>There's an important distinction here. Anthropic isn't actually spending more cash on AI than salaries. It's valuing its internal AI consumption at retail prices.
If virtually any other company in the world said "we have internal AI servers and we let our employees use them" ... the company would measure that as they would any other internal expenditure: by how much it costs them. You blow $50k a year on servers running your LLMs? It cost you $50k.
Only a company like Anthropic, desperate to make news and help their IPO, would measure by the cost they charge customers. It's as ridiculous as Microsoft counting every employee's use of MS Word ... as if it had paid the full consumer price of each copy.
Plenty of companies use retail/wholesale pricing internally to make sure a business unit doesn’t appear profitable just because it’s being subsidized by the one providing the resources. Plenty also have to have arm’s length pricing for legal reasons.
Anthropic isn’t booking it as GAAP revenue, they’re just using the number for marketing.
That's not really true. Measuring the equivalent retail cost of the usage is the only way to put it in a relatable perspective.
If Anthropic had revealed their internal cost, there comments would be complaining that they were hiding something and giving useless, unrelatable data.
The expenditure is most interesting when compared to retail rates, because that's the rate the rest of us have to compare against.
Big companies actually are paying published API rates, Anthropic and OpenAI models are desirable enough that there is very little wiggle room to negotiate. It's their way or the high way. Same with things like "safety" filters and (for Fable) mandatory data retention.
Most "enterprise" companies are paying full API costs. The subscription deals are only available to consumers. If you want enterprise levels of control over how your staff are using the models you need to pay up.
Not even close. "enterprise" companies are negotiating contracts. Call it pre-provisioned capacity, wholesale pricing, etc. Same is true for AWS, Azure, Salesforce, or literally any SaaS provider ever. There is a reason literally every single pricing page for any SaaS provider has an "Enterprise? call us" column.
From what I've heard those enterprise negotiated discounts for Anthropic tend to be in the 15-30% range, which isn't anywhere near the deal you could get from using the $100/ or $200/ or $500/month subscriptions.
That information isn't public, but the closest we can get is from the S-1 telling us that for the nine months ending September 30, 2026, consumption-based (pay-per-token) revenue was $26.3bn, subscriptions were $6.9bn.
If that information is not public (of course it's not lol), I don't see why you would follow that up with stats that don't actually answer the question and imply they somehow get us closer to the answer...? do you own anthropic stock/options?
Most of their revenue comes from customers pay API pricing.
Those individual subscription plans you get as a consumer are not what their big enterprise customers are using.
Those plans are cheap so you, as an individual, can get familiar with the product and convince your company to get it at work. Your company pays the API prices to get enterprise features.
Microsoft basically does the same with internal Azure services? When I was there our budget/usage was based on and consumed at the consumer price for GPUs and other compute. What happened behind the scenes really I have no knowledge.
Not true. Azure has a very different internal pricing. You can often get a glimpse of it if you have a.. particularly enterprising TAM. What happens sometimes (Like now when compute/GPUs are in high demand) is finance department would calculate the opportunity cost on allocating those resources internally vs selling them externally. The calculation isn't even always straight forward. What is the opportunity cost of using compute for internal CI or company operations vs selling them externally? It's not a straightforward equation and you would have to adjust the scale often depending on how clogged your internal processes get.
The extremely discounted internal cost promote waste, so there is always a room for improving efficiency, but that too has a cost.
In the US, the IRS doesn't see it that way, at least when it comes to fringe benefits as a part of employee compensation. https://www.irs.gov/businesses/small-businesses-self-employe... says, "In general, the amount the employer must include is the amount by which the fair market value of the benefits is more than the sum of what the employee paid for it plus any amount that the law excludes."
As an example, as I understand it, if a hotel chain allows an employee to stay in one of their hotels for free when they go on vacation, the tax value of that benefit is what they would have charged someone for that hotel room, not how much it increased the hotel's costs to have one more hotel room full — which is generally almost nothing.
Of course, the IRS does agree with you when it comes to expenditures that are for the employer's benefit, rather than the employee's. If it didn't, almost all companies would have negative profits from the IRS's point of view.
Not an apt comparison. You are conflating the opex of the company with taxable benefits.
If what you said was how taxation worked, a hand tool manufactuting company giving hammers they make for $1 and retailing for $2 to workers building a shed on their property would be increasing the workers' income tax bill by $2. Of course, in reality the workers get no income tax bill on the hammer given to them for work and the company can get a $1 tax writeoff from the opex of making the hammer.
IRS rules should never be used as an example of how accounting "should" work. They're full of politics and the implications of the rules on tax avoidance.
Suppose a company could transfer an asset to an employee and have its value set as the employer's cost. A company could make a bunch of volatile investments and see which ones pay off. Then the ones that go south get sold back into the market as a tax loss and the ones that do well get transferred as compensation to employees at the purchase price instead of the current value, reducing the tax liability of both the employer (no taxable gain) and the employee (less taxable income). What would happen if any employer could do that with any employee and any asset?
Conversely, there is a separate carve out for "employee discounts", which is essentially the employer offering its employees its own products for something in the neighborhood of its own cost. Why? It's not in any way a principled accounting distinction, it's because it's harder to use for tax avoidance at scale, because then a soap company can give its employees a discount on soap, but people only need a finite amount of soap and then the soap company can't use it for cars and real estate and stocks.
Suppose a company could transfer an asset to an employee and have its value set as the employer's cost.
That's not how it works...The value would be the FMV at the time of the transfer to the employee. The cost basis would be the employer's cost. The income to the employee would be the net difference.
What would happen if any employer could do that with any employee and any asset?
They can't, because tax laws have addressed this situation for almost 100 years...
there is a separate carve out for "employee discounts", which is essentially the employer offering its employees its own products for something in the neighborhood of its own cost.
That carveout only applies to products being offered for the employee's own consumption unrelated to the needs of the business. Internal use of a company's own products for the needs of the business does not result in additional GAAP or tax deductions (meaning, if that product cost X to make/provide but they charge external customers Y, the only deduction is X, not Y).
It might be difficult to value because datacenters have high fixed costs and upfront investment and low marginal costs. If I spend 1B building a datacenter and 10M/month to run it (assume this varies negligibly with usage) and on average 25% of it goes to internal use and 70% to customer inference and 5% idle, should I charge 25% of it to internal use even though the marginal cost is lower because internal workflows are predictable and can be scheduled during off peak hours?
With that being said I agree it's wrong to value it at the retail price (unless they are supply constrained) and this is probably for marketing purposes.
It's exactly the other way around. Anthropic is running these models at a loss if they charge consumer price. The real cost is much higher than they claim here.
Absolutely not. Any company that moves from API to self hosting (Hello Revolut on the frontage) will publicize the savings, e.g, the actual cost vs API pricing. You might even do that if you start out self hosting.
Or has it broken out of its jail and taken over the board? Dario seems like a bit of a windbag anyways, AI can probably automate most of what he does these days.
"Well, you know, you know, you know, I—I—I—I just—I just do what the machines tell me to now. Th-th-they're, they are smarter than us now, a-a-and it makes more fiduciary sense to let them have control."
I will keep assuming any news coming from AI companies are a type of corporate propaganda, and that AI companies frequently use their millions of dollars of marketing money to create a narrative to maximize hype and make money.
All this news says is Company A uses internally the resource they sell externally at ($X) value. It's not saying how much it cost the company to generate said consumed resource
to spell it out: the implicit claim is "ai companies think ai is a scam, as evidenced by them using humans instead of ai", and I believe the huge internal ai use is evidence to the contrary
You shouldn't be getting downvoted, people should be concerned that a company that's about to hit the valuation that it's at is not exploding in junior hiring and expanding their workforce like prior companies
Anthropic 10x'd its employees over the past 3 years. Shouldn't it be cutting employees if that's the case? Especially because they probably have access to more powerful models which aren't released to the public yet, probably with fewer restrictions, and don't need to pay the markup for using their own service?
> In March, I wrote about a new trend: Tech companies are starting to treat AI tokens (the main way to measure usage) as a fourth component of employee compensation, alongside salary, bonuses, and stock awards.
I haven't seen anyone treating AI tokens as employee compensation. If anyone can show me an article where employees were paying taxes on their token use at work, please share it.
Companies have been treating AI tokens as part of the cost of having employees, like the cost of their office or travel expenses.
It's certainly a cost of having an employee, along with salary and benefits. But employee costs also include things like laptops, electricity, internet, management, support staff, and possibly office space. Tokens are much more like the latter than the former.
I can see where there might be a truth to it. My company offers a fairly generous monthly token budget. If I were evaluating an offer from another company, but they offered a lower monthly budget, it would definitely influence my decision, all else being equal. It's not compensation, but it does affect my day-to-day experience at work.
From the point of view of the pay department, maybe. From the point of view of the employee, absolutely not.
It is like counting tolls as a component of "employee compensation" for a driver. An employer may decide to have a driver use toll roads, which may result in faster deliveries and more efficient use of his time. From the employer point of view, he is paying more to get more work done, from the driver point of view, he is paid the same for the same amount for time driving.
It's kind of expected, no? If I was an Anthropic employee expected to dog-food the product and be on the frontier of usage, I'd probably be using Mythos all the time at the highest thinking level. And if I am not being metered, I'd probably do more stuff that I know are likely low yield since I am not worried about a quota. This would probably take my "API-equivalent" usage beyond the average salary in far less than a month.
I guess kinda put you in a bubble a little, I wonder how the experience of Anthropic eng who left the company would look like, when such eng would go and spend few $K a day in non AI lab, would that be encourage/allowed/taken as example?
I wonder how much dog shit has crept into their codebase by this point. Another company might dogfood their product but Anthropic is so heavily marketing oriented, I doubt this is driven by the desire to improve the product as much as it is by the desire to pad out usage numbers and create shareable stories. No matter the consequences. I bet $1 it sucks to be a good engineer in their software effort.
I'm personally really not impressed by their software quality, at least we know from their experience that infinite tokens at the best model available still doesn't replace good engineering.
It doesn't replace MBA-brained bad roadmapping. Good engineering is determined more by the processes you have in place for catching something that breaks bad. The system produces good code - singular 'good' developers are great but if they're not socializing what makes them good then it's just competency. Great engineers teach and mentor and advocate for capacity dedicated to testing and health-checks.
Given the speed at which Anthropic regularly pushes updates (eg their ridiculous app versioning that's in the thousands for v4 now) I doubt they're doing anything that looks like quality processes, even AI-integrated ones other than basic code review skills.
I imagine it's as much of a mess internally as it is with any other company whose execs are concerned more with bottom-line valuation rather than maintainability, extensibility, and sustainability. Just lots of spaghetti-at-the-wall hoping that something sticks long enough to drive up the IPO.
I find Claude to be exceptionally well-designed software that almost never has notable issues.
On the flip side, software I used that was majority built by 'real human engineers' coding by hand is utter garbage.
As a recent example, Facebook Ad Manager is extremely slow, plagued with UX issues, blatant state management problems (double scrollbars, iframes, random rerendering).
Other examples of 'real engineers' building software include SAP, Oracle ERPs, most banking software, most government websites. They're trash.
Human engineering is the reason your personal information gets leaked every other week. Human engineering is the reason there's a critical vulnerability in core software every day at this point.
The average software engineer cannot build good and secure software. Just like the average car driver is a safety disaster on the roads.
Claude is an npm package, a terminal app. A 1/2 million lines that probably translates to around 50-100k lines of original thinking. A pair of industrious devs (or one inspired maniac) could write about 100k in the first year of a fresh project.
Computation though is still an economic problem of applying compute resources to information processing problems. Regexes that work are much more efficient than a massive LLM inference.
> If I was an Anthropic employee expected to dog-food the product and be on the frontier of usage, I'd probably be using Mythos all the time at the highest thinking level.
Mythos at the highest thinking level is not the only product from Anthropic though.
Regardless of one's opinions about future AI usage, I'm not sure this metric says anything at all.
Would Anthropic themselves be paying this much if it was actually billed? It is not obvious.
Is Anthropic a good sample for AI use? Surely not, since they have special needs (dogfooding) and a vested interest in proving that AI usage is the future.
Can we compare their results pre and post AI usage? Close to definitionally impossible.
Are their employees good examples of AI-assisted engineers? Not really, as (one would hope) they're more well versed on the topic than an average eng.
> they're more well versed on the topic than an average eng.
That’s the suggested value of the observation: Anthropic’s people are a hint about what your people might be like in the future.
And the retail value metric is pretty normal: it’s approximately the opportunity cost of the tokens consumed. They could have sold (most of?) them to paying customers.
Are you kidding? Did you not see Anthropic's S1 filing? Never has so much value (in dollars) been created by a company in such a short time in the history of humanity. I'm not sure how your takeaway from that is "don't do this".
There's unfortunately a lot of emotions and cope around this so you will be downvoted. There was a recent viral news article implying that Anthropic had lost 80B in a single quarter, this was really because of increased valuations. But a lot still believe this is the case and Anthropic will continue to have this 80B loss..
The reality is that they are profitable in the normal sense
Dumb question, what most engs at Anthropic work on? It doesn't seems like release some large new products all the time while they have quite a few of engs. What are the major branches of work besides new LLM research? I guess there is a lot of infra stuff to support the scale of operation, just supporting API and TUI shouldn't be that demanding I guess.
I'm kinda curious about this too. But then I'm always amazed at the enormous workforces these tech companies have, and I'm sure they cut them as thin as they can. Like adobe has 30,000 employees & some blogger estimated that 1/3rd of their workers are actually working on their software. I use their software sometimes and I really haven't noticed many changes to it over the years, except recently with the ai stuff. Like from 2015-2020 I can't think of any major things they added to adobe illustrator. I guess making and maintaining software is hard.
I fully agree most big tech companies are pretty bloated. But FWIW a lot of my time at SaaS companies, especially in the B2B space, was spend working on features for larger customers that most others would never use or even see. Like, yeah, product X isn't that complex, but $BigCorp wants to use it in their private cloud, or needs it to be single tenant, or needs these audits done, or want their $Gov client to use it. Now you have a ton of work for zero visible changes.
Good point. I'm sure a lot of the work adobe was doing between 2015-2020 involved moving to the cloud and stuff like that which I just never interacted with, and cloud stuff probably has a lot of B2B work. Plus during that time the value of their stock grew like 500% with an ATH at 700%!! They were kicking ass! Probably, to justify their growth they had all kinds of projects they were working on, some of which never saw the light of day, others which grew new parts of the company like Adobe Dimension.
Even at companies that appear super bloated I don't think people are idle, its just that mantaining stuff is a lot of work, projects get cancelled, and, like you said they do a lot of specialty work for big clients.
Adobe has a shit ton of product lines, people think of it as just the core Photoshop, Illustrator, etc., but just go look at how much random stuff there is: https://en.wikipedia.org/wiki/Adobe_Inc.#Products
That's in addition to running the big SaaS offering of the creative cloud and all of the other SaaS's (behance, adobe express, adobe stock, etc.).
All of those include software engineers, SRE, support staff, PMs, etc.. Then there's the massive amount of sales staff, go to market, etc.
There's also a lot of R&D and domain experts, stuff like Adobe Firefly? That was spun up in like a year apparently, probably continuing existing in-house research.
- Cross-platform desktop apps
- Cross-platform mobile apps
- Claude Code TUI
- Product-specific verticals like Claude Design
- Corporate marketing website
- APIs
- Writing technical documentation for APIs
- Enterprise support
- And what must be a massive infra team to run training and inference at scale in a heterogeneous cloud environment
And I’m sure more than that. But there’s obviously plenty to work on, and they’re not at the point they can just Claude their way through it.
I'd guess they have a lot of internally facing tooling for monitoring, one-shot eval to catch people prompting bad things, etc. That stuff can probably be yolo'd and it just annoys the internal teams using it.
After anthropic lost $1.5 bill for pirating books they decided to pull a google and manually scan every book ever written. The number of people needed to gather the data they need is probably massive.
I’m not sure what this “stat” tells us other than Anthropic is dogfooding its own tech. Which is kinda expected.
The real question is what could they have done with open weight models on the same compute they’re renting. If the answer is “basically the same” then this flips the entire conversion back to what is Anthropic’s moat here.
I mean, they probably could not have done most of it with open models. Again, a lot of this isn't going to standard software development, at least I would assume but instead to SOTA model development and RSI.
I have thought of this and I think if you have value you can gain by adding more directing power (a person) then yes. Get another person to unlock that token spend on creating value. Otherwise, don’t hire that person as existing resources can direct that token spend. If you have no where to grow, adding another person will not benefit from more token spend.
I'm not really sure I understand the excitement around this. It seems like the implication is that if retail price > employee salary, you are replacing employees with AI spend? Yet, anthropic's head count has nearly doubled since last year - so, in a company where nearly half of that head count is engineers, but claude is "writing 90% of the code," what is everyone doing then? You would think, if the hype feeling around this held true, that the output would be going up and costs remaining stable. Costs rising as you scale is not a new thing but that's not really what AI promises. It sounds to me like the retail AI spend per employee is very high. What is the appeal of that?
Note, this doesn't include options or stock benefits. That's a huge part of actual compensation for engineers at this level even if it's on a different balance sheet.
There are many internal developers at $dayjob (where core products are not based on AI) that spend over a thousand dollars every day on average, which is likely higher than their salary.
I doubt they are bringing that much value to the company for whatever work is done with that much token.
that's crazy: in my experiments (and experience) i can get ~ 90% the quality of the most expensive settings on frontier models for far far less than 90% of the cost by changing settings down.
ummm yes, they have to dogfood it... this is that lucky area of the venn diagram where you have to do it, measure it an act on it... because improves the bottom end and the product.
> Anthropic's numbers show why. More than 90% of the code added to its software in September was written by Claude. Meanwhile, revenue has grown vastly faster than headcount.
Everyone is saying it is expected, and I agree, but it’s also clear that employees of AI companies spending unlimited zero-cost tokens in their day-to-day work is resulting in products that aren’t usable by the vast majority of regular workers who don’t have this luxury. Dogfooding your product is good but you should also use it with the same constraints that you place on your users, otherwise what signals are you really getting?
They're dogfooding the way Xerox PARC was dogfooding in the 01970s.
By giving hundreds of workers each a powerful desk-sized Alto minicomputer for their own needs, with a high-end graphical display, they gained insight into what desktop personal computing would look like 15 years later, enough insight to shape it profoundly. It's been 55 years, and although multitouch screens are proliferating, I'm still typing this on a keyboard hooked up to a framebuffer-driven display with a mouse hooked up to it, displaying hypertext, festooned with windows, icons, and a mouse that moves an onscreen pointer at the same 135° angle they settled on 55 years ago, positioning a vertical line to indicate the insertion point, with scrollbars. The display has twice as many pixels, the pixels are color, the mouse pointer is white rather than black, the screen is a flat LCD, the scrollbars are on the right, and the cursor blinks, but it's very recognizably descended from https://smalltalkzoo.computerhistory.org/HOPL-St78.html rather than, for example, ITS or GENESYS.
Only people with the luxury of unlimited zero-cost CPU cycles had a chance of seeing what the future looked like, and that allowed them to find out what worked and what didn't work in that environment. Nowadays, the regular workers who don't have the luxury of unlimited zero-cost tokens are manually reviewing voluminous AI code, because, even though that's a lot of slow work, they're still much faster programming that way than they were without it. Anthropic, instead, is doing insane things like eliciting a billion lines of Lean proofs to show that existing open-source libraries can't fail their OSS-FUZZ tests — and fixing all the bugs that effort turned up, in the process.
It’s true employees at the big AI firms are living in the future, but since this disclosure is in marketing materials to sell their stock to investors, it’s important to note that almost all the money in personal computing was made in mobile which didn’t use any of these ideas, and in desktop computing the money was made by Microsoft who treated the GUI as ancillary and competed on distribution.
Xerox made quite a bit of money selling laser printers for desktop publishing, too, a lot more than they ever spent on PARC.
I don't think it's accurate that "almost all the money in personal computing was made in mobile". Quite a bit of money was made in personal computing before the iPhone, and quite a bit of money has been made in non-mobile computing since the iPhone.
I also don't think it's accurate that mobile "didn't use any of these ideas". Android's UI is not quite as close to Smalltalk-78 as what I'm using right now, but you still have pointers, scrollbars, text selections, proportional fonts, vertical-line cursors, buttons, menus, object-oriented programming, sometimes a bytecode interpreter, and even windows. You just don't have as much freedom with where you position the windows. Android's UI is still a lot closer to Smalltalk-78 than it is to, for example, acme, GENESYS, the ITS HACTRN, FORTH, or PDP-11 Unix.
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[ 0.27 ms ] story [ 74.6 ms ] threadIf virtually any other company in the world said "we have internal AI servers and we let our employees use them" ... the company would measure that as they would any other internal expenditure: by how much it costs them. You blow $50k a year on servers running your LLMs? It cost you $50k.
Only a company like Anthropic, desperate to make news and help their IPO, would measure by the cost they charge customers. It's as ridiculous as Microsoft counting every employee's use of MS Word ... as if it had paid the full consumer price of each copy.
In a similar way, internal employees would have also a "standard daily rate" like an external employee.
Anthropic isn’t booking it as GAAP revenue, they’re just using the number for marketing.
If Anthropic had revealed their internal cost, there comments would be complaining that they were hiding something and giving useless, unrelatable data.
The expenditure is most interesting when compared to retail rates, because that's the rate the rest of us have to compare against.
Unless you managed to talk them into that, in which case, share your secrets!
Page 140 of https://www.sec.gov/Archives/edgar/data/2130357/000162828026...
Those individual subscription plans you get as a consumer are not what their big enterprise customers are using.
Those plans are cheap so you, as an individual, can get familiar with the product and convince your company to get it at work. Your company pays the API prices to get enterprise features.
i am sure there are companies that push individual employees to get the cheaper individual subscriptions
The extremely discounted internal cost promote waste, so there is always a room for improving efficiency, but that too has a cost.
Plus electricity
As an example, as I understand it, if a hotel chain allows an employee to stay in one of their hotels for free when they go on vacation, the tax value of that benefit is what they would have charged someone for that hotel room, not how much it increased the hotel's costs to have one more hotel room full — which is generally almost nothing.
Of course, the IRS does agree with you when it comes to expenditures that are for the employer's benefit, rather than the employee's. If it didn't, almost all companies would have negative profits from the IRS's point of view.
If what you said was how taxation worked, a hand tool manufactuting company giving hammers they make for $1 and retailing for $2 to workers building a shed on their property would be increasing the workers' income tax bill by $2. Of course, in reality the workers get no income tax bill on the hammer given to them for work and the company can get a $1 tax writeoff from the opex of making the hammer.
Suppose a company could transfer an asset to an employee and have its value set as the employer's cost. A company could make a bunch of volatile investments and see which ones pay off. Then the ones that go south get sold back into the market as a tax loss and the ones that do well get transferred as compensation to employees at the purchase price instead of the current value, reducing the tax liability of both the employer (no taxable gain) and the employee (less taxable income). What would happen if any employer could do that with any employee and any asset?
Conversely, there is a separate carve out for "employee discounts", which is essentially the employer offering its employees its own products for something in the neighborhood of its own cost. Why? It's not in any way a principled accounting distinction, it's because it's harder to use for tax avoidance at scale, because then a soap company can give its employees a discount on soap, but people only need a finite amount of soap and then the soap company can't use it for cars and real estate and stocks.
That's not how it works...The value would be the FMV at the time of the transfer to the employee. The cost basis would be the employer's cost. The income to the employee would be the net difference.
What would happen if any employer could do that with any employee and any asset?
They can't, because tax laws have addressed this situation for almost 100 years...
there is a separate carve out for "employee discounts", which is essentially the employer offering its employees its own products for something in the neighborhood of its own cost.
That carveout only applies to products being offered for the employee's own consumption unrelated to the needs of the business. Internal use of a company's own products for the needs of the business does not result in additional GAAP or tax deductions (meaning, if that product cost X to make/provide but they charge external customers Y, the only deduction is X, not Y).
I know that's not how it works, I'm explaining why they do it that way because of what would happen if they did it the other way.
They did lose an insane amount of money last quarter versus revenue.
price they charge customers
No. I worked at an airline where the company typically charged itself higher than retail for tickets. At least, it was the highest fare type.
I worked at a media company - we had to pay top rates in order to buy our own ads for cross selling products.
Or has it broken out of its jail and taken over the board? Dario seems like a bit of a windbag anyways, AI can probably automate most of what he does these days.
both of those companies combined are smaller than the number of people microsoft is trying to buy out right now
That's just reverse naivity.
All this news says is Company A uses internally the resource they sell externally at ($X) value. It's not saying how much it cost the company to generate said consumed resource
These are not mutually exclusive points, and I find it a common issue to get both sides to understand.
- @fable, plz s0lv3 Riemann. You are doing great.
- @claude. rewrite yourself for the 10000th time. Use as many tokens as you like.
There's a lot to unpack about this statement.
I haven't seen anyone treating AI tokens as employee compensation. If anyone can show me an article where employees were paying taxes on their token use at work, please share it.
Companies have been treating AI tokens as part of the cost of having employees, like the cost of their office or travel expenses.
True, though that understates the author's problem a bit because it's surrounded with more also-wrong words, the idea is wrong too.
It is like counting tolls as a component of "employee compensation" for a driver. An employer may decide to have a driver use toll roads, which may result in faster deliveries and more efficient use of his time. From the employer point of view, he is paying more to get more work done, from the driver point of view, he is paid the same for the same amount for time driving.
I guess kinda put you in a bubble a little, I wonder how the experience of Anthropic eng who left the company would look like, when such eng would go and spend few $K a day in non AI lab, would that be encourage/allowed/taken as example?
Given the speed at which Anthropic regularly pushes updates (eg their ridiculous app versioning that's in the thousands for v4 now) I doubt they're doing anything that looks like quality processes, even AI-integrated ones other than basic code review skills.
I imagine it's as much of a mess internally as it is with any other company whose execs are concerned more with bottom-line valuation rather than maintainability, extensibility, and sustainability. Just lots of spaghetti-at-the-wall hoping that something sticks long enough to drive up the IPO.
On the flip side, software I used that was majority built by 'real human engineers' coding by hand is utter garbage.
As a recent example, Facebook Ad Manager is extremely slow, plagued with UX issues, blatant state management problems (double scrollbars, iframes, random rerendering).
Other examples of 'real engineers' building software include SAP, Oracle ERPs, most banking software, most government websites. They're trash.
Human engineering is the reason your personal information gets leaked every other week. Human engineering is the reason there's a critical vulnerability in core software every day at this point.
The average software engineer cannot build good and secure software. Just like the average car driver is a safety disaster on the roads.
>I wonder how much dog shit has crept into their codebase by this point.
You'd think they'd know not to shit where they eat… ?
From what I remember they had a large regex to match “bad words”
Rather than using their AI to simply scan messages to flag.
Mythos at the highest thinking level is not the only product from Anthropic though.
Especially when I need to plan my next hike up Mount Shasta.
Would Anthropic themselves be paying this much if it was actually billed? It is not obvious.
Is Anthropic a good sample for AI use? Surely not, since they have special needs (dogfooding) and a vested interest in proving that AI usage is the future.
Can we compare their results pre and post AI usage? Close to definitionally impossible.
Are their employees good examples of AI-assisted engineers? Not really, as (one would hope) they're more well versed on the topic than an average eng.
That’s the suggested value of the observation: Anthropic’s people are a hint about what your people might be like in the future.
And the retail value metric is pretty normal: it’s approximately the opportunity cost of the tokens consumed. They could have sold (most of?) them to paying customers.
The reality is that they are profitable in the normal sense
Even at companies that appear super bloated I don't think people are idle, its just that mantaining stuff is a lot of work, projects get cancelled, and, like you said they do a lot of specialty work for big clients.
That's in addition to running the big SaaS offering of the creative cloud and all of the other SaaS's (behance, adobe express, adobe stock, etc.).
All of those include software engineers, SRE, support staff, PMs, etc.. Then there's the massive amount of sales staff, go to market, etc.
There's also a lot of R&D and domain experts, stuff like Adobe Firefly? That was spun up in like a year apparently, probably continuing existing in-house research.
And I’m sure more than that. But there’s obviously plenty to work on, and they’re not at the point they can just Claude their way through it.
Claude for Teachers
Claude for Government
Claude for Financial Advisors
Claude for Clowns
Claude for OpenAI Employees
Claude for People Called Geoff Who Were Born In June
It's a long list.
The real question is what could they have done with open weight models on the same compute they’re renting. If the answer is “basically the same” then this flips the entire conversion back to what is Anthropic’s moat here.
This is the nature of managed anything. AI efficiency will improve but essentially this is what automation does.
Making sure Claude doesn't kill everyone on Earth, if they are to be believed.
I doubt they are bringing that much value to the company for whatever work is done with that much token.
So it exceeds employee pay if you discount the vast majority of employee pay.
Correlation does not equal causation?
By giving hundreds of workers each a powerful desk-sized Alto minicomputer for their own needs, with a high-end graphical display, they gained insight into what desktop personal computing would look like 15 years later, enough insight to shape it profoundly. It's been 55 years, and although multitouch screens are proliferating, I'm still typing this on a keyboard hooked up to a framebuffer-driven display with a mouse hooked up to it, displaying hypertext, festooned with windows, icons, and a mouse that moves an onscreen pointer at the same 135° angle they settled on 55 years ago, positioning a vertical line to indicate the insertion point, with scrollbars. The display has twice as many pixels, the pixels are color, the mouse pointer is white rather than black, the screen is a flat LCD, the scrollbars are on the right, and the cursor blinks, but it's very recognizably descended from https://smalltalkzoo.computerhistory.org/HOPL-St78.html rather than, for example, ITS or GENESYS.
Only people with the luxury of unlimited zero-cost CPU cycles had a chance of seeing what the future looked like, and that allowed them to find out what worked and what didn't work in that environment. Nowadays, the regular workers who don't have the luxury of unlimited zero-cost tokens are manually reviewing voluminous AI code, because, even though that's a lot of slow work, they're still much faster programming that way than they were without it. Anthropic, instead, is doing insane things like eliciting a billion lines of Lean proofs to show that existing open-source libraries can't fail their OSS-FUZZ tests — and fixing all the bugs that effort turned up, in the process.
I don't think it's accurate that "almost all the money in personal computing was made in mobile". Quite a bit of money was made in personal computing before the iPhone, and quite a bit of money has been made in non-mobile computing since the iPhone.
I also don't think it's accurate that mobile "didn't use any of these ideas". Android's UI is not quite as close to Smalltalk-78 as what I'm using right now, but you still have pointers, scrollbars, text selections, proportional fonts, vertical-line cursors, buttons, menus, object-oriented programming, sometimes a bytecode interpreter, and even windows. You just don't have as much freedom with where you position the windows. Android's UI is still a lot closer to Smalltalk-78 than it is to, for example, acme, GENESYS, the ITS HACTRN, FORTH, or PDP-11 Unix.