Thread

Anthropic's IPO prospectus shows AI vision, surging costs

143 points · 150 comments · 6thbit

2ss · 1790639528 · focus · HN ↗
2 things can be true:
-LLMs profoundly change society -The LLM business is mangled in terms of ROIC vs CoC
Such a business already exists - airlines.
This nuance is what many here refuse/find difficult to understand.
1. CoolestBeans · 1790641225 · focus · HN ↗
  Well said, the technology can be transformative while being structurally challenging to build a viable business around.
  1. runarberg · 1790642134 · focus · HN ↗
    But the technology also doesn’t have to be transformative either. I for one am not convinced.
    The two things being true may as well be: LLM will not be transformative and the LLM business is mangled in terms of ROIC vs CoC.
    In fact given the behavior of AI companies, I actually consider it more likely then not that the effects of the technology is severely over-hyped. I for one do not trust the words of the people who mangle their business in terms of ROIC and CoC. Why should I?
    CookieCrisp · 1790642536 · focus · HN ↗
    LLM's are already transformative. I get thinking it isn't going to solve all the world problems, but, companies throughout the entire world are already using it at enormous numbers. Transformative means it changes the world, it already has. It does not mean it changes your life.
    runarberg · 1790650919 · focus · HN ↗
    By this metric then leaded gasoline and the Deep water horizon oil spill, and Reagan era deregulations were also transformative, so was the Apollo mission, the SETI program and even Eurovision. Arguably Alchemy was also transformative even though it was unsuccessful, because the scientific funding that went into various attempts led into many vital discoveries.
    If this the criteria we are using form something being transformative, then being transformative is truly unremarkable in this context, to the point of being a distraction.
    CookieCrisp · 1790659408 · focus · HN ↗
    I just will never understand how you all can have your head so deep in the sand.
    archagon · 1790713575 · focus · HN ↗
    Attempting to understand perspectives that feel alien to you will be good for your personal growth. (Try asking your LLM.)
    ben_w · 1790677220 · focus · HN ↗
    If LLMs are "only" transformative in the sense of leaded gasoline or the Apollo mission, that's a massive change all by itself.
    If LLMs are "transformative" in the same sense as counting "alchemy because of the scientific funding that went into various attempts led into many vital discoveries", what's going to be our version of "actually we can turn lead into gold now, we just have better things to do with the capability"?
    <a href="https://en.wikipedia.org/wiki/Nuclear_transmutation" rel="nofollow">https://en.wikipedia.org/wiki/Nuclear_transmutation
    owebmaster · 1790681929 · focus · HN ↗
    "actually we can turn lead into gold now"
    Isn't it vibecoding? Turn out it's not really gold
    ben_w · 1790682428 · focus · HN ↗
    No, I don't think so.
    We do have the means today to turn literal lead into literal gold.
    The energy is better spent on almost anything else and the gold is radioactive afterwards, but we can do it.
    The closest analogy I'd have for vibecoding is combustion engines. Historical antecedent was a toy, early industrial ones took a lot of fuel and were only useful to pump water out of the coal mines that supplied that fuel, but kept getting improved until they made a critical quality leap that took them from "slightly worse than a horse" to "marginally better than a horse" and then there were suddenly a lot of unemployed farriers.
    But literal-lead-to-gold took a while longer than that, and a different set of inventions behind it.
    ambrozk · 1790642630 · focus · HN ↗
    Don’t. It doesn’t matter. Join Ed Zitron and shout at clouds while the world passes you by.
    archagon · 1790713747 · focus · HN ↗
    Would love to, but… <a href="https://bsky.app/profile/smoothdunk2.bsky.social/post/3mvx47m5nuc2w" rel="nofollow">https://bsky.app/profile/smoothdunk2.bsky.social/post/3mvx47...
    goolz · 1790642757 · focus · HN ↗
    It is becoming increasingly hard not to see it as transformative. The man hours needed to do my work has been cut down by orders of magnitude. Wether this transformation is wholly a good thing is to be seen.
    vineyardmike · 1790642952 · focus · HN ↗
    Do you not feel we’re already transformed?
    The world looks pretty different today. Even if the model maker companies go out of business (I’m skeptical), the model weights would stick around (many are open freeware already).
    I know many software engineers who haven’t written code this year. AI chatbots are regularly used as alternatives to searching manually by many people. Agents are becoming a valuable new enterprise tool, and now consumers tech consumers are hopping on board.
    hajile · 1790695752 · focus · HN ↗
    The US spends a bit less than $400B/yr creating software and the worldwide spending is around $675B/yr.
    Even if you eliminate 100% of the people involved in creating software, that's still not enough money (and of course, that's not going to happen because someone has to know what to build).
    Everyone is adding agents to enterprise stuff, but an overwhelming majority of the general population now hate AI for most things -- especially the "AI support" these companies are using. I think most people would rather suffer through overseas call centers with absolutely terrible representatives than deal with AI support (studies seem to indicate 80+% prefer a human to AI for support in general).
    AI as a search engine is useful, but a very different animal. Proficient users want a way to check the AI like Google's AI search does (though the links sometimes don't agree with the summary), but these run very small models (8b or so) with the RAG backend doing the real work.
    How many competitors does this space need? Companies can build their own proprietary RAG search engines, but users would almost always prefer the company make that public data available to Google and just use one well-optimized search engine instead of dozens of bad copies.
    What about profitability? Google enshittified their search to increase retention and ad time, but AI search should reduce retention/ad time AND costs a lot more money to run too meaning it should lower their bottom line. If that weren't enough, their RAG system is almost certainly more replaceable by users with alternatives than their traditional search system. This seems like all downside for Google.
    TeMPOraL · 1790805140 · focus · HN ↗
    > The US spends a bit less than $400B/yr creating software and the worldwide spending is around $675B/yr.
    The currently well-served market for AI is not software engineering, it's approximately all of white-collar work, ranging from accounting and law, through medicine, general office work, to school administration, education, NGOs and governance.
    Not everyone is going to just publicly brag about their AI use, but it's an open secret everyone is either using LLMs for half their work, or - if for some reason they're not busy enough to arrive at this idea on their own - under pressure to start using them.
    CoolestBeans · 1790644081 · focus · HN ↗
    Yeah I'm not sure where I stand. It does seem like the industry keeps throwing in new hype cycles just as sentiment is about to turn on the last one. But I also can't deny some results are remarkable.
2. elzbardico · 1790641967 · focus · HN ↗
  Frankly, outside of coding there's no much real use for AI, which is basically NLP.
  1. minimaxir · 1790642057 · focus · HN ↗
    There's, uh, a reason ChatGPT is one of the biggest consumer apps of all time.
    dubbie99 · 1790642242 · focus · HN ↗
    That nobody uses on their phones. It’s like that install of angrybirds everyone has that they haven’t touched in a decade
    pjerem · 1790642699 · focus · HN ↗
    You are living in another world. I don’t know a single people who is not using ChatGPT, Gemini or Claude. Even my non tech parents are using it everyday.
    minimaxir · 1790642918 · focus · HN ↗
    As of today, ChatGPT is the #4 Top Free app on the US iOS App Store: this chart only measures new/recent downloads.
    The #1 and #2 apps are non-coding, pure consumer AI applications (Meta Muse and Momo).
    elzbardico · 1790642313 · focus · HN ↗
    How many people are going to pay a 20 dollars subscription for it?
    minimaxir · 1790642477 · focus · HN ↗
    That is not relevant to your assertion of "AI has no real use besides NLP."
    trollbridge · 1790642598 · focus · HN ↗
    apparently very few people - I know tons of people who use it and almost nobody who pays for it, particularly outside of tech
    karlshea · 1790658615 · focus · HN ↗
    Well that's why they're going to start injecting ads.
    hajile · 1790696473 · focus · HN ↗
    Ads in AI are problematic in a big way.
    How do you add them? Inside the model has tons of problems. From user context makes a bit more sense, but how do you decide and how do you ensure the context is actually beneficial for the company paying for the ads (advertisers are very sensitive about what content gets subconsciously associated with their brand).
    How do you make sure a human sees them? This is a very hard problem even in normal ads and seems even more problematic with chatbots.
    How do you attract advertiser dollars? Ad spending is zero-sum. You must somehow convince advertisers that your chatbot is a better ad platform than Youtube, Facebook, etc.
    The only AI solution that seems reasonable is something like Google's AI search because the RAG backend ensures Google can control where ads show effectively through deterministic means (based on the websites it pulls). Google also has the ad network, consumer base, and provable humans to drive up ad value (this is without mentioning that Gemini falls behind on coding/math benchmarks, but seems to be better at "normie" interactions).
    None of this helps any of the AI startups and running all this extra stuff for the same ad revenue cuts Google's profit margins too.
  2. aeon_ai · 1790642226 · focus · HN ↗
    "Generate me an explainer video of someone holding a sign stating "I have no idea what I'm talking about" being educated about the realities of time, labor, and 'good enough'"
    You're right. I didn't even need AI to get my point across.
    applfanboysbgon · 1790642406 · focus · HN ↗
    If that's your idea of "real use", you're really reinforcing their point.
    margalabargala · 1790651218 · focus · HN ↗
    Explainer videos aren't real use?
    I mean, if self education isn't a "real use", I wonder why all those libraries decided to dedicate all that shelf space to nonfiction books?
    Wikipedia could probably save a lot of hard drive space too.
    applfanboysbgon · 1790651298 · focus · HN ↗
    Absolute slopshit "explainers" are not real use, no.
    aeon_ai · 1790652445 · focus · HN ↗
    On every objective measure, quality is improving and the trendline is clear.
    I'm by no means citing that AI is perfect, or that there are no problems or challenges ahead, but the self-lobotomizing AI doomerism/rejection is turning otherwise intelligent people into a horde of anti-AI lemmings that are afraid to apply the critical thinking they believe is being lost by AI users.
    These things are puppeteering blender to model things for gods sake. Are you all blind?
    applfanboysbgon · 1790654749 · focus · HN ↗
    [dead]
    owebmaster · 1790682226 · focus · HN ↗
    > On every objective measure, quality is improving and the trendline is clear.
    Where? I can't find one company that did "AI layoffs" and their app/services got better. Give me just one good example please
  3. vlovich123 · 1790649025 · focus · HN ↗
    Funny, I don’t remember NLP being useful as a coding agent or solving cutting edge math problems.
3. pid-1 · 1790642086 · focus · HN ↗
  Isn't telecom kinda the same? Lots and lots of capex, turned into dumb pipes that can't extract value from their customers.
  1. mattm · 1790642463 · focus · HN ↗
    I don't think telecom is the same. 2025 net income for the big 3 US telecoms: AT&T: $22B Verizon: $17B T-Mobile: $11B
    bad_haircut72 · 1790642554 · focus · HN ↗
    Compared to the Google/Facebook and other websites who run over these networks the Telcos barely capture any of the value in that exchange for themselves, whilst stumping for huge amounts of the capex
    repeekad · 1790642912 · focus · HN ↗
    Meta alone made more than those three combined at $60B, Google made $132B
    ticulatedspline · 1790651847 · focus · HN ↗
    Well, it would be weird if a loaf of bread cost less then the wheat it's made from.
    bad_haircut72 · 1790659667 · focus · HN ↗
    This is more like, 90% of the money from selling the bread goes to the guy slicing it, while the ones who bought, own and operate the ovens get the other 10%
  2. akersten · 1790643966 · focus · HN ↗
    If my ridiculous $100+/m subscription to the single dumb pipe that has a government-endorsed monopoly in my area is anything to go by, they're extracting plenty of value from this customer at least.
    oyashirochama · 1790649896 · focus · HN ↗
    Which is northing compared to what google and other networking/application companies get from businesses to use their digital, no or little in comparison physical maintenance, products.
    TeMPOraL · 1790805837 · focus · HN ↗
    Which is still nothing compared to what users get out of this, which is why the technology continues to work and improve despite occasional bubble-popping events leaving some investors without their shirts.
4. JumpCrisscross · 1790664346 · focus · HN ↗
  > Such a business already exists - airlines
  Also computers. DEC and IBM and Gateway and whatever didn't extract the economic benefits of digitization. Even Apple extracts a vanishing fraction of the economic benefits the iPhone has created.
  1. Panzer04 · 1790685423 · focus · HN ↗
    Well, you can extract all the value created using your tools and inventions, because then no one would have any incentive to use them to create value.
    They try to get around this by charging you more after you've invested in your tools, but even then you can only go so far (though it's astonishing how far the big guys have managed to get regardless)
5. iririririr · 1790667435 · focus · HN ↗
  what everyone is missing from the example: neither airline nor telecom requires a trillion dollar investments to get the same revenue
6. throw0101a · 1790680858 · focus · HN ↗
  > -LLMs profoundly change society -The LLM business is mangled in terms of ROIC vs CoC
  People seem to have forgotten the bust in railroads and Internet (etc), even though those technologies were transformative:
  * <a href="https://en.wikipedia.org/wiki/Technological_Revolutions_and_Financial_Capital" rel="nofollow">https://en.wikipedia.org/wiki/Technological_Revolutions_and_...
  One thing I'm wonder about: previous busts left useful infrastructure behind (rail, fibre) that could still be used. If/When the AI/LLM companies go bust, what will be left over afterwards and how useful will it be?
  1. hnthrowawayacct · 1790701962 · focus · HN ↗
    Seems like it might leave behind underutilized data centers full of subsidized compute seeking paying tenants.
  2. jedberg · 1790705435 · focus · HN ↗
    > previous busts left useful infrastructure behind (rail, fibre) that could still be used. If/When the AI/LLM companies go bust, what will be left over afterwards and how useful will it be?
    Many many idle GPUs.
    bluecalm · 1790711377 · focus · HN ↗
    Hey, you can do a lot of fun and useful things with idle GPUs if the prices come down! Think of all the RAM as well.
    JesseTG · 1790721239 · focus · HN ↗
    Who will house and cool them?
    stockresearcher · 1790725816 · focus · HN ↗
    I’m pretty sure that when the railroads went bust that nobody pulled up the rails and put them somewhere else. And when the internet bust happened, they didn’t pull up all the dark fiber and lay it down somewhere else.
    I would bet that if all those GPUs go idle, they stay housed and cooled in the data center they were originally installed in, for better or for worse.
    [deleted] · 1790802029 · focus · HN ↗
    [deleted]
    throw0101a · 1790774394 · focus · HN ↗
    > Many many idle GPUs.
    Yes, but what use will they have? Rail lines and dark fibre could be used post-bust (and don't depreciate all that quickly).
    jedberg · 1790777947 · focus · HN ↗
    LLM technology will not go away. The premise here is that the foundation model companies will bust. So now there will be tons of idle GPU, where companies like AWS and Azure, or even Coreweave and Lambda, can pick them up for cheap and rent them out to people who want to run open source/open weight models.
    TeMPOraL · 1790804978 · focus · HN ↗
    LLMs as of whatever open models are SOTA when the proprietary bubble bursts, plus... whatever else you can do on GPUs - weather modeling, CFD, genetics research, and so on, and so on.
    And that's at day 0. Because LLMs are not going away, thank to open weight models, and the race for capabilities has left so, so many low-hanging fruits unpicked, we'd have a decade or more of useful R&D to do even if LLM capabilities suddenly plateaued tomorrow and never improved.
    I mean, look at Jev making round in the industry now - this is just a single example of a low-hanging fruit that took many years for someone to bother to pick up and market a bit. There's many, many more of these just laying around.
  3. xnx · 1790808301 · focus · HN ↗
    > what will be left over afterwards and how useful will it be?
    Don't focus on the hardware. The models themselves are tremendously valuable. These tools would've been considered alien technology just 15 years ago.

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