Except that I'm not on the opposite side of the road. I've simply pointed out that the mechanics by which Anthropic could be viable long-term are pretty simple; not that this is what is going to happen.
Frankly, I don't think anyone can predict what will happen. This is a fast-moving, complicated stew of technology, finance and politics.
> My whole point is that this is unclear. Anthropic's S-1 mentioned how much that they paid for compute, but the rate they pay is totally opaque.
> If they pay near the market price this is a nothingburger. If they pay, say, half the market price, now we can see their already eye-watering training costs increase significantly and their high profit margins to suddenly not look as seductive anymore.
Pricing in commercial agreements is typically considered competitively sensitive and can be redacted from contracts filed with the SEC but only if it isn't material. Anthropic still has to disclose known trends that are likely to affect its results so if below-market compute were inflating its margins you'd expect to see that in the S-1.
The more detailed related-party disclosures probably aren't required yet because Amazon and Google mostly hold non-voting preferred stock and convertible notes. The S-1 says they'll each hold more than 5% after the IPO conversions. At that point, their transactions with Anthropic fall under the related-party rules so we'll learn a lot more after the IPO if there are any "issues" there.
> The more detailed related-party disclosures probably aren't required yet because Amazon and Google mostly hold non-voting preferred stock and convertible notes. The S-1 says they'll each hold more than 5% after the IPO conversions. At that point, their transactions with Anthropic fall under the related-party rules so we'll learn a lot more after the IPO if there are any "issues" there.
Whoa, that I really didn't know. Something for everyone to keep their eyes on then, because this is actually very opaque, and may dramatically change what we know about their numbers. Or not.
> People who are claiming that it's mathematically impossible are going on vibes.
You are doing the same thing you claim I am, just on the opposite side of the road.
In truth this is sentiment based on the current narratives.
To be clear, I don't think it is theoretically impossible to be able to recoup the cost of training by selling inference, but I do think it is impossible with the current rate new models have to be trained and with current cost they charge customers. I believe that they will have to increase prices pretty dramatically for this to make some sense.
> As a side note: if you really want to be exact, we'd need to know how compute purchased at below cost affects the income statement. If the below-market pricing was for compute related to training, it would not be the same on the income statement as compute related to inference. Whereas below-market pricing for inference compute would hit COGS and improve gross margins.
My whole point is that this is unclear. Anthropic's S-1 mentioned how much that they paid for compute, but the rate they pay is totally opaque.
If they pay near the market price this is a nothingburger. If they pay, say, half the market price, now we can see their already eye-watering training costs increase significantly and their high profit margins to suddenly not look as seductive anymore.
Again, my annoyance is how prople pretend that Anthropic has a clear path to become profitable because of ther incredible revenue growth and profit margins (even if you are not doing so, this is the pervasive narrative in forums like HN). I sustain that this is far from settled.