Mind blowing I know
If this was just OpenAI and Anthropic, this money would represent all of your salaries being soaked up and your job functions being privately consumed by two companies.
Fire three quarters of your eng staff and subscribe to Anthropic is a valid trillion dollar business. Scary to say, but that's the value prop on the filing.
Except that there's actually tons of competition and no moat. The math problems are just a distraction from that.
How on earth are you worth a fraction of that when there are a dozen Chinese companies doing the exact same, with half of them just giving away the goods for free?
Go nuts with it, but we're at the SciFi dystopia test with: how do mega corporations even form? Well, this is certainly the plausible reality, they just start aggregating random income streams because their product is essentially the only thing that makes the business profitable. Without it, it can't compete.
Hopefully this sounds skeptical, but I don't see how you can have an independent business and be entirely dependent on third party for your operations.
All businesses are reliant on multiple third parties doing their thing in order for the business to be viable. A lot of companies exist at the whims of Amazon or Walmart.
This isn't new though. A ton of software companies are already completely dependent on AWS or Azure or whatever.
Like a lumber mill that buys logs from a logging company? Who subcontracts to individual fallers? Who buy their chainsaws from a chainsaw company, their fuel from a petrochemical company? No business isn't entirely dependent on third parties. That's what it means to exist in a healthy economy.
A "farm-to-table" megacorp that owns everything from the source of every raw material through to the finished product is a nightmare, an entity that needs to be reigned in and broken up. Capitalism is a competitive game, but a game that can never be allowed to end.
I am rather sure that Google is heavily reliant on Microsoft and Apple to produce the operating systems used on devices that are in turn used to view Google's ads. And Microsoft is heavily reliant on hardware manufacturers (firmware is also software) to make the machines that Windows lives inside. And Apple is reliant upon a thousand and one companies that enable the innumerable mobile networks, which include many layers of non-apple software.
I don't disagree that Anthropic has no long term moat but they have been a LOT better than the Chinese models since the beginning.
As programmers, we're natural optimizers. And we frequently deliver solutions that aren't always the best, but just "good enough".
Guess what, the Chinese models, Mistral, Argon etc, aren't "good enough" for a lot of tasks. That's why people pay for Claude.
I was discussing with a coworker yesterday who pays $200/month for cursor, has never tried any other harness and mostly use grok, in rare occasions opus 5.5. He seems to be regularly out of tokens. I told him I exclusively use DS 4.1 flash with opencode, spend like 100-150M tokens a day including cache and it oneshots all my tasks without issues. I barely reach 20% of my $10 sub at the end of the month. From his look I think he didn't believe me.
It's pretty slow, but comprehensive. Caught a bunch of stuff that GLM-5.3 flash (which is incredible value) missed, and gave me good solutions for some irritating issues.
It's very slow (even by frontier standards), but it's hard for me to believe that Anthropic have much of a moat.
I mean, I like talking to Claude more than basically every other model (the open models are much more entertaining though, especially their thinking) but that doesn't feel like it warrants their valuation.
If they can successfully move towards owning their compute, and optimise it massively then they might do well, but it's a risky proposition from my perspective.
There are plenty of people who give Anthropic money because 1) Reddit told them to switch to it or 2) because telling their investors that they use Chinese models (never mind whether they're open-weight or where they're hosted) is a non-starter.
> the Chinese models, Mistral, Argon etc, aren't "good enough"
Yes they are. Earlier this year the gap was narrowing rapidly; it wasn't until this summer that the frontier labs pulled ahead again and them doing so doesn't diminish the value prop of something like the GLM 5 series or DeepSeek.
Maybe this describes Anthropic people mostly
I would not assume this represents their investors
Kevin O'Leary has specifically mentioned kicking China's ass wrt AI race
There is likely a ton of xenophobia and racism motivating a lot of stupid investment within the US
> Can you share any example prompts where Chinese models aren't good enough?
Nobody is prompting any more, it's more planning, automation, guardrails and reviews. For example, if your tests report that there's a 40% slow down in a particular type of analysis, you have to review possible causes, and approve a plan involving multiple agents to find solutions that won't break 50k tests. And that solution itself is a small part of the work that gets planned in a day.
Codex and Claude are the only tools that work for me, inspite of testing almost everything out there to save costs.
Add another $500k in stock options on top of that, and most of these folks shouldn't have to worry about their future even if we reach RSI and ASI.
California prohibits local payroll taxes. SF doesn't charge more taxes on income than anywhere else in CA. So please, tell me, what is the undue taxation burden facing you in the bay?
You don’t need to send them to private school and rent a swanky place or buy a 2M home. You can get things below the median and it’ll be ok, you’ll live.
Take home $22k a month
$10k on a swanky place like
https://www.zillow.com/apartments/san-francisco-ca/490-avenu...
or
https://www.zillow.com/homedetails/727-Moraga-St-San-Francis...
$3k on childcare https://familychildcaresf.com/child-care-san-francisco/
Leaving $9k a month
Insane
Anthropic's internal AI use, at retail prices, now exceeds its employee pay
It is not for the benefit of society, it is not good engineering, it is pure financial fuckery. ENRON smartest guys in the room esque.
Am encouraging everyone I know to dump US bonds, US stocks because to hell with these hucksters trying to steal my pension.
When they’re unable to meet their… *checks notes*, $895,400,000,000.00 in commitments, what do you think will happen to the people that bought at IPO prices?
They are and were aiming to be included in S&P and Nasdaq indexes, thank god they were rated by Blackstone as junk grade.
Even outside of that their 800 billion, and I assume OpenAI's equally shitty compute contracts pollute the MAG7 revenue lines.
How much does it represent the MAG7 revenue books? How much is their shitty stock deal counted towards the above's assets?
Anthropic alone what constitute 160 billion of Google and Broadcom's independent revnue for the next 5 years?
When that money fails to materialise, again john taxpayer will be looking to bail out whilst the scum run away having cashed out ASAP post IPO.
Fuck all the people involved.
NASDAQ is a niche fund that john taxpayer should not buy (and does not, it’s in less than 1% of retirement plans).
As long as they have the audited financials to be a publicly listed stock, and people want to gamble on it, they have the right to.
Shareholders in PBC have no sway. Look up drakes landing v. tilden park from earlier this year. A PBC was in financial trouble and two specific lenders proposed a solution: financing and debt conversion that would increase their combined ownership from roughly 25% to 85%, heavily diluting all other shareholders. An independent special committee of the PBC approved it.
Shareholders holding more than half the stock had requested a vote against this, but none occurred. They were told that the mission of the PBC came first.
It’s an absolutely crazy financial loophole. Basically, if you found your company under these PBC rules (which have only existed for like a decade), you can avoid any accountability to shareholders and do whatever the fuck you want. It’s a total subversion of property law. You can own a majority of the company and they can still unilaterally vote to dilute your holdings to zero.
My advice: spend some time creating a long-term financial family planning document, review it with other competent people, and stick to it! Regardless of market up/down events, your plan stays in place. It has worked extremely well for me over the past 40 years (including all sorts of "crashes" that stabilized over time).
Outsized stock based compensation when you’re posting massive GAAP losses just makes it look like you’re robbing shareholders… because in a real sense you are.
The shareholders benefit when the employees have an incentive to do good work.
That's fine when they are accountants, it's important to tell the decision makers the costs. The decision makers know the value.
The problem is when the decision makers don't know the value.