Posted by JumpCrisscross 1 day ago
This feels wrong in several ways:
a) they're certainly not addressing their customers like they're compute-limited. One must ask, what would that look like? For one, I think it'd look like a wait list to sign up. It'd look like prices going _higher_, and not lower
b) IIUC, their revenues don't cover their _current_ compute costs. So, let's pretend coreweave magics up a new dc and hands it over to anthropic, which means presumably anthropic needs to start paying for it. How does that affect anthropic's revenue? AFAICT, it just adds costs, it doesn't make their revenue go up.
The only interpretation I can find is if Anthropic is _convinced_ that they need to train faster/harder, and that doing so would somehow significantly shift their TAM or costs, for example by coming up with a model that was simply 10+ years ahead of anyone else that costs the same as opus 5.5 to run, and they instantly nab the entirety of openai's market share. Seems pretty unlikely.
But you’re right. I have often wondered why it is that such a small amount of extra compute (300MW) from SpaceX was entirely enough for them to uncap so many customers.
I think the (in-house) data centre burdens of ever-more complex models may be considerable, but I think the data centre businesses expecting to serve inference tasks are probably heading into a Chinese real estate bubble.
I think about this because I pay $100/mo for Fable. How much more would I be willing to pay? I'm not sure yet. It depends on how smart the AI in the future becomes.
Whether it's Anthropic or not, I think it's inevitable some highly specialized offerings will emerge. I suspect there are already some incredibly sophisticated, hyper-narrow, astronomically expensive models being created for private in-house use.
As an imaginary example, I wouldn't be shocked if some company like Jane Street is secretly investing a billion dollars to create the highly specialized synthetic RLVR data needed to train an AI that gives them an average .08% edge on a certain kind of commodity, equity or asset trade. If so, it's not a leap to imagine another company spending $100M on a model that gives a .008% edge and selling access to 100 high-volume institutional traders for $2M each.
Expanding general purpose LLMs to incorporate increasingly specific use cases has, so far, seemed to be economically viable but I don't see a fundamental reason that must remain true for incredibly narrow yet ultra high-value domains requiring monumental bespoke development, data, etc to profitably exploit.
The crazy thing is ... it's not imaginary, nor is secret, it's literally a video on YouTube from five months ago - https://www.youtube.com/watch?v=8J-GUnfSqeE (though that facility is only showing of ~$200 million worth of compute).
Already they have exclusive deals with trading firms who pay $$$ for faster models and more features. But there are only so many firms who will pay that much (and a lot of companies are pulling back on spend, not increasing it)
Thing is - regular people have no clue what to do with it since they are locked in ecosystems of apple and google.
Everyone has to get capital efficient now — and fast!
WeWork was renting cubicles and calling it technology.
Whatever you think about this market, the LLM technology is real, obviously important, and Anthropic is the market leader. The only similarity is that they’re both famous and well-funded.
Sure, they have some flashy models, harnesses, and tooling around it, but their competition isn't that far behind - and some of that competition is 100% free. Their moat is closer to a puddle, to the point that there are entire companies built around the concept of dynamically routing requests either to them or their competitors.
Anthropic is the market leader in a rapidly-evolving market, where customers can and will jump ship the second a competitor's model looks shinier or cheaper.
While you can imitate the style of my response by ignoring all of the technical details, you've still ignored all of the details.
WeWork was not a technology company. Anthropic is. You even admit it, but you want to hide your actual argument ("the technology is a commodity") behind an irrelevant rhetorical flourish.
It's fine to argue that Anthropic's business is bad. You don't need to make a ridiculous, unsuitable metaphor on top of it.
The problem with WeWork's IPO wasn't that they aren't a tech company. It's that they didn't have a good enough business model.
AFAICT, the only one who cares about whether Anthropic, or WeWork, is a technology company, is you.
> The problem with WeWork's IPO wasn't that they aren't a tech company. It's that they didn't have a good enough business model.
No, they had a fine business model - there are many other companies using it today (including WeWork). It just wasn't worth a technology company multiple.
(Let's also not forget the mountain of crazy things - such as the founder leasing his own properties to the company at sweetheart rates - in the WeWork S1, that actually torpedoed the offering. Anthropic's listing is nothing like WeWork. Nothing. Not even remotely.)
Yes. Personally I'd prefer the US government get its stake from a bankruptcy court for pennies on the dollar.
It was worth $8.9 billion when the US govt got it "for free". It's worth $23B today, even after the big drops recently. How is the US public worse off?
Implying something with context is just about as bad as saying it outright, so hunter2-ing your swears doesn't save you as much as dropping it altogether.
Microsoft has already proven that they do not have the software chops to deliver this. Even if they had the right product managers and UI experts, MS management would torpedo the project and ensure that it gets zero adoption.
And AWS has zero software capability in that regard.
This is going to sound tautological but of course it's not the same, because it's different?
Participants in markets make their own choices from the available options, for their own reasons.
Another way to frame my point is this: not the same for whom? You are but one market participant, and it's at least wobbly thinking for any of us to assume that our set of needs is the archetype.
There's any number of harnesses and people have any number of preferences. Sure, overchoice of imperfect substitutes tends to entrench better-resourced, better-resourced (or better-marketed) alternatives, but it's not a slam dunk. Things come out of left field all the time.
(I mean from my own perspective, I like Pi — more than OpenCode. And the "betterness" of Claude or Codex over Pi, or their models over even Muse Glimmer or Qwen, is completely irrelevant to where I am now in terms of the needs I have. So I don't use either of them and I remain unfazed. When my needs change I will revisit, but the theoretical superiority of these products for the majority of users just isn't a factor in my decision, just like I don't care that any tool I use might not be the best for most people. You might think me insane but I'm no less a rational market participant than you.)
In many ways, I prefer to use other models through Pi.
They are extremely capable, much cheaper than Claude, and can get the job done for the software development tasks I use AI for. (Quite a lot these days)
Despite being awful in so many ways, Microsoft Office continues to dominate. It's a "competitive edge" because is has the trust of corporate customers. There are many competitors, but everybody is used to the main one already, and it's "good enough".
Seeing this bubble play out in real time is the most surreal thing. It's like watching a train wreck play out at a speed of a few inches per day. Like come on, just get off the track FFS.
Even at $3k, this is something that was simply impossible without a super-computing cluster just a year or two ago. That's a multiple orders of magnitude drop in price.
Have you tried requesting GPU instances on Gcloud without being associated with a major institution? Yeah, good luck.