cromka wrote: post #148

Anyone else has an increasing feeling that all the AI hype is turning into a "Dot-Com Bubble x 2008 Credit Default Swaps" collab?

It's a mathematical reality rather than 'feeling'. It has become that a few years ago. It becomes even more serious when you consider that the Chinese models are just as good, and they are being just given away to run locally like Deepseek.

Why should anyone feed the SV AI bubble if they can just use cheap Chinese models, even locally if they want to...

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

#653

Post by renticulous »

dragonwriter wrote: post #520
zarzavat wrote: post #500

Earlier quoted context omitted.

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.

> 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? Its awesome and world dominating, you just don’t sell access to that AI, you instead directly, by yourself, dominate any field that better AI provides a competitive advantage in as soon as you can afford to invest the capital to otherwise operate in that field, and you…

To dominate the real world, you need correcting feedback loop from reality. These feedback loops and regulations (in medical and other industries) take long time to come back with good signals. So you are still time bound by how fast your experiments are.

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

#655

Post by liendolucas »

datavirtue wrote: post #620
netcan wrote: post #596

Earlier quoted context omitted.

It's just hard to tell the difference between "real" demand and "circular." That's the concern. PG had an essay about this during the dotcom, when he worked at yahoo. Iirc...Yahoo's share price and other big successes in the space attracted investment into startups. Startups used that money to advertise on yahoo. Yahoo bought some of these the startups. So... a lot of the revenue used to analyze companies for investm…

I'm starting to transition how we build software at our company due to the power of AI. No more: five code monkey contractors under a lead. Two top-notch devs are all that is needed now, unrestrained by sprints and mindless ceremonies. There is going to be a giant sucking sound in India. I can't continue the current model. The dev that gets AI is done in five hours, the ones that don't are thrashing for the next two…

And the day you don't have that drug what do you do? If anything you are training people to become dependent on one or more subscription services.

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

#656

Post by netcan »

datavirtue wrote: post #620
netcan wrote: post #596

Earlier quoted context omitted.

It's just hard to tell the difference between "real" demand and "circular." That's the concern. PG had an essay about this during the dotcom, when he worked at yahoo. Iirc...Yahoo's share price and other big successes in the space attracted investment into startups. Startups used that money to advertise on yahoo. Yahoo bought some of these the startups. So... a lot of the revenue used to analyze companies for investm…

I'm starting to transition how we build software at our company due to the power of AI. No more: five code monkey contractors under a lead. Two top-notch devs are all that is needed now, unrestrained by sprints and mindless ceremonies. There is going to be a giant sucking sound in India. I can't continue the current model. The dev that gets AI is done in five hours, the ones that don't are thrashing for the next two…

Ok... but extrapolating from this to "whole market" paradigms is speculative.

The (imo) question isn't how you produce software, but what the value of this software is. Are you going to make make/better software such that customers pay more, or buy more? Are those customers getting value of this kind?

The answer may be yes. But... it's not an automatic yes.

Instead of programming think of accounting. Say you experience what you are experiencing, but as an accountant. 6 person team replaced by 2-3 hotshots.

So... Maybe you can sell more/better accounting for a higher price. But... potential is probably pretty limited. Over time, maybe business practices will adjust and find uses for this newly abundant capacity.

Maybe you lower prices. Maybe the two hotshot earn as much as the previous team.

If you are reducing team size, and that's the primary benefit... the fired employees need to find useful emplyment elsewhere in the economy for surplus value to be realized.

Mediating all this is the law of diminishing returns. At any given moment, new marginal resources have less productive value than the current allocation.

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

#657

Post by netcan »

mattmanser wrote: post #637
fauigerzigerk wrote: post #617

Earlier quoted context omitted.

>(a) it's ability/desire to make such investments is still driven by stock-driven optimism I don't think it has much to do with the stock price at all. Current platform oligopolists fear the rise of new platforms. They want a foot in the door for strategic reasons. What could happen is that frontier labs like Anthropic and OpenAI never become platforms and turn out to be providers of a largely commoditised, low margi…

But OpenAI/Anthropic are not selling the compute as they're buying that from Google/Amazon/etc. So they're selling the transformation, or the model. Or the ability to make a model. And their brand and their harness. And it seems like the model is definitely not worth 380 billion. Models depreciate incredibly fast. There are lots of models and the other models aren't that far behind. And it seems like the harness is n…

The technical task is not the business task... unless the task really is a commodity.

Coding facebook isn't rocket surgery either. Neither is Visa, Salesforce or many other tech-centric companies. Replicating their business model is.

Those are locked in by network effects. Path dependencies and suchlike can play a role. But... the upshot is that anthropic, open Ai and whatnot have the model people are using for work.

A government sponsored model isn't a bad thing to have, but I thing it's unlikely (but possible) that it will also be the product people want to use or the business that succeeds.

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

#658

Post by Spooky23 »

zymhan wrote: post #503
Spooky23 wrote: post #459

Earlier quoted context omitted.

GE Capital was a different creature, riding the line of fraud in some ways. They misapplied accounting rules and had to write down or capitalize over $20B for long term care insurance.

That's what brought them down, but that could bring down anyone. My point is that vendor financing turns non-finance companies into finance companies, and brings along a huge can of worms.

That’s fair. You become vulnerable to a guy like Jack Welch.

The vendor financing stuff I saw (as a junior / intern at a supplier) in those days was a reflection of that culture. They’d lease capital equipment through GE Capital, and pack it with other stuff to the limit of their accountants appetite for risk. (You can usually roll 20% of the value into services or peripheral stuff) I remember one deal where we had to run around and buy office supplies and tools with a corporate card. I did 4 Honda Civic of laser toner.

GE was reporting their own capital equipment and office supplies as revenue on the Capital side. :) But that is penny ante stuff in terms of what they did.

The AI stuff is a shady variation of that, but likely far worse as we’ve fired all of the watchers.

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

#659

Post by eolgun »

Interesting timing — most compliance tools in the enterprise space still treat AI infrastructure providers as black boxes. If Anthropic scales this way, SOC 2 and security questionnaires around AI vendors are going to become a much bigger deal for startups.

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

#660

Post by renticulous »

Spacemolte wrote: post #494
james2doyle wrote: post #309

Earlier quoted context omitted.

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 compe…

Going forward, models will start specializing. Anthropic will build a BioMed model for large drug companies. A math/compsci model for frontier theoretical research. A physics modelf or nuclear research. They can communicate each other for synergy effects e.g. for areas where math meets biomed etc. This will be cost reducing as well. We plebs don't need advanced models for our plumbing software work. Following example applied to AI capabilies will make it clear.

Does everyone need a graphing calculator? Does everyone need a scientific calculator? Does everyone need a normal calculator? Does everyone need GeoGebra or Desmos ?

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