time is money so when the subsidies stop or they magically make inference price an afterthought like cloud did to traffic then it's going to be much more economically better to spend a one-time price setting up a local or a self hosted open model than paying $2000 for a subscription

The question isn’t whether Anthropic makes a good product. The question is whether it can rationally sustain multiples like this.

Yes, they have the same problem WeWork had on the multiple front. Coworking was a thing long before WeWork was a thing. It’s an important but boring business that trades at low multiples. WeWork tried to IPO on the basis that somehow it was worth vastly more, but the market woke up and realized it’s just subleasing office space.

The same is unfolding with Anthropic. It’s doing important work but everyone is realizing it’s not got a serious edge over anyone else. It’s important but ultimately a boring business. It’s still likely worth a few hundred billion, which is massively impressive for any startup, but trillions is pipe dream.

Great comparison.

The thing that makes the frontier labs frontier is mostly access to huge amounts of training data and compute. In the earlier days of AI access to top AI talent was a moat, but that moat is rapidly eroding as more and more people familiarize themselves with the "black magic" of LLMs and training. The success of the Chinese models is evidence of this diffusion of knowledge.

Give me a team of, say, 20 good engineers with a deep knowledge of AI/LLMs and training and give me a billion dollars worth of GPU compute and a huge amount of training data and I'll give you a frontier model.

No moat.