I'm not foolish enough to say that AI is not economically viable. But these two companies specifically, OpenAI and Anthropic, just seem totally screwed. They're making great revenue, but their expenditure is unbelievably irresponsible (actually, their behaviour across the board is irresponsible). Training, testing, and marketing should not be this expensive.
I'm looking forward to the new wave of companies that will likely pick up after them, and engage in much more responsible business practices. These two have got to go.
$72B of Anthropic's loss was on the paper value of financial instruments, though. Their operating loss, including non-recurring engineering/development costs, was under $9B. That's still not great, given $16B in revenue over half a year, even if that was 15x the prior-year revenue. Future infrastructure spending is the one place that they look overexposed: $600B in promised spend over the next decade, mostly not cancelable.
- Google will win the retail/free AI space and they can afford to offer Gemini for free for ever
- Anthropic will win Enterprise AI, but at very high costs and based on the dependency of their customers onto them, after the trap snaps: I expect a Claude seat for 1000+/month
I'm looking forward to the new wave of companies that will likely pick up after them, and engage in much more responsible business practices. These two have got to go.
There's not enough moat and the open models just have to be good enough for people to cheap out.
https://news.ycombinator.com/item?id=50171966
- Google will win the retail/free AI space and they can afford to offer Gemini for free for ever
- Anthropic will win Enterprise AI, but at very high costs and based on the dependency of their customers onto them, after the trap snaps: I expect a Claude seat for 1000+/month