ChatGPT became publicly available in November 2022, and Claude followed in March 2023. It's year 4. It's foolish to think we know who the big names will be 20 years down the line, which is the kind of timeline bond investors are thinking about. A lot of people probably wish they could have invested (or invested more) in Google or Facebook in 2006, but they are probably very glad they did not invest in Yahoo or MySpace (or Friendster or Tumblr .. you get the idea) at the time, despite looking very promising (MySpace was beating Google on pageviews on some days in '06 and '07). Instagram and Snapchat and TikTok and WeChat didn't even exist yet.
That argument swings both ways. There's no real reason to bet on OAI or Anthropic. Not with the rise of local models and the increasingly desperate attempts at regulatory capture.
That's what I'm saying. Either one could be Facebook. Or it could be Friendster. The rise of local models raises the even more daunting possibility that nobody becomes Facebook, but you have to imagine somebody will win the consumer market for people who just don't want to bother figuring out a local setup. That market is orders of magnitude less lucrative than the enterprise market, but a company that dominated it would still be one of the hundred or so largest in the world.
I’ve discussed with many people at work, all engineers, they’re weirdly oblivious. Most are shocked when I say things like OpenAI and Anthropic are gonna crater.
There’s a notable difference between saying those companies may crater, and predicting confidently that they will crater. The wording of your comment makes it seem like a foregone conclusion.
I still think OpenAI holds on as a Google competitor and Anthropic does fine as a business tool. Do they match their outsized spending with future growth? Well, that I'm not very confident about. A lot of this really comes down to what is the business model of integrating AI with 3rd party systems and I don't see that anyone has truly cracked that yet.
I talk to our risk lead and he was also weirdly oblivious as well. The whole company is dependent on them not going down the shitter. Surely that's a tangible risk?
I'm indifferent either way myself. It's just shocking the amount of ignorance.
It's the cryptobro craze but for AI. It's tiresome, I don't have AI fatigue, I love using Claude, I have aibro fatigue. I'll lump in the people all in on AI, and that includes anyone who hates it vehemently because they just have to sour conversations.
The world is using 300T token a day. Barely anyone is using AI. This number would grow 30x. If there is anything, Google, OpenAI, Anthropic are undervalued by a great deal.
Cost per token is going to tank; it's a race to the bottom. The frontier model providers have no moat between each other and eventually even the open weight models will be "good enough" for almost every purpose.
Right now the market is expecting something a lot more than "sells a lot of tokens" out of these things to justify their valuation.
There’s no business in tokens. Zero. The only business is selling compute and Anthropic rented all its compute.
Structurally there in a terrible position on what’s unfolding now with the completely collapse of model valuations. With truly “open” models gaining more and more momentum models are basically worth nothing and “token” prices are collapsing to the cost of compute. That doesn’t leave anything on the table for the Anthropic and Open AI’s of the world.
If everyone is using AI the ROI could just keeping up with everyone else. If anything Intelligence is now becoming a tax or the cost to use the toll road.
ROI in the space is not complicated, their revenue is already insane. You just drive down costs with fixed capex (GPUs), that will continue to pay out over 5-10 years. These are growing pains, they need to make it past the GPU scarcity/ramp up phase.
An IPO is where the investors cash out to spend money on something else. It’s where the founders and early employees get rich enough to start chasing other interests, or just retire outright.
My understanding is that the underwriting bank and early investors and institutional investors win first, then founders, after that early employees. Usually offloaded onto the robinhood crowd who excitedly buys in.
It's also often also part of the employee retention plan. If you discover your boss has lied to you shortly after an IPO or a merger, then odds are good they were trying to hold onto you by any means necessary until their bonus was paid out.
I've had several people I trusted destroy our relationship this way over the years.
That certainly comes with the territory. However, being a public company offers a lot of opportunity for the company - easier access to capital, to enterprise/government contracts, and attracting talent that want less risky compensation.
There's also a pretty big morale hit for the people who fall below the remuneration cutoff of peers they are almost as good as or feel they are better than. I've seen a few different people lose almost all of their fucks because some dweeb is buying fancy cars and they're still paying their mortgage every month.
Amazon didn’t borrow anywhere near this much. They also had the sales tax loophole that let them outprice the competition and take their market share for over a decade.
Right, OK, but then that's the interesting or newsworthy claim, not the company's ratings status --- junk status for companies that later went on to become among the most successful in the entire marketplace is not unprecedented.
As someone who uses Claude Code daily for work, I fail to see how they lack a real product. It provides tangible value on a day-to-day basis, something my workplace is happy to pay for.
The more interesting questions aren’t about whether they have a real product (they do). It’s whether they can defend that product from competitors, such that their future revenues can justify the massive investments made.
The consumer product is losing them money and the possibly profitable enterprise product (API) is a smaller % of revenue and in an increasingly competitive niche. The constant disingenuous baiting and switching between the two whenever convenient is very tiresome.
That makes sense, anthropic is in a rapidly changing market. Revenue could crater if a better model is released by a competitor. AI demand could fall behind. Doesn't seem like that will happen, but its definitely not investment-grade debt worthy either.
Even if Anthropic invents a godlike frontier model that can do anything, it feels like they won't have a moat for very long before competitors like DeepSeek offer something almost as good for a fraction of the price.
Demand is currently not sustainable because they - ant and OAI - refuse to raise prices.
Infact they’re going to end up in price competition unless they field an army of ‘FDE’ who go to every large firm and reorganise the operations around their models and displace labour.
I was under the impression this was only on the consumer side? I have heard of contracts expiring and them wanting a lot more money now (forcing from generously subsidized enterprise seat plans to all API usage). Specifically Anthropic in this case.
Same thing as with SpaceX. If there is that much of an equity buffer, it should be investment grade.
That it isn't means that the bond market doesn't trust the valuations at all.
If they can't raise capital then yes that will have a huge impact on a company that's a massive tower of financial engineering as coreweave have been learning.
Many companies IPO'd in the late 1990s and did not exist 10 years later.
Let's say that the house of cards crashes down and takes the market with it who will shutdown, survive or have no choice but to get acquired for a 90% discount.
Some will be just alive long enough for the early investors to pull out enough before the market crashes.
And who will be the Amazon and grow 2500x over the next 30 years?
Now, I'm not saying that's going to happen -- but if you take analogies from the dot-com era and assume they're going to play out in the same way, you can't just cherry-pick the bad ones.
Amazon had valuation of $60M at their first venture round, and it took them 19 years to 3500x it to $200B.
Anthropic had valuation of $550M at their first venture round, and assuming it IPOs at roughly $2T, it will take them 5 years to give this 3500x return to their initial investors.
Companies IPO much later now because the laws changed. They used to be forced to IPO much earlier because employees shareholders pushed them over the threshold for # or private shareholders.
So you're absolutely correct about the comparison.
That said, I bet whatever happens over the next 20 years goes beyond what any of us can imagine. I wouldn't be surprised if the winners of this paradigm are worth hundreds of trillions. Sounds ridiculous until you look backwards and valuation a and consider this is an exponential curve and time is compressing.
None of the current vintage of IPOs are going to 2500x in our lifetimes (inflation adjusted at least..). The VC to IPO process is totally different now.
Companies are staying private longer, raising many orders of magnitude more private funding, and IPOing straight into "top 10 biggest companies in history" size.
If you IPO at $1.5T you are already equivalent to ~1.5% of World GDP.
Thus is just for scale, as comparing GDP vs a company market cap doesn't make total sense since GDP is 1 year economic activity and market caps represent discounted future cashflows of future economic activity...
Let's say Anthropic IPOs at $1.5T and grows even 1000x over 20 years, it would be worth $1.5P (petabillion?). If it had a 20x earnings multiple like google this would imply Net Income of $75T. Mag7 total Net Income for 2025 was $500B or $0.5B.
World GDP is $125T, and has grown less than 5%/year before/thru/after DotCom. So lets say in 20 years its $250B and Anthropic is capturing 30% of world GDP in earnings (not revenue, that would be even higher)!!
You can cherry pick the bad ones if the point you want to make is that it's risky. Nobody is saying Anthropic is definitely going to 0, just that there is a risk.
But from an economics perspective OAI/Antropic are more similar to Amazon than to Pets.com. Pets.com always had a heavily negative COGS - they were in the business of selling $20 bills for $15. On the flip side, Anthropic appears to be positive on COGS, and OAI could get positive by cutting limits on free and $20 plans. OAI/Anthropic are negative on the books mostly because of massive R&D expenses. This compares well to Amazon circa 1999, which was positive on COGS but negative overall due to massive buildout R&D costs.
Note that I'm not saying OAI/Anthropic are destined for success - because the rate of change combined with competition with cheap Chinese models is pretty novel in the business case history. But I am saying that pessimistic dot-com-boom comparisons don't seem to be all that deep.
> And who will be the Amazon and grow 2500x over the next 30 years?
Almost certainly nobody if you're tracking post-IPO growth.
And not because there won't be survivors/winners when the next crash comes (there probably will be) but because of the market changes (in the wake of legislation like the JOBS act) that result in these companies having their significant growth periods prior to IPO instead of after it.
IPOs used to be a launch pad to growth, now they are just a way for private investors to finally cash out when the company is already close to peak valuation.
A) they’re all getting acquired by these IPO seeking ones
B) nobody is IPOing at $400 million like Amazon did except SPAC share dilution scams, that you have to be willing to pick up at $30 million a year later
C) private secondary markets solve that, for some and are pretty great
D) tokenized synthetic and SPV backed private secondary markets in crypto ecosystems like Hyperliquid give you that exposure too, so now everyone can replicate the 90s
Anthropic won't let people make video games. They are on the wrong side of history.
They are so going to get disrupted. Chinese open weights models will have no such limitations, and there's no way we'll let Anthropic outlaw or ban them. (And even if they did, they can't police the whole world.)
There is no moat. Anthropic should be playing nice, not trying to create a god while holding engineers under their thumb. We will route around it.
> Wall Street banks earlier this week closed the North Star deal, which provides the financing for Anthropic to lease 1.5 gigawatts of Google’s semiconductors.
This line is certainly eyebrow-raising to the educated layman.
Apparently it means that anthropic is leasing a Google data center whose constituent servers draw 1.5 GW of power running representative workloads.
It's interesting you imagine nine shares would suffice for a large site like HN. No, the link doesn't work for me. Honestly, this kind of "sharing" seems a bit disingenuous at this point.
He is the article:
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Blackstone told investors Anthropic may not receive an investment-grade rating immediately after going public, a reversal from its previous guidance that would complicate the AI lab’s ability to finance its massive spending.
The private capital giant told investors in Anthropic’s latest $63bn chip financing deal that the start-up is expected to receive a “high” junk rating from major credit rating agencies after its initial public offering, according to people familiar with the matter.
Blackstone is acting as an anchor investor on the deal, known as “Project North Star”, and is working with banks that stumped up financing on selling the debt on to other investors.
Anthropic filed to go public on Monday, setting up what could be the largest listing of all time next month. The AI lab’s prospectus sketched out its “bold but sane” plans to spend more than $800bn on computing infrastructure between now and 2045.
While Blackstone had told its investment partners in recent months that it was expecting an investment-grade rating for Anthropic before year-end, it has recently signalled that a rating in the double B range or above is more likely given the guidance it has received from major credit agencies, the people said.
Such a designation would limit the pool of capital that Anthropic could tap because many insurance and pension funds are restricted from taking large positions in junk-rated borrowers. As a result, the company might need to continue to rely on its suppliers with high credit ratings to support its debt-raising efforts.
US tech stocks slid to session lows on Friday following the FT’s report on Anthropic’s rating, with the Nasdaq 100 down 3.7 per cent in afternoon trading. Markets were sharply lower prior to the report after earnings from Amazon and Intel worsened fears about the sustainability of the AI boom.
“It’s all about access to credit, it really matters . . . if [Anthropic] isn’t investment grade, the cost of credit goes higher, that’s not good for anyone,” said a US tech-focused portfolio manager.
“It’s a bloodbath out there,” they added, referring to the sell-off in stocks.
Wall Street banks earlier this week closed the North Star deal, which provides the financing for Anthropic to lease 1.5 gigawatts of Google’s semiconductors. More than $42bn of the senior loans is guaranteed by Broadcom, which co-develops the chips and has an investment-grade rating, while $18bn of the junior debt is backed by the AI start-up’s lease payments.
Institutional investors covet senior debt because it takes priority over junior loans in the case of a default. Broadcom’s high A-tier credit rating was an important factor in allowing Anthropic to secure the financing.
Blackstone’s funds invested in $9bn of the junior debt at a lucrative yield of more than 10 per cent, the FT previously reported. Bankers for Anthropic and rival OpenAI have also lobbied the largest rating agencies to grant the AI labs investment-grade ratings after their IPOs.
Project North Star’s $18bn junior debt, which exposes lenders more acutely to Anthropic’s credit risk, has been assigned a double B plus rating with positive outlook from Kroll Bond Rating Agency, a slight improvement from stable outlook in a similar deal known as Project “Big Sky” four months ago. It also received a double B rating from Morningstar DBRS, the people added.
The big three credit agencies — Fitch, Moody’s and S&P — which have bigger influence on companies’ borrowing costs, have not officially issued any credit ratings for Anthropic.
Anthropic, Blackstone, KBRA, Morningstar DBRS and S&P declined to comment. Fitch and Moody’s did not respond to requests for comment.
The problem is sharing it to a group of people who mostly aren't paying for it. It's a good way to get a thread that's just people reacting to the title, which drives HN toward just being a discussion board instead of a place to find good content.
Most news articles are not worth paying for. From leaving out details to serving an agenda; a lot of news has lost it's credibility. WSJ is a good example. It had really great long articles backed by real research before it was bought by Murdock.
Anthropic is in the worst position of the AI labs. As far as investors and "the market" are concerned, the only AI that matters is the one built into your phone, car, your TV, your smart home and appliances. Anthropic has none of that share. It's all Google, Apple, and OpenAI powering Siri.
Personally, I don't think that tracks. If you are measuring "share" as share of vibes or "AI adoption" sure, but having AI in a phone, TV, smart home, etc doesn't make anyone any significant money. Hyperscaling isn't happening because there is an insatiable demand for retail AI usage. People are subscription'd out. A significant portion of people don't want AI in a lot of these things, another portion don't think they need it, and the ones that are eager to adopt it can use AI to bootstrap AI tools they use through a token router. You will have some revenue from retail AI but that isn't surprising considering I quite often have to provide tech support to people to help them cancel their subscription to a calculator app they've been paying $20 a month for.
That's very true but unfortunately Anthropic have locked in contracts for so much compute that they absolutely need to expand beyond the corporations currently paying them.
Realistically they need to 3x their revenue to pay for their compute. While that's plausible, I'm not convinced that it can all come from developers. Many many developers are already using Claude. I think they need consumer, or some other market too.
Personally I view it like this - did ant and OAI push the industry forward yup? Will they fail as businesses though? Yup. Why? Business economics - as long as cost efficient Chinese replica’s exist it’s fine. Unless the us govt artificially makes the frontier market large then I see no chance of a large enough market that sustains current valuations.
More intelligence alone != more progress. And more intelligence in the context of business != more productivity that shows up in financial performance.
> These new capabilities are powered by the next generation of Apple Foundation Models, custom-built in collaboration with Google and its Gemini models for deeply integrated Apple Intelligence experiences.
There are some similarities between Anthropic (or OpenAI) and WeWork. Obviously the large difference is software but there is a whole lot of leasing hardware going on (neither frontier lab owns any infrastructure as far as I can tell), long term capital commitments, short term monthly subscriptions, no real moat for the frontier labs (or a hip office rental space), etc.
I think 2027 will be when a lot of companies revisit their AI spend and ROI. Have there been measurable business benefits reported by the media outside of programming?
Nothing solid. All the reporting I see is that numbers are measurable but not on the level many people expected, and that these systems are proving incapable of wholesale replacing employees, which clicks with my own knowledge of some large layoffs accompanied by press releases about streamlining corporate structures using AI and the outgoing employees asking “what AI?” Because they didn’t train an offshore team or document their department responsibilities before being let go.
My suspicion (and many others as well) is that AI is used as a way to cover for large corporate restructuring in the face of money no longer being available for “free” due to interest rates.
By any sane normal sense of business and financials these AI labs look terrible on paper.
Any loan would be speculative at best, and the rating would simply reflect that.
Investing in these companies is like going wild at the casino. Sure you might make a fortune but strong odds are you’re gonna lose your shirt.
Your scenario is certainly possible, that doesn’t make both predictions equally (un)likely.
I'm indifferent either way myself. It's just shocking the amount of ignorance.
Point is, the number of tokens is a silly metric to proxy these companies' growth.
Right now the market is expecting something a lot more than "sells a lot of tokens" out of these things to justify their valuation.
Structurally there in a terrible position on what’s unfolding now with the completely collapse of model valuations. With truly “open” models gaining more and more momentum models are basically worth nothing and “token” prices are collapsing to the cost of compute. That doesn’t leave anything on the table for the Anthropic and Open AI’s of the world.
https://www.businessinsider.com/companies-hoarding-unused-ai...
I've had several people I trusted destroy our relationship this way over the years.
Amazon also did not go from ~$1B revenue to $16B in one year.
The more interesting questions aren’t about whether they have a real product (they do). It’s whether they can defend that product from competitors, such that their future revenues can justify the massive investments made.
Infact they’re going to end up in price competition unless they field an army of ‘FDE’ who go to every large firm and reorganise the operations around their models and displace labour.
Let's say that the house of cards crashes down and takes the market with it who will shutdown, survive or have no choice but to get acquired for a 90% discount.
Some will be just alive long enough for the early investors to pull out enough before the market crashes.
Now, I'm not saying that's going to happen -- but if you take analogies from the dot-com era and assume they're going to play out in the same way, you can't just cherry-pick the bad ones.
Anthropic had valuation of $550M at their first venture round, and assuming it IPOs at roughly $2T, it will take them 5 years to give this 3500x return to their initial investors.
So you're absolutely correct about the comparison.
That said, I bet whatever happens over the next 20 years goes beyond what any of us can imagine. I wouldn't be surprised if the winners of this paradigm are worth hundreds of trillions. Sounds ridiculous until you look backwards and valuation a and consider this is an exponential curve and time is compressing.
And the winners may be not be the obvious choice.
Companies are staying private longer, raising many orders of magnitude more private funding, and IPOing straight into "top 10 biggest companies in history" size.
If you IPO at $1.5T you are already equivalent to ~1.5% of World GDP.
Thus is just for scale, as comparing GDP vs a company market cap doesn't make total sense since GDP is 1 year economic activity and market caps represent discounted future cashflows of future economic activity...
Let's say Anthropic IPOs at $1.5T and grows even 1000x over 20 years, it would be worth $1.5P (petabillion?). If it had a 20x earnings multiple like google this would imply Net Income of $75T. Mag7 total Net Income for 2025 was $500B or $0.5B.
World GDP is $125T, and has grown less than 5%/year before/thru/after DotCom. So lets say in 20 years its $250B and Anthropic is capturing 30% of world GDP in earnings (not revenue, that would be even higher)!!
So the math doesn't math.
Note that I'm not saying OAI/Anthropic are destined for success - because the rate of change combined with competition with cheap Chinese models is pretty novel in the business case history. But I am saying that pessimistic dot-com-boom comparisons don't seem to be all that deep.
Almost certainly nobody if you're tracking post-IPO growth.
And not because there won't be survivors/winners when the next crash comes (there probably will be) but because of the market changes (in the wake of legislation like the JOBS act) that result in these companies having their significant growth periods prior to IPO instead of after it.
IPOs used to be a launch pad to growth, now they are just a way for private investors to finally cash out when the company is already close to peak valuation.
B) nobody is IPOing at $400 million like Amazon did except SPAC share dilution scams, that you have to be willing to pick up at $30 million a year later
C) private secondary markets solve that, for some and are pretty great
D) tokenized synthetic and SPV backed private secondary markets in crypto ecosystems like Hyperliquid give you that exposure too, so now everyone can replicate the 90s
Exactly You can't wait to IPO until you're already one of the 10 biggest companies ever AND also grow 2500x post-IPO.
Retail is now exit liquidity for Big VC.
They are so going to get disrupted. Chinese open weights models will have no such limitations, and there's no way we'll let Anthropic outlaw or ban them. (And even if they did, they can't police the whole world.)
There is no moat. Anthropic should be playing nice, not trying to create a god while holding engineers under their thumb. We will route around it.
If the people can't access god, then we are living under a dictatorship with aims to enslave us.
Wait, what?
9 shares left
please comment if you have used it to ensure other people know if it could be read
and its limited - only click if you are interested
enjoy!
This line is certainly eyebrow-raising to the educated layman.
Apparently it means that anthropic is leasing a Google data center whose constituent servers draw 1.5 GW of power running representative workloads.
Blackstone told investors Anthropic may not receive an investment-grade rating immediately after going public, a reversal from its previous guidance that would complicate the AI lab’s ability to finance its massive spending.
The private capital giant told investors in Anthropic’s latest $63bn chip financing deal that the start-up is expected to receive a “high” junk rating from major credit rating agencies after its initial public offering, according to people familiar with the matter.
Blackstone is acting as an anchor investor on the deal, known as “Project North Star”, and is working with banks that stumped up financing on selling the debt on to other investors.
Anthropic filed to go public on Monday, setting up what could be the largest listing of all time next month. The AI lab’s prospectus sketched out its “bold but sane” plans to spend more than $800bn on computing infrastructure between now and 2045.
An investment-grade credit rating is central to those ambitions, enabling Anthropic to borrow at lower rates to finance its AI infrastructure projects. The group has cash and equivalents of more than $112bn, and investors anticipate it could raise about $100bn more in the IPO. Sign reading "Blackstone" outside the Blackstone headquarters in New York, with pedestrians and city lights reflected in the glass. Blackstone’s funds have invested in $9bn of the junior debt at a lucrative yield of more than 10% © Angus Mordant/Bloomberg
While Blackstone had told its investment partners in recent months that it was expecting an investment-grade rating for Anthropic before year-end, it has recently signalled that a rating in the double B range or above is more likely given the guidance it has received from major credit agencies, the people said.
Such a designation would limit the pool of capital that Anthropic could tap because many insurance and pension funds are restricted from taking large positions in junk-rated borrowers. As a result, the company might need to continue to rely on its suppliers with high credit ratings to support its debt-raising efforts.
US tech stocks slid to session lows on Friday following the FT’s report on Anthropic’s rating, with the Nasdaq 100 down 3.7 per cent in afternoon trading. Markets were sharply lower prior to the report after earnings from Amazon and Intel worsened fears about the sustainability of the AI boom.
“It’s all about access to credit, it really matters . . . if [Anthropic] isn’t investment grade, the cost of credit goes higher, that’s not good for anyone,” said a US tech-focused portfolio manager.
“It’s a bloodbath out there,” they added, referring to the sell-off in stocks.
Wall Street banks earlier this week closed the North Star deal, which provides the financing for Anthropic to lease 1.5 gigawatts of Google’s semiconductors. More than $42bn of the senior loans is guaranteed by Broadcom, which co-develops the chips and has an investment-grade rating, while $18bn of the junior debt is backed by the AI start-up’s lease payments.
Institutional investors covet senior debt because it takes priority over junior loans in the case of a default. Broadcom’s high A-tier credit rating was an important factor in allowing Anthropic to secure the financing.
Blackstone’s funds invested in $9bn of the junior debt at a lucrative yield of more than 10 per cent, the FT previously reported. Bankers for Anthropic and rival OpenAI have also lobbied the largest rating agencies to grant the AI labs investment-grade ratings after their IPOs.
Project North Star’s $18bn junior debt, which exposes lenders more acutely to Anthropic’s credit risk, has been assigned a double B plus rating with positive outlook from Kroll Bond Rating Agency, a slight improvement from stable outlook in a similar deal known as Project “Big Sky” four months ago. It also received a double B rating from Morningstar DBRS, the people added.
The big three credit agencies — Fitch, Moody’s and S&P — which have bigger influence on companies’ borrowing costs, have not officially issued any credit ratings for Anthropic.
Anthropic, Blackstone, KBRA, Morningstar DBRS and S&P declined to comment. Fitch and Moody’s did not respond to requests for comment.
2. Never going to visit this site again and I am not going to make an account for it
I am however, okay with turning off the ad blocking if they’re running reasonable ads (not every other paragraph).
I'd also add: from paid online news, I also expect a moderated forum/comment section, with a human to escalate to if automatic/AI moderation fails.
No, they're not. Maybe you are?
> A significant portion of people don't want AI in a lot of these things
Not true. People love AI. Specifically Android and iPhone AI. I doubt they even know or care about Anthropic or OpenAI.
> the ones that are eager to adopt it can use AI to bootstrap AI tools they use through a token router
Absolutely microscopic share of the overall market for "AI" users. We are hobbyists.
Realistically they need to 3x their revenue to pay for their compute. While that's plausible, I'm not convinced that it can all come from developers. Many many developers are already using Claude. I think they need consumer, or some other market too.
Personally I view it like this - did ant and OAI push the industry forward yup? Will they fail as businesses though? Yup. Why? Business economics - as long as cost efficient Chinese replica’s exist it’s fine. Unless the us govt artificially makes the frontier market large then I see no chance of a large enough market that sustains current valuations.
More intelligence alone != more progress. And more intelligence in the context of business != more productivity that shows up in financial performance.
Life is more nuanced.
https://www.apple.com/newsroom/2026/09/siri-ai-a-profoundly-...
> These new capabilities are powered by the next generation of Apple Foundation Models, custom-built in collaboration with Google and its Gemini models for deeply integrated Apple Intelligence experiences.
I think 2027 will be when a lot of companies revisit their AI spend and ROI. Have there been measurable business benefits reported by the media outside of programming?
My suspicion (and many others as well) is that AI is used as a way to cover for large corporate restructuring in the face of money no longer being available for “free” due to interest rates.