zlacker

Anthropic may be losing money, but a company with $7bn revenue run rate (https://www.anthropic.com/news/statement-dario-amodei-americ...) is a whole lot healthier than a company with a revenue of 0.

>>simonw+(OP)
If I had the cash, I could sell dollar bills for 50 cents and do a $7b run rate :)

>>tyingq+s5
If that was genuinely happening here - Anthropic were selling inference for less than the power and data center costs needed to serve those tokens - it would indeed be a very bad sign for their health.

I don't think they're doing that.

Estimates I've seen have their inference margin at ~60% - there's one from Morgan Stanley in this article, for example: https://www.businessinsider.com/amazon-anthropic-billions-cl...

>>tyingq+s5
Surely you understand the bet Anthropic is making, and why it's a bit different than selling dollars at a discount

>>simonw+T6
The leaders of Anthropic, OpenAI and DeepMind all hope to create models that are much more powerful than the ones they have now.

A large portion of the many tens of billions of dollars they have at their disposal (OpenAI alone raised 40 billion in April) is probably going toward this ambition—basically a huge science experiment. For example, when an AI lab offers an individual researcher a $250 million pay package, it can only be because they hope that the researcher can help them with something very ambitious: there's no need to pay that much for a single employee to help them reduce the costs of serving the paying customers they have now.

The point is that you can be right that Anthropic is making money on the marginal new user of Claude, but Anthropic's investors might still get soaked if the huge science experiment does not bear fruit.

>>simonw+T6
but those AI/ML researchers aka LLM optimization staff are not cheap. their salaries have skyrocketed, and some are being fought for like top-tier soccer stars and actors/actresses

>>mgfist+Q7
Because discounted dollar bills are still a tangible asset, but churning language models are intangible?

>>holler+19
> their investors might still take a bath if the very-ambitious aspect of their operations do not bear fruit

Not really. If the technology stalls where it is, AI still have a sizable chunk of the dollars previously paid to coders, transcribers, translators and the like.

>>simonw+T6
>The bank's analysts then assumed Anthropic gross profit margins of 60%, and estimated that 75% of related costs are spent on AWS cloud services.

Not estimate, assumption.

>>simonw+(OP)
Idk, I’m no business expert by any means, but I’m a hell of a lot more _scared_ by a company burning so much that’s $7b is still losing

>>tyingq+s5
You are saying that you can raise $7b debt at double-digit interest rate. I am doubtful. While $7b is not a big number, the Madoff scam is only ~$70b in total over many years.

>>liuliu+ne
No, I'm scamming myself. Halving my fortune because I believe karma will somehow repay me ten fold some time later.

>>simonw+T6
I've been wondering about this generally... Are the per-request API prices I'm paying at a profit or a loss? My billing would suggest they are not making a profit on the monthly fees (unless there are a bunch of enterprise accounts in group deals not being used, I am one of those I think)

>>simonw+T6
They had pretty drastic price cuts on Opus 4.5. It's possible they're now selling inference at a loss to gain market share, or at least that their margins are much lower. Dario claims that all their previous models were profitable (even after accounting for research costs), but it's unclear that there's a path to keeping their previous margins and expanding revenue as fast or faster than their costs (each model has been substantially more expensive than the previous model).

>>viscan+kj
It wouldn't surprise me if they found ways to reduce the cost of serving Opus 4.5. All of the model vendors have been consistently finding new optimizations over the last few years.

>>tyingq+s5
you have anthropic confused with something like lovable.

anthropic's unit margins are fine, many lovable-like businesses are not.

>>1shoon+rb
If Morgan Stanley are willing to stake their credibility on an assumption I'm going to take that assumption seriously.

>>mgfist+Q7
Maybe for those of us not-too-clever ones, what is the bet? Why is it different? Would be pretty great to have like a clear articulation of this!

>>tyingq+Zf
Somehow? I've been keeping an eye on my inbox, waiting to get a karma vesting plan from HN, for ages. What's this talk of somehow?

>>simonw+Zo
Calling this unmotivated assumption an "estimate" is just plain lying though, regardless of the faith uou have in the source of the assumption.

>>Siempr+rs
I've seen a bunch of other estimates / claims of a %50-60 margin for Anthropic on serving. This was just the first one I found a credible-looking link I could drop into this discussion.

The best one is from the Information, but they're behind a paywall so not useful to link to. https://www.theinformation.com/articles/anthropic-projects-7...

>>simonw+Zo
This is pretty silly thing to say. Investment banks suffer zero reputational damage when their analysts get this sort of thing wrong. They don’t even have to care about accuracy because there will never be a way to even check this number, if anyone even wanted to go back and rate their assumptions, which also never happens.

>>skywho+kt
Fair enough. I was looking for a shortcut way of saying "I find this guess credible", see also: >>46126597

>>1shoon+rb
Those are estimates. Notice they didn’t assume 0% or a million %. They chose numbers that are a plausible approximation of the true unknown values, also known as an estimate.

>>viscan+kj
I sure hope serving Opus 4.5 at the current cost is sustainable. It’s the first model I can actually use for serious work.

>>liuliu+ne
> the Madoff scam is only ~$70b in total

Incorrect - that was the fraudulent NAV.

An estimate for true cash inflow that was lost is about $20 billion (which is still an enormous number!)

>>beepbo+5p
The bet, (I would have thought) obviously, is that AI will be a huge part of humanity’s future, and that Anthropic will be able to get a big piece of that pie.

This is (I would have thought) obviously different from selling dollars for $0.50, which is a plan with zero probability of profit.

Edit: perhaps the question was meant to be about how Bun fits in? But the context of this sub-thread has veered to achieving a $7 billion revenue.

>>shwaj+5I
The question is/was about how they intend to obtain that big piece of pie, what that looks like.

>>simonw+(OP)
I am fairly skeptical about many AI companies, but as someone else pointed out, Anthropic has 10x'ed their revenue for the past 3 years. 100m->1b->10b. While past performance no predictor of future results, their product is solid and to me looks like they have found PMF.

>>mritch+Mo
Or I'm just saying revenue numbers alone don't prove anything useful when you have deep pockets.

>>simonw+(OP)
They don't need revenue, they need a community. I don't know how this acquisition will affect that.

>>beepbo+KJ
Do you know any translators? They all pretty much lost much of their clients.

Devs can write at a very fast rate with ai.

>>throwa+1n1
Machine translations are really good now. Early on I would translate the same sentence back and forwards while "engineering" the "prompt".

You still need to check it or at least be aware it's a translation. The problem of extra puns remains.

我不会说任何语言，我否认一切

>>simonw+Zo
Cope detected. Classification code: ANT

>>beepbo+5p
The bet is that revenue keeps growing and unit economics turn positive (which you can't do if you sell a dollar, since no one will give you more than a dollar for it)