As we’ve seen from the leaked Anthropic prospectus, revenue from actual users is a pittance. What really matters is what you can get from investors, and that you have a model smart enough for self-improvement.
Their profit on that was reportedly $559 million. But, this is after you realize that Anthropic got a discount on May/June from their new agreement with xAI's Colossus data center. So their first profit positive quarter happened during the time when their costs were artificially lower than they will be going forward.
Lots of people seem to love to do the simplest extrapolation that benefits their point. It's the same with "AI is improving at rate X, therefore if we linearly extrapolate, we'll hit AGI in a year."
I could start a business with a similar growth trajectory. We can mail people $100 bills for a low low payment of $10. I just need $500 billion dollars of startup capital and I can show you a 10x yoy growth for a few years.
That sounds fun but this is people paying for real products and services. The demand is there (and it's growing faster than any other commercial technology in history). They just need to work on inference (and potentially training) costs. I think that's clearly achieveable.
For the record, growth plays have been common in Silicon Valley for many decades. It's how we ended up with all the major tech companies we see today. Of course, it's high risk, high reward.
If they, through standard accounting practices, cannot show they are profitable how do we know they are profitable? I assume they can't just say "we are profitable assuming you ignore the costs we paid to build up XYZ". I'm guessing they could pre - rent compute for 10 years or something and maybe that's all on the balance sheet but you'd just amortize that and I think that falls under GAAP?
Oh spare me the pedantry. What else are you going to compare? The year-on-year for Q2? That’s certainly going to have a much higher multiplier.
Your guess is as good as mine on whether these companies will continue growing, stall, or decline. Don’t try to pretend your methodology is more sound though.
