Comment by aryonoco
13 hours ago
People used to say this about Amazon all the time. Remember how Amazon basically didn’t turn any real profits for 2 decades? The joke was that Amazon was a charitable organisation being funded by Wall Street for the benefit of human kind.
That didn’t last. People in the know knew that once you have a billion users and insane revenue and market power and have basically bought or driven out of business most of your competitors (Diapers.com, Jet.com, etc) you can eventually slow down your physical expansion, tighten the screws on your suppliers, increase efficiencies, and start printing money.
The VCs who are funding these companies are hoping that they have found the next Amazon. Many will probably go out of business, but some might join the ranks of trillion dollar companies.
So every company that doesn't turn any profits is actually Amazon in disguise?
If you’ve got nearly a billion users, and are multiplying your revenue on an annual basis, then yes. You’re effectively showing that you’re in hyper growth trajectory.
Hyper growth is expensive because it’s usually capital intensive. The trick is, once that growth phase is over, can you then start milking your customers while keeping a lid on costs? Not everyone can, but Amazon did, and most investors think OpenAI and Anthropic can as well.
Amazon had paper losses and great cashflow. OpenAI has actual, real losses and terrible cashflow.
this gets brought up a lot, and the reality is that the scale of Amazon's losses is completely dwarfed by what's going on now