It it wasn't for competing models, this would all make sense.
If this was just OpenAI and Anthropic, this money would represent all of your salaries being soaked up and your job functions being privately consumed by two companies.
Fire three quarters of your eng staff and subscribe to Anthropic is a valid trillion dollar business. Scary to say, but that's the value prop on the filing.
Except that there's actually tons of competition and no moat. The math problems are just a distraction from that.
How on earth are you worth a fraction of that when there are a dozen Chinese companies doing the exact same, with half of them just giving away the goods for free?
ok, but the valid business prop is to be a dependent on anthropic, indistinguishable from just being a second class citizen, since your entire networth can't be extracted from anthropic.
Go nuts with it, but we're at the SciFi dystopia test with: how do mega corporations even form? Well, this is certainly the plausible reality, they just start aggregating random income streams because their product is essentially the only thing that makes the business profitable. Without it, it can't compete.
Hopefully this sounds skeptical, but I don't see how you can have an independent business and be entirely dependent on third party for your operations.
>> I don't see how you can have an independent business and be entirely dependent on third party for your operations
Like a lumber mill that buys logs from a logging company? Who subcontracts to individual fallers? Who buy their chainsaws from a chainsaw company, their fuel from a petrochemical company? No business isn't entirely dependent on third parties. That's what it means to exist in a healthy economy.
A "farm-to-table" megacorp that owns everything from the source of every raw material through to the finished product is a nightmare, an entity that needs to be reigned in and broken up. Capitalism is a competitive game, but a game that can never be allowed to end.
But what about the digital economy? It's interesting that the length of the supply chain for digital goods and knowledge work is nothing like physical goods. Google, Microsoft, and Apple are end to end, don't have to depend on any other software company if they don't want to (until LLMs, anyway, except Google).
>> don't have to depend on any other software company if they don't want to.
I am rather sure that Google is heavily reliant on Microsoft and Apple to produce the operating systems used on devices that are in turn used to view Google's ads. And Microsoft is heavily reliant on hardware manufacturers (firmware is also software) to make the machines that Windows lives inside. And Apple is reliant upon a thousand and one companies that enable the innumerable mobile networks, which include many layers of non-apple software.
They are not reliant on them second-to-second. If anthropic tells these businesses they can't use anymore, or price hike, or ... then those businesses are kaput, right that second.
Plus you can bet your firstborn everything passes through the NSA first. So seems like a spectacularly bad idea, especially for .eu business.
There's no "right this second" way to kaput Google, not even if you're Microsoft.
The difference is that the lumber mill isn't giving the logging company all the information required to run a lumber mill and the logging company isn't turning around and selling said information to anyone for $200/mo.
In my scenario, the only way anthropic and openai are profitable entities if they directly absorb the capacities of the companies, the same way Amazon "basics" exist to absorb the generic consumer product levels.
I'm not pointing out they'll take your secrets and sell them to the competition. I'm pointing out they will _be_ your competition. The same way Amazon basics competes with it's business interests.
> I don't see how you can have an independent business and be entirely dependent on third party for your operations.
All businesses are reliant on multiple third parties doing their thing in order for the business to be viable. A lot of companies exist at the whims of Amazon or Walmart.
I don't understand. People are fighting to get into funding rounds for Anthropic. No one is forcing anyone to invest. Anthropic isn't stealing any money,
it’s almost like you intentionally missed the commenters point. i can’t wait til you idiot mindless cockroach ai bros stop dictating our financial futures with such stupid bullshit and just crawl back under your rocks.
well, they will be stealing money once they won't be able to keep up with stakeholders demands and crush the AI economy forcing gov to bail them out. Time is indeed a circle i suppose
Common misconception, they are a public benefit corporation, which is a shorthand that means they do not serve for the benefit of their public shareholders but instead are ruled exclusively by their founders and Ben Bernanke. It’s tongue in cheek!
Shareholders in PBC have no sway. Look up drakes landing v. tilden park from earlier this year. A PBC was in financial trouble and two specific lenders proposed a solution: financing and debt conversion that would increase their combined ownership from roughly 25% to 85%, heavily diluting all other shareholders. An independent special committee of the PBC approved it.
Shareholders holding more than half the stock had requested a vote against this, but none occurred. They were told that the mission of the PBC came first.
It’s an absolutely crazy financial loophole. Basically, if you found your company under these PBC rules (which have only existed for like a decade), you can avoid any accountability to shareholders and do whatever the fuck you want. It’s a total subversion of property law. You can own a majority of the company and they can still unilaterally vote to dilute your holdings to zero.
When they go public, given their valuation, anyone invested in index funds will be buying. That’s your pension funds, your 401ks, etc.
When they’re unable to meet their… *checks notes*, $895,400,000,000.00 in commitments, what do you think will happen to the people that bought at IPO prices?
Okay, if that happens... Are you seriously unaware where the money comes from? Because then his point would be even stronger, after all: who picks up that bill? Exactly the government, which is financed by the working class, not by the asset holders.
> When they go public, given their valuation, anyone invested in index funds will be buying.
But that's not today. Even if/when they do go public, those pension funds are choosing to invest. They're not forced to invest. People buy S&P500 indexes because they're convenient. They're not forced to invest in indexes.
...and do what with the money - find a good CD? My retirement account would like a word. Also, not sure how they are stealing your pension. Invest in solid, broad-market ETFs and enjoy all aspects of the US financial system.
My advice: spend some time creating a long-term financial family planning document, review it with other competent people, and stick to it! Regardless of market up/down events, your plan stays in place. It has worked extremely well for me over the past 40 years (including all sorts of "crashes" that stabilized over time).
It is but its average, not median. Plenty of super senior people that Anthropic poached for clout, network and for them not to work anyone else. Plus a lot of the early researches. A lot of cash going there
Hence another problem for Anthropic if it becomes public.
Outsized stock based compensation when you’re posting massive GAAP losses just makes it look like you’re robbing shareholders… because in a real sense you are.
Robbing shareholders? That same mentality justified Ballmer’s decision to replace free coffee with paid coffee machines. Which marked the beginning of a long decline for MS: an increased stock price but long term internal atrophy.
The shareholders benefit when the employees have an incentive to do good work.
Stockholders have full knowledge about the total cost of these compensation packages. They're not being tricked into investing. It doesn't satisfy any definition of robbery.
From my experience, the pay of AI talent is abysmal. People are still being laid off constantly. The people who are earning huge sums are largely sycophantic grifters. I dislike the narrative of highly paid AI engineers because it's simply not true except for maybe a few dozen people.
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[ 3.0 ms ] story [ 57.1 ms ] threadMind blowing I know
If this was just OpenAI and Anthropic, this money would represent all of your salaries being soaked up and your job functions being privately consumed by two companies.
Fire three quarters of your eng staff and subscribe to Anthropic is a valid trillion dollar business. Scary to say, but that's the value prop on the filing.
Except that there's actually tons of competition and no moat. The math problems are just a distraction from that.
How on earth are you worth a fraction of that when there are a dozen Chinese companies doing the exact same, with half of them just giving away the goods for free?
Go nuts with it, but we're at the SciFi dystopia test with: how do mega corporations even form? Well, this is certainly the plausible reality, they just start aggregating random income streams because their product is essentially the only thing that makes the business profitable. Without it, it can't compete.
Hopefully this sounds skeptical, but I don't see how you can have an independent business and be entirely dependent on third party for your operations.
Like a lumber mill that buys logs from a logging company? Who subcontracts to individual fallers? Who buy their chainsaws from a chainsaw company, their fuel from a petrochemical company? No business isn't entirely dependent on third parties. That's what it means to exist in a healthy economy.
A "farm-to-table" megacorp that owns everything from the source of every raw material through to the finished product is a nightmare, an entity that needs to be reigned in and broken up. Capitalism is a competitive game, but a game that can never be allowed to end.
I am rather sure that Google is heavily reliant on Microsoft and Apple to produce the operating systems used on devices that are in turn used to view Google's ads. And Microsoft is heavily reliant on hardware manufacturers (firmware is also software) to make the machines that Windows lives inside. And Apple is reliant upon a thousand and one companies that enable the innumerable mobile networks, which include many layers of non-apple software.
Plus you can bet your firstborn everything passes through the NSA first. So seems like a spectacularly bad idea, especially for .eu business.
There's no "right this second" way to kaput Google, not even if you're Microsoft.
I'm not pointing out they'll take your secrets and sell them to the competition. I'm pointing out they will _be_ your competition. The same way Amazon basics competes with it's business interests.
This isn't new though. A ton of software companies are already completely dependent on AWS or Azure or whatever.
All businesses are reliant on multiple third parties doing their thing in order for the business to be viable. A lot of companies exist at the whims of Amazon or Walmart.
It is not for the benefit of society, it is not good engineering, it is pure financial fuckery. ENRON smartest guys in the room esque.
Am encouraging everyone I know to dump US bonds, US stocks because to hell with these hucksters trying to steal my pension.
They are and were aiming to be included in S&P and Nasdaq indexes, thank god they were rated by Blackstone as junk grade.
Even outside of that their 800 billion, and I assume OpenAI's equally shitty compute contracts pollute the MAG7 revenue lines.
How much does it represent the MAG7 revenue books? How much is their shitty stock deal counted towards the above assets?
When that money fails to materialize, again john taxpayer will be looking to bail out whilst the scum run away having cashed out ASAP.
Fuck all the people involved.
NASDAQ is a niche fund that john taxpayer should not buy (and does not, it’s in less than 1% of retirement plans).
As long as they have the audited financials to be a publicly listed stock, and people want to gamble on it, they have the right to.
None of this is true. Your hatred has blinded you, my friend.
Shareholders in PBC have no sway. Look up drakes landing v. tilden park from earlier this year. A PBC was in financial trouble and two specific lenders proposed a solution: financing and debt conversion that would increase their combined ownership from roughly 25% to 85%, heavily diluting all other shareholders. An independent special committee of the PBC approved it.
Shareholders holding more than half the stock had requested a vote against this, but none occurred. They were told that the mission of the PBC came first.
It’s an absolutely crazy financial loophole. Basically, if you found your company under these PBC rules (which have only existed for like a decade), you can avoid any accountability to shareholders and do whatever the fuck you want. It’s a total subversion of property law. You can own a majority of the company and they can still unilaterally vote to dilute your holdings to zero.
When they’re unable to meet their… *checks notes*, $895,400,000,000.00 in commitments, what do you think will happen to the people that bought at IPO prices?
Retail is a small part of those index funds, and the wealthy won't be happy with losing paper value.
But that's not today. Even if/when they do go public, those pension funds are choosing to invest. They're not forced to invest. People buy S&P500 indexes because they're convenient. They're not forced to invest in indexes.
My advice: spend some time creating a long-term financial family planning document, review it with other competent people, and stick to it! Regardless of market up/down events, your plan stays in place. It has worked extremely well for me over the past 40 years (including all sorts of "crashes" that stabilized over time).
… this is fine …
Add another $500k in stock options on top of that, and most of these folks shouldn't have to worry about their future even if we reach RSI and ASI.
Outsized stock based compensation when you’re posting massive GAAP losses just makes it look like you’re robbing shareholders… because in a real sense you are.
The shareholders benefit when the employees have an incentive to do good work.
https://steveblank.com/2009/12/21/
That's fine when they are accountants, it's important to tell the decision makers the costs. The decision makers know the value.
The problem is when the decision makers don't know the value.
Anthropic's internal AI use, at retail prices, now exceeds its employee pay
https://news.ycombinator.com/item?id=50339494