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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

#71

Post by oliwarner »

JCM9 wrote: post #48
rs186 wrote: post #30

Earlier quoted context omitted.

Amazon trained their own models like Nova and has AI coding assistants like Amazon Q, but I don't know anyone outside Amazon who is using them.

Yes, the Amazon AI stuff isn’t great. They don’t really have the right leadership or talent to do anything particularly competitive there.

Why do they need to compete? AI at Amazon should be laser-focussed on two things: selling compute time to AI Wannabees, and up-selling stuff to me in the shop.

Everything else is expense.

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

#72

Post by baggachipz »

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

An 18 hour old account, named suspiciously like an ai model company, trying to discredit a prominent AI skeptic.

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

#73

Post by infecto »

LetsGetTechnicl wrote: post #63
infecto wrote: post #31

Earlier quoted context omitted.

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.

I think you missed the forest for the trees. I am sure the student population has some dropoff during summer months but the point is that for businesses that a growing month over month which most of these have since creation, you take the highest number (latest) and annualize it.

I am also willing to bet that the student dropoff is not pronounced. I am more thinking of a business that sells beach umbrellas, they make a lot of sales in the summer months and then next to nothing in the winter months. That would be dishonest.

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

#74

Post by tecleandor »

ai-x wrote: post #58
disgruntledphd2 wrote: post #37

Earlier quoted context omitted.

Correct. And yet, he's provided some of the most level headed takes on the current LLM boom, to the point where FT Alphaville link to his analysis of the economics.

The jury is still out there if his analysis are level-headed or not. He says things that *some* people want to hear, but that's not level-headed E.g 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…

> If he is level-headed, show me an Ed article that is positive about AI

Why should those two things go together?

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

#76

Post by dcre »

mossTechnician wrote: post #51
dcre wrote: post #26

Earlier quoted context omitted.

"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.

If a company's revenue in January is $100 and it grows by 10% every month, the December revenue is $285. The year's revenue would be about $2,138, but ARR in December would be $3,423. That's 1.6x the actual revenue. ARR could be a useful tool to help predict future revenue, but why not simply report on actual revenue and suggest it might increase in the next year? I have found the most articles to be unclear to the r…

Why is the calendar year the relevant unit? If you insist on years, then if you consider the year from June to June, $2,138 would be misleading small.

The point of ARR is to give an up to date measure on a rapidly changing number. If you only report projected calendar year revenue, then on January 1 you switch from reporting 2025 annual revenue to 2026 projected revenue, a huge and confusing jump. Why not just report ARR every month? It's basically just a way of reporting monthly revenue — take the number you get and divide it by 12.

I am really skeptical that people are being bamboozled by this in some significant way. Zitron does far more confusing things with numbers in the name of critique.

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

#77

Post by LetsGetTechnicl »

dcre wrote: post #76
mossTechnician wrote: post #51

Earlier quoted context omitted.

If a company's revenue in January is $100 and it grows by 10% every month, the December revenue is $285. The year's revenue would be about $2,138, but ARR in December would be $3,423. That's 1.6x the actual revenue. ARR could be a useful tool to help predict future revenue, but why not simply report on actual revenue and suggest it might increase in the next year? I have found the most articles to be unclear to the r…

Why is the calendar year the relevant unit? If you insist on years, then if you consider the year from June to June, $2,138 would be misleading small. The point of ARR is to give an up to date measure on a rapidly changing number. If you only report projected calendar year revenue, then on January 1 you switch from reporting 2025 annual revenue to 2026 projected revenue, a huge and confusing jump. Why not just report…

Because that's a part of the generally accepted accounting principles: https://www.rightrev.com/gaap-revenue-vs-arr/

Nobody considers a year from June to June because that would be misleading.

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

#78

Post by LetsGetTechnicl »

infecto wrote: post #73
LetsGetTechnicl wrote: post #63

Earlier quoted context omitted.

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.

I think you missed the forest for the trees. I am sure the student population has some dropoff during summer months but the point is that for businesses that a growing month over month which most of these have since creation, you take the highest number (latest) and annualize it. I am also willing to bet that the student dropoff is not pronounced. I am more thinking of a business that sells beach umbrellas, they make…

Then why aren't AI companies reporting their actual monthly revenues?

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

#79

Post by dcre »

LetsGetTechnicl wrote: post #77
dcre wrote: post #76

Earlier quoted context omitted.

Why is the calendar year the relevant unit? If you insist on years, then if you consider the year from June to June, $2,138 would be misleading small. The point of ARR is to give an up to date measure on a rapidly changing number. If you only report projected calendar year revenue, then on January 1 you switch from reporting 2025 annual revenue to 2026 projected revenue, a huge and confusing jump. Why not just report…

Because that's a part of the generally accepted accounting principles: https://www.rightrev.com/gaap-revenue-vs-arr/ Nobody considers a year from June to June because that would be misleading.

That is an article explaining why ARR is useful and important despite not being the same thing as GAAP revenue.

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

#80

Post by mossTechnician »

dcre wrote: post #76
mossTechnician wrote: post #51

Earlier quoted context omitted.

If a company's revenue in January is $100 and it grows by 10% every month, the December revenue is $285. The year's revenue would be about $2,138, but ARR in December would be $3,423. That's 1.6x the actual revenue. ARR could be a useful tool to help predict future revenue, but why not simply report on actual revenue and suggest it might increase in the next year? I have found the most articles to be unclear to the r…

Why is the calendar year the relevant unit? If you insist on years, then if you consider the year from June to June, $2,138 would be misleading small. The point of ARR is to give an up to date measure on a rapidly changing number. If you only report projected calendar year revenue, then on January 1 you switch from reporting 2025 annual revenue to 2026 projected revenue, a huge and confusing jump. Why not just report…

You're correct, ARRs can be both misleading and for any 12-month period (I just chose a year to simplify), but the problem is AI companies tend to only release their latest ARR, and only selectively, which I believe is misleading in the opposite direction.
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