That means that Anthropic with its lousy revenues should have an IPO for $25 billion and not $2 trillion. All growth scenarios are a complete fantasy. They aren't even profitable and will never be.
There is just no way all these data center investments in the trillions pay off. That has to be paid out of cashflow, like, real profit. The price to do useful things keeps falling, the payroll economy will crash long before there's actual trillions of dollars of cashflow for tokens.
They just need 5% of the worlds population to get $50-100 value per month out of them.
Even in my non-SWE job, paying $100/mo for my current $20/mo plan would still be a no-brainer.
I don't think there is much concern about open models either. Compute is constrained for the foreseeable future, and money is what will determine who gets it. Nevermind that the US will likely block Chinese model imports or China will block exports at some point. The cold war has already begun here.
Enterprises will pay tens of millions a month, millions of individuals will pay $100 a month and there will be a long tail as they offer cheaper pricing and perhaps ad-supported pricing.
The average American family won’t be willing to pay more than a Netflix subscription.
I think in five years, it will only be power users that use a model in its raw form - everyone else will mostly consume using wrapper apps.
Why that many people per month? What timeframe were you considering for them to pay off their expenditure? For that matter what are you estimating their total expenditure to be?
I highly doubt 415 million people will find enough reason to purchase $100 worth of Anthropic, especially when the price of intelligence keeps going down and smaller models become more and more capable to meet the average person's needs like drafting emails, customer support, basic RAG.
The cost of intelligence doesn't matter, it will just make margins wider.
Just look at software over the last 20 years. People pay based on the value they receive, not the cost the produce or serve it. That fact is literally is the backbone of tech, and why it has been an absolute money machine.
I think the worst case scenario for the labs is current (or next gen) SoTA models reaching a point where cheap consumer hardware can fully run them. But the labs practically have a monopsony on compute, and getting the kind of long context current models thrive on out of 16GB GDDR6 is gonna be a trick.
Tech has been a money machine because it has a marginal cost if approximately 0, so tech companies could literally give there products away and live off of the pennies they get from serving adds. Software is one of the hardest product classes to get people to pay for because the cost is anchored at 0.
It is the entire scam and many of those funding the data center build-out know this. Otherwise why are they hiding the trillions of debt under the rug?
There's a reason why a company like Stripe can stay private far longer than Anthropic or OpenAI can.
These AI companies have taken in all the capital from private investors and are still losing hundreds of billions and have no choice but to hype up the IPO and dump some of the stock at a purposefully inflated valuation to retail investors.
They are worth (on paper) so much that there are not enough retail money to buy them anymore. All these companies can do is put Uncle Sam on the hook to print money for them. There is no other way.
As someone who does not understand how IPO works. So they do not need to show whole “big picture” of their revenue vs costs before going public? Wouldn’t build it trust to show they are healthy company worth investing besides speculation? (It must be naive question from)
Yes they do. They have to file an S-1 with the SEC, which will be made public about a month before the IPO.
The S-1 has to include, among other things, three years of audited financial statements, plus interim statements (unaudited). It will cover both revenue and expenses, the latter breaking out things like cost of revenue, R&D, sales and marketing etc.
Based on the (unofficial but reported) IPO target date of late Sep to early Oct, the S-1 will have to be made public in a few weeks from now.
They do, but the accounting rules change based on context. They will file an S1 today outlining how they are rolling in profits then, come tax time, suddenly they are hemorrhaging money. Flesh-and-blood investors have lost all trust in financial filings. See SpaceX.
It's obviously not in their interest. Disclosing would only work as marketing for their IPO and it's the most anticipated IPO in history and needs no marketing. There is like zero positive side to disclosing audited financial statements and massive liability.
"There is like zero positive side to disclosing audited financial statements and massive liability."
Why are you posting about stuff you have zero clue about?
Oh theres no positive side... yes there is. There is a huge amount of failure risk weighing on both OAI and Anthropic - investors don't care about how great you claim your technology is gonna be. They want to know if a viable buisiness model is taking form and whether you will be around long enough given the investment time horizon of the investor.
Right now China is making that failure risk even larger. This directly affects the IPO.
We already know they are not profitable in the truest sense w.r.t valuation.
FCFF = EBIT(1-t) - Reinvestment.
This is how the operating assets are valued via intrinsic valuation.
Could they generate immense earnings and cash flows net of reinvestment? Sure. DO I believe so? Nope. They've got way too out infront ahead of their skies about where this technology belongs and operates best.
The Mercedes Benz group has Q2 revenues of $36 billion and is profitable. According to Anthropic calculations, it has $144 billion of yearly revenue.
The market cap however is only $50 billion:
https://www.macrotrends.net/stocks/charts/MBGYY/mercedes-ben...
That means that Anthropic with its lousy revenues should have an IPO for $25 billion and not $2 trillion. All growth scenarios are a complete fantasy. They aren't even profitable and will never be.
There is just no way all these data center investments in the trillions pay off. That has to be paid out of cashflow, like, real profit. The price to do useful things keeps falling, the payroll economy will crash long before there's actual trillions of dollars of cashflow for tokens.
They just need 5% of the worlds population to get $50-100 value per month out of them.
Even in my non-SWE job, paying $100/mo for my current $20/mo plan would still be a no-brainer.
I don't think there is much concern about open models either. Compute is constrained for the foreseeable future, and money is what will determine who gets it. Nevermind that the US will likely block Chinese model imports or China will block exports at some point. The cold war has already begun here.
Enterprises will pay tens of millions a month, millions of individuals will pay $100 a month and there will be a long tail as they offer cheaper pricing and perhaps ad-supported pricing.
The average American family won’t be willing to pay more than a Netflix subscription.
I think in five years, it will only be power users that use a model in its raw form - everyone else will mostly consume using wrapper apps.
But will the wrapper apps cover token cost, or will tokens act more like electricity?
“Only 5%”
We still have 2billion+ people offline. Looking at global population is the wrong reference frame for selling a $100/mo service.
Why that many people per month? What timeframe were you considering for them to pay off their expenditure? For that matter what are you estimating their total expenditure to be?
I highly doubt 415 million people will find enough reason to purchase $100 worth of Anthropic, especially when the price of intelligence keeps going down and smaller models become more and more capable to meet the average person's needs like drafting emails, customer support, basic RAG.
The cost of intelligence doesn't matter, it will just make margins wider.
Just look at software over the last 20 years. People pay based on the value they receive, not the cost the produce or serve it. That fact is literally is the backbone of tech, and why it has been an absolute money machine.
I think the worst case scenario for the labs is current (or next gen) SoTA models reaching a point where cheap consumer hardware can fully run them. But the labs practically have a monopsony on compute, and getting the kind of long context current models thrive on out of 16GB GDDR6 is gonna be a trick.
Tech has been a money machine because it has a marginal cost if approximately 0, so tech companies could literally give there products away and live off of the pennies they get from serving adds. Software is one of the hardest product classes to get people to pay for because the cost is anchored at 0.
"But the labs practically have a monopsony on compute..."
Another bozo who read a intro microeconomics textbook, learned a fancy word, and doesn't know how to apply it! LOL.
Wow you people on here are really funny.
Also that bozo is not bringing to the surface the implicit assumption of going-concern in perpituity.
Most people shouldn't open their mouths / write anything re. valuation TBH.
They are valued as if one company will win and get almost the entire market. And that the market will be massive and profitable.
That's because the implicit sales pitch is: "We will create a tame AI overlord and rule the world with it!"
It is the entire scam and many of those funding the data center build-out know this. Otherwise why are they hiding the trillions of debt under the rug?
There's a reason why a company like Stripe can stay private far longer than Anthropic or OpenAI can.
These AI companies have taken in all the capital from private investors and are still losing hundreds of billions and have no choice but to hype up the IPO and dump some of the stock at a purposefully inflated valuation to retail investors.
They are worth (on paper) so much that there are not enough retail money to buy them anymore. All these companies can do is put Uncle Sam on the hook to print money for them. There is no other way.
Anthropic would publish audited financial statements, if they saw it to be in their interest.
It is still in their interest to not report "false or misleading statements that you or others on your behalf make regarding your company."
https://www.sec.gov/resources-small-businesses/exempt-offeri...
As someone who does not understand how IPO works. So they do not need to show whole “big picture” of their revenue vs costs before going public? Wouldn’t build it trust to show they are healthy company worth investing besides speculation? (It must be naive question from)
Yes they do. They have to file an S-1 with the SEC, which will be made public about a month before the IPO.
The S-1 has to include, among other things, three years of audited financial statements, plus interim statements (unaudited). It will cover both revenue and expenses, the latter breaking out things like cost of revenue, R&D, sales and marketing etc.
Based on the (unofficial but reported) IPO target date of late Sep to early Oct, the S-1 will have to be made public in a few weeks from now.
Of course they do. The HN braintrust is mostly financially illiterate and sees conspiracies and fraud everywhere.
They do, but the accounting rules change based on context. They will file an S1 today outlining how they are rolling in profits then, come tax time, suddenly they are hemorrhaging money. Flesh-and-blood investors have lost all trust in financial filings. See SpaceX.
You think Elon Musk fans were reading the financials???
The financials were always bad. Everyone with half a brain avoided the IPO. Did you?
Yes, they have to file an S-1 with the SEC as part of the process. This lays out business operations in detail, including risks. For instance, here is the SpaceX S-1: https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
No, as i understand it: the underwriters are the banks that write out the shares and give a sort of guarantee. So they decide the price of the IPO.
Which pre-IPO companies publish audited financial statements?
And why would it be in their interest...?
Scratching my head too. Why? Spend a lot of money and effort, to share info you don’t have to, which can only create liability?
It's obviously not in their interest. Disclosing would only work as marketing for their IPO and it's the most anticipated IPO in history and needs no marketing. There is like zero positive side to disclosing audited financial statements and massive liability.
"There is like zero positive side to disclosing audited financial statements and massive liability."
Why are you posting about stuff you have zero clue about?
Oh theres no positive side... yes there is. There is a huge amount of failure risk weighing on both OAI and Anthropic - investors don't care about how great you claim your technology is gonna be. They want to know if a viable buisiness model is taking form and whether you will be around long enough given the investment time horizon of the investor.
Right now China is making that failure risk even larger. This directly affects the IPO.
As far as I remember there was report of their run rate. How does it align with this?
I think it was 48B for 2026 so they got some growin to do
There is a narrative that subscriptions are subsidized. Perhaps we should consider that API users are being price gouged?
Inference is profitable. Even open models can be profitable. Obviously your cost of capital is the thing that influences that the most.
Do we know this as a fact? Do we have proofs it is profitable? I haven’t seen any evidence so far, it’s mostly something repeated and accepted as fact
Or maybe everyone’s paying proportionately to value received?
No way of knowing, this report is about revenue not profit.
We already know they are not profitable in the truest sense w.r.t valuation.
FCFF = EBIT(1-t) - Reinvestment.
This is how the operating assets are valued via intrinsic valuation.
Could they generate immense earnings and cash flows net of reinvestment? Sure. DO I believe so? Nope. They've got way too out infront ahead of their skies about where this technology belongs and operates best.
There is so much competition gouging is impossible. If somebody is willing to pay Anthropic's high prices let them. I don't.
And its only transitory.
Both OAI and Anthropic tried to time their pricing to look good heading into an IPO window.
They got screwed as China has kept up. Wonder how they're gonna overcome this problem - protectionism? Maybe.
Most developers would rather use Claude or Codex than mess around with anything else. Codex has 15+ million users.
But the 15 millions includes free users and companies purchasing seats in bulk, no?
Very impressive growth for sure (they doubled in around a month?), but we don’t know the ratio of paying seats
cant access bloomberg link. so they are "leaking" these numbers to press ? why ? i cannot think of any non shady reason to do so