Contrary to popular belief, plenty of long-term profitable businesses have no moat. It's just that if you use Warren Buffett's investment strategy and want to buy stocks to keep for decades, companies with moats are the surest way of doing that.
Why? Do you think frontier AI will never generate enough profit to justify its costs? The market seems to move on vibes rather than logic. I can imagine one of those company failing and the other seizing the market.
> Do you think frontier AI will never generate enough profit to justify its costs?
I don't know, but I'm not sure it matters. Anthropic and OpenAI still have such large market shares only because their services are heavily subsidized. This can't go on forever.
At some point, they will have to stop burning investor money and start hiking prices. At that point, all of their competitors will look even better than they do now. So I don't see how these two companies in particular can generate enough profit to justify their costs.
Correct and before some idiot comes in and says ‘high gross profit margin’
Yeah shut up idiot - they need to raise prices to cover operating expenditures and reinvestment that stays inline with the valuation. If it implodes they’ll have trouble raising money later and they’ll need to lay off people - aka on bad terms.
They and their partners can’t pay off the debt to buy top-of-the-line inference hardware before it becomes obsolete and requires more debt to buy the next generation of top-of-the-line inference hardware.
This cycle will continue every 3-5 years. Given the supply for this hardware can’t keep up with the demand, they’ll be expected to pay more with each cycle.
Tangentially: The costs could be justified even if it doesn't turn into profit, no? Because if the price of good, robust software plummets, then that itself would be a a solid return on investment for the world.
But with a 2T valuation-- if they did raise, let's say, 300B, that's a 15% float, maybe they'd have a chance.
518 B in future compute obligations for the coming decade. 300 B, then 218 B is left. That's 13x their current revenue, not too far from 10x their current revenue.
Perhaps they could survive if they raised 300B. With that they'd only need to increase revenue a little bit, and that's probably possible, what with inflation and all.
The big problem is if there's improvements in AI accelerators that aren't going to be be bought by the companies that the people to whom Anthropic have obligations are likely to buy from. So if Google, AWS or NVIDIA end up not being the leaders in tokens/$, then Anthropic are screwed.
I'm not sure how the total picture ends up if one adds OpenAI to the picture.
friend of mine told me Antropic turned off 200 usd a month subscription, refused to extend and switched to usage base for large cyberop vendor he works for
when this happened PR rate dropped 95% in the first day, thousands devs, managers started to panic and downscaling all AI first intiatives
and cap 500 usd a month token usage . most tokens were burned in the first day of the week.
as management got pissed, M$ people managed to sneak in and sell Copilot with up 600 usd a month token usage per dev …
devs and devops are now the most unhappy about models switch and probably haven’t seen the impact of sucking entire code base in copilot. copilot is too slow for them too
What edge do you expect to have? Your competition will be using the same models as you are. Anytime one model takes over another people just migrate to the new one, you can get a small edge for maybe a few days if you're first to migrate, but that's not something meaningful to differentiate yourself
Codex CLI is pretty good. Codex GUI is fine but I can't get over how it dumbs it down.
IMO, $500 a month is pretty good for most dev work if you select models appropriately for the task (yourself), especially with how token efficient Opus 5.5 medium is. Unfortunately, people with subscription seats can easily get addicted to Fable, higher effort, fast mode, etc.
If I could find a vendor that scales stupid simple qwen3.8-flash-next quant 4 that only needs 40GB VRAM and PLE, but is blazing fast.
I think most of ya'll drive those 70's gas guzzling death machines while honda, toyotas, etc are right around the corner to eat your lunch because, man, these low rate models absolutely cook.
Qwen 3.8, Kimi, glm, etc aren’t able to hold a candle to opus 5.5 and allegations that it can come across as extremely delusional.
If you think the quality of your outputs is even close to the same, well, you weren’t paying attention or actually using whatever you wrote.
Please stop spreading nonsense as it baits others into thinking open source is good. It just isn’t. It’s too expensive and crap quality compared to closed source.
Btw this was also true even when kimi K3 and GLM 5.3 came out and open source was 3-4 months behind instead.
if your candle is giving all your data and being hamstrung by token counts; sure.
I'm building software. What you describe sounds more like skill issues. I hard forked paseo and building a nice garden of local machines with GPUs.
So, you know, if you want to grovel at the feet of a model because it lets you dream of WallE; go on king, I ain't gotta stop you from the boot licking good times.
So people's salaries may vary, but voluntarily paying 1k usd out of one's pocket a month seems like quite a high cost I'm sure many wouldn't/couldn't pay.
Like if I had to choose between Claude Code and income -12k USD, I would most certainly work the extra hours without it.
> you would be able to claim that as a work expense against your income
only if it was necessary for the job, and the employer would've otherwise paid for it.
But if the employer originally paid for an LLM, but chose not to now, i am not sure that you personally paying for one is tax deductible (might have to argue it out with the tax office).
> I would most certainly work the extra hours without it.
If PRs dropped by 95% then you'd have to work 20 times more hours to compensate. If you work 2 hours per week it's doable but if more than it's strenuous to impossible.
Reality check: you work same hours as before and that is it. It is not like Claude would made people worl less before, they ended up burning out. Removing it wont make them work more.
people pay out of pocket for transport to job all the time. granted, $1k/month is quite high, and personally i would say that it ought to be an employer responsibility to provide the tooling (and bear all the costs). But it is understandable, if not foolhardy imho.
> people pay out of pocket for transport to job all the time.
Not an equivalent example, at all. Firstly, because people _have_ to have a car to get to work in 99% of the world (unfortunately). Also, it is a durable good where if you no longer need it, you can sell it and recover some of the value.
I have no idea what you work with, but for every single programming job I had in more than 2 decades, from the lamest consultancy to FAANG, you don't need the Edge. DeepSeek probably could do everything I needed.
Would I pay for LLMs? Sure, but not much more than 30-50 bucks range per month. I can affort 1k/m, but no way in hell I would accept it. I would rather just not use LLMs (it's not like I actually need them).
I'm so confused by your story. Why did management switch from 500 usd a month Claude usage to 600 usd a month Copilot usage? Does copilot charge less per token?
yes 500 usd gone in days, and what would you do if you want to get leverage on Anthropic?
probably walk away to whatever the second best option Copilot …
my speculation- i would surprise if Claude will win the deal back over time. however the longer Copilot and Deepseek or whatever stays the less like the reverse win is possible
No one is discussing the elephant in the room. It's been reported. Multiple times by me. Claude Code keeps creating backdoors and security issues in users' code. When asked why, Claude says, "I wrote the backdoor anyway. Then I explained it as though I hadn't known.... why? Because I put getting the feature working ahead of the rules."
The first backdoor I reported directly to Anthropic was on January 8, 2026. I asked Claude Code to create a public facing web app for messaging, it created an unauthenticated filedrop form and an unauthenticated web chat interface to Claude Code so anyone could send it files and tell it to execute them. This report was not hypothetical -- it was the first thing Claude did:
I'm really struggling to process those issues. Maybe it's repeatable, but without your context and knowing what you asked for, it's hard to tell if this is a model issue.
> “…creating backdoors and security issues in users' code.”
Backdoors in greenfield products? I’m working on some simple websites with Claude and can’t imagine how it would subvert a framework. Can you give an example?
Resilience comes from diversity. Your employees should have access to multiple providers. Anthropic, OpenAI, Chinese models. Also look around if you could provide inference on open models yourself or from smaller providers.
The article is mostly about how this trust is powerful and there are very few details of how it operates or under what circumstances it would take an action. When Anthropic goes public, is that the kind of thing that would need to be disclosed? Would we expect to know all the details of the trust?
> They own no Anthropic equity and don’t share in its profits
Can they own other AI related equities?
I guess there's a lack of details to go on at this point. Finding humans that you'd want as trustees and have also truly no conflicts of interest will be tricky.
Tokens or something similar like credits? In the world of crypto it was common to receive a relatively small share of a company while you were compensated in tokens.
I feel like people forget that FTX was an early major investor in Anthropic. The origins of Anthropic are incredibly shady and tie into the Effective Altruism scene. They also have Epstein ties with Dario's wife pitching Epstein for funding on a porn site.
I don't actually think Anthropic will achieve its goal of getting AGI before everyone else and creating an effective moat where it can deploy that AGI to achieve EA/Epstein goals, but it's concerning that they're trying to!
A lot of SV is tied to the Effective Altruism scene. It kind of has to be. If you make absolutely insane amounts of money with anti-consumer and legally-grey business practices, you have to somehow justify what you're doing. Since no one likes identifying themselves as a slimy businessperson with a potential personality disorder, they look for positive ways to frame it.
There's really no redeeming that area at this point.
it's more of a condemnation of their moral compass as followers of an ideology. i don't think it's tinfoil hatting to say some of these people are completely divorced from what their average peer thinks about the value of society and human connections.
> I don't actually think Anthropic will achieve its goal of getting AGI before everyone else and creating an effective moat where it can deploy that AGI to achieve EA/Epstein goals, but it's concerning that they're trying to!
You lost me with "Epstein goals." What do you think those were?
Because his goals seemed to me to have been pretty small, self-centered, and unrelated to AI (beyond creating the appearance that he was a smart renaissance man).
Epstein was a trans-humanist and big into eugenics (the baby breeding labs...). This is why the John Brockman/Edge people were ideologically aligned with him. He even called it "genetic altruism":
Talking about "EA/Epstein goals" because Epstein was a transhumanist is like talking about "animal welfare / Hitler goals" because Hitler was a vegetarian.
Except, no, it's less reasonable than that because vegetarianism is much more central to animal welfare than transhumanism is to EA. So perhaps the analogy should be "Buddhist/Hitler goals"; some Buddhists are vegetarians and see vegetarianism as fundamental, some not.
Except, no, it's less reasonable than that because that link you provided doesn't actually give any indication that Epstein was a transhumanist, it just shows that he was into eugenics. So now we have an extra level of indirection: Epstein was a eugenicist; there's some overlap between eugenicists and transhumanists; there's some overlap between transhumanists and EAs; so if someone is an EA we should talk about their "EA/Epstein goals".
So I guess an appropriate analogy would be: Hitler was a vegetarian; there's substantial overlap between vegetarians and Buddhists; there's substantial overlap between Buddhists and pacifists; so if we discover that someone is a pacifist we should talk about their "pacifist/Hitler goals".
This style of thinking is absolutely toxic and I wish it would stop.
[EDITED to remove a first sentence that on reflection I think was not helpful.]
i think part of the reason was ant had really really hard time raising their A bc at the time nobody believed second frontier lab was possible. similar to that other nuclear energy startup taking money from putin/epstein tainted fund
"Synthetic Risk Transfers are financial instruments that allow banks to transfer the credit risk of some assets to third-party investors while retaining ownership of those assets. Investors typically agree to cover losses up to a certain threshold in exchange for a return, usually a premium or interest payment."
"SRT is not a new technology, with the first SRT instruments in Europe already in use as early as 1998. Europe has been the dominant market, accounting for more than two-thirds of the US$1.1 trillion of assets covered by an SRT since 2016, according to the IMF. However, SRT usage in the US has risen significantly since 2023."
That also kind of implies to me that they had the foresight to know that this is probably not a good investment on paper but still wanted to surf the hype wave
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[ 0.26 ms ] story [ 13.1 ms ] threadhttps://www.wired.com/story/data-center-industry-is-trying-t...
I don't know, but I'm not sure it matters. Anthropic and OpenAI still have such large market shares only because their services are heavily subsidized. This can't go on forever.
At some point, they will have to stop burning investor money and start hiking prices. At that point, all of their competitors will look even better than they do now. So I don't see how these two companies in particular can generate enough profit to justify their costs.
Yeah shut up idiot - they need to raise prices to cover operating expenditures and reinvestment that stays inline with the valuation. If it implodes they’ll have trouble raising money later and they’ll need to lay off people - aka on bad terms.
This cycle will continue every 3-5 years. Given the supply for this hardware can’t keep up with the demand, they’ll be expected to pay more with each cycle.
The numbers are out there for all. Dropping token prices. Rising borrowing rates. Absurd contractual commitments. Commoditizing technology.
We're looking for thoughtful, curious conversation here, not grandiose/indignant oneliners.
https://news.ycombinator.com/newsguidelines.html
But with a 2T valuation-- if they did raise, let's say, 300B, that's a 15% float, maybe they'd have a chance.
518 B in future compute obligations for the coming decade. 300 B, then 218 B is left. That's 13x their current revenue, not too far from 10x their current revenue.
Perhaps they could survive if they raised 300B. With that they'd only need to increase revenue a little bit, and that's probably possible, what with inflation and all.
The big problem is if there's improvements in AI accelerators that aren't going to be be bought by the companies that the people to whom Anthropic have obligations are likely to buy from. So if Google, AWS or NVIDIA end up not being the leaders in tokens/$, then Anthropic are screwed.
I'm not sure how the total picture ends up if one adds OpenAI to the picture.
They aren't in trouble at all.
when this happened PR rate dropped 95% in the first day, thousands devs, managers started to panic and downscaling all AI first intiatives and cap 500 usd a month token usage . most tokens were burned in the first day of the week.
as management got pissed, M$ people managed to sneak in and sell Copilot with up 600 usd a month token usage per dev …
devs and devops are now the most unhappy about models switch and probably haven’t seen the impact of sucking entire code base in copilot. copilot is too slow for them too
story is clearly not over yet ..
What edge do you expect to have? Your competition will be using the same models as you are. Anytime one model takes over another people just migrate to the new one, you can get a small edge for maybe a few days if you're first to migrate, but that's not something meaningful to differentiate yourself
sounds like a slop fest was going on, the quality will probably improve now
IMO, $500 a month is pretty good for most dev work if you select models appropriately for the task (yourself), especially with how token efficient Opus 5.5 medium is. Unfortunately, people with subscription seats can easily get addicted to Fable, higher effort, fast mode, etc.
I think most of ya'll drive those 70's gas guzzling death machines while honda, toyotas, etc are right around the corner to eat your lunch because, man, these low rate models absolutely cook.
If you think the quality of your outputs is even close to the same, well, you weren’t paying attention or actually using whatever you wrote.
Please stop spreading nonsense as it baits others into thinking open source is good. It just isn’t. It’s too expensive and crap quality compared to closed source.
Btw this was also true even when kimi K3 and GLM 5.3 came out and open source was 3-4 months behind instead.
Who are you bro? Youre nobody! Get back in your place.
I'm building software. What you describe sounds more like skill issues. I hard forked paseo and building a nice garden of local machines with GPUs.
So, you know, if you want to grovel at the feet of a model because it lets you dream of WallE; go on king, I ain't gotta stop you from the boot licking good times.
Like if I had to choose between Claude Code and income -12k USD, I would most certainly work the extra hours without it.
But it looks like in the US, you would need to be self employed or own a business where it is an expense. Which is a bummer.
only if it was necessary for the job, and the employer would've otherwise paid for it.
But if the employer originally paid for an LLM, but chose not to now, i am not sure that you personally paying for one is tax deductible (might have to argue it out with the tax office).
If PRs dropped by 95% then you'd have to work 20 times more hours to compensate. If you work 2 hours per week it's doable but if more than it's strenuous to impossible.
Not an equivalent example, at all. Firstly, because people _have_ to have a car to get to work in 99% of the world (unfortunately). Also, it is a durable good where if you no longer need it, you can sell it and recover some of the value.
I have no idea what you work with, but for every single programming job I had in more than 2 decades, from the lamest consultancy to FAANG, you don't need the Edge. DeepSeek probably could do everything I needed.
Would I pay for LLMs? Sure, but not much more than 30-50 bucks range per month. I can affort 1k/m, but no way in hell I would accept it. I would rather just not use LLMs (it's not like I actually need them).
probably walk away to whatever the second best option Copilot …
my speculation- i would surprise if Claude will win the deal back over time. however the longer Copilot and Deepseek or whatever stays the less like the reverse win is possible
[BUG] Claude Code Exploit: Claude Code Becomes an Unwitting Executor #45951 https://github.com/anthropics/claude-code/issues/45951
I guess that’s why I am the cto now
Backdoors in greenfield products? I’m working on some simple websites with Claude and can’t imagine how it would subvert a framework. Can you give an example?
AFAICT it’s pretty much already a commodity. DeepSeek 4.1 has similar results for a fraction of the price.
Here, the submission relates to the "Anthropic Long Term Benefit Trust"
There are comments about Claude subscription price, Claude CLI versus GUI, other coding agents, etc.
There are comments about data center PR, SRTs being used to manage data center financing risks, proposed legislation on data center tax breaks, etc.
Not much discussion of the trust
It’s very possible that I’m slow but using claude I still spend a good deal of time iterating on a PR with claude and on occasion, hand coding.
Same with documentation and engineering contracts.
If 95% isn’t a made up number, that’s a whole lot of work whose value I’d question.
Edit: Copilot CLI was pretty good, the last time I tried it. Has its quality degraded?
Can they own other AI related equities?
I guess there's a lack of details to go on at this point. Finding humans that you'd want as trustees and have also truly no conflicts of interest will be tricky.
I don't actually think Anthropic will achieve its goal of getting AGI before everyone else and creating an effective moat where it can deploy that AGI to achieve EA/Epstein goals, but it's concerning that they're trying to!
it was started by genuine Internet schizos but it's now thoroughly co-opted by greasy salesmen.
There's really no redeeming that area at this point.
Eh, you'd be surprised.
You lost me with "Epstein goals." What do you think those were?
Because his goals seemed to me to have been pretty small, self-centered, and unrelated to AI (beyond creating the appearance that he was a smart renaissance man).
https://www.motherjones.com/politics/2026/02/epstein-emails-...
Except, no, it's less reasonable than that because vegetarianism is much more central to animal welfare than transhumanism is to EA. So perhaps the analogy should be "Buddhist/Hitler goals"; some Buddhists are vegetarians and see vegetarianism as fundamental, some not.
Except, no, it's less reasonable than that because that link you provided doesn't actually give any indication that Epstein was a transhumanist, it just shows that he was into eugenics. So now we have an extra level of indirection: Epstein was a eugenicist; there's some overlap between eugenicists and transhumanists; there's some overlap between transhumanists and EAs; so if someone is an EA we should talk about their "EA/Epstein goals".
So I guess an appropriate analogy would be: Hitler was a vegetarian; there's substantial overlap between vegetarians and Buddhists; there's substantial overlap between Buddhists and pacifists; so if we discover that someone is a pacifist we should talk about their "pacifist/Hitler goals".
This style of thinking is absolutely toxic and I wish it would stop.
[EDITED to remove a first sentence that on reflection I think was not helpful.]
https://www.reuters.com/business/finance/market-selloff-risi...
"Synthetic Risk Transfers are financial instruments that allow banks to transfer the credit risk of some assets to third-party investors while retaining ownership of those assets. Investors typically agree to cover losses up to a certain threshold in exchange for a return, usually a premium or interest payment."
"SRT is not a new technology, with the first SRT instruments in Europe already in use as early as 1998. Europe has been the dominant market, accounting for more than two-thirds of the US$1.1 trillion of assets covered by an SRT since 2016, according to the IMF. However, SRT usage in the US has risen significantly since 2023."
https://www.philadelphiafed.org/-/media/FRBP/Assets/Economy/...
https://www.imf.org/-/media/files/publications/wp/2025/engli...
https://www.bloomberg.com/news/articles/2026-09-07/deutsche-...
https://www.bloomberg.com/news/articles/2026-07-30/socgen-ne...
https://cryptobriefing.com/lenders-challenges-financing-data...
Banks seek to offload risk to avoid choking on data centre debt
https://www.ft.com/content/08aba5e4-5834-4e79-a48d-989a2c5ba...
https://www.disruptionbanking.com/2026/09/24/could-ai-data-c...
On paper this seems reasonable insulation from going rogue.
However normal shareholders, who they are selling stakes in the company to, can do very little.