Comment by Argonaut998
5 hours ago
Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time.
Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end.
We are only just now getting a taste of the “true cost” of these tokens. Then there is a lack of compute bottlenecking everything. Even now I’m looking at the 7.5x rate of tokens for Opus 4.7
Open models are promising and cost a fraction of what they proprietary models cost which the big two are vulnerable to when companies start to feel the cost of tokens.
Will data centres be built fast enough and powered sufficiently to lower the cost of compute thus tokens?
Is it just a giant Hail Mary to get to AGI ASAP before the economy collapses?
Above all else, I simply feel the models have plateaued. I am noticing productivity loss for tasks I deem as “complex”
> Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end.
I think a LOT of companies really never needed to be on the public market, and its a darn shame that so many go on the stock market, we have this obnoxious culture where you have to fire tons of people if you have a bad quarter just to show you're stopping the bleeding. Companies literally fire and hire x number of people every quarter to keep things going, its ridiculous and unhealthy. Private companies rarely work like this, I'm sure there's exceptions.
Every company I've worked at started off private, and those were their golden years, until some economic hurdle happened so they sold it off to a bigger fish who is on the stock market, who bought them to be more attractive to investors or what have you.
I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years. I think this would make more sense. Maybe it doesn't fix the VC peeps want their money back nonsense, but if you could do it even for early stage companies, maybe it could help somewhat.
There is nothing that stops you from buying stock and holding it forever, Buffett does this.
There are very stable companies in the stock market, like Cocacola. But they are not glamurous and don't give headlines.
And there are enormous fish in the private market, e.g. Cargill.
Stock markets are great if you have a company that needs money to expand quickly, and don't mind to share ownership. Stay away from IPO-jackpot stuff, and it shouldn't be that awful.
So you're asking for some type of equity that's private?
Seriously though, I have seen some very large companies like Tibco and Dell go private for an extended period of time as a means of avoiding shareholder nonsense during restructuring.
> I wish there were an alternative to the stock market where you invest for the long haul, and you cannot take your money out in x number of years.
That exists already! People often complain as well when a company ends its golden years because of some economic hurdle and ends up being acquired by a bigger fish who is _not_ on the stock market.
It's less about the company leaving the stock market and more about "Private Equity" often being a legalized embezzlement scam designed to suck the company dry and then dump its withered husk in bankruptcy court.
When that happens the current shareholders usually make out very well.
> we have this obnoxious culture where you choose to fire tons of people if you have a bad quarter just to show you're stopping the bleeding
Fixed your error.
They choose to do so because they've lost money in a bad quarter, which might not be the case on the next quarter, its ridiculous. I would rather invest in a market where my investment is long term based, and you aren't just firing people to make numbers work. To these people its all about make the numbers work for investors, they don't care about anything else because of the way that market works. You can offramp your investment on a whim, which is ridiculous and volatile at times. Personally I would prefer more companies go private. Some companies probably wouldn't exist without the public market, like some social media companies, and maybe that's okay if they did not...
Let companies fail, but also lets make investing smarter.
From the limited perspective of software development, today’s models are well-worth their per-token cost.
This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.
> From the limited perspective of software development, today’s models are well-worth their per-token cost.
At the current price or real price? Anthropic said a $200 subscription can cost them $5000 so the real price could be anywhere from 10-30x the current price.
No, that is probably one of the worst cases they probably saw. Most likely the subscription inference cost is much lower than you expect. If you look at costs for similar open models they are much lower than what you get by buying from anthropic, so that is the real cost basis I expect.
It's likely Amazon is making a fucking killing though.
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At the full current retail API price.
Business buyers are paying API prices, not subscription
Disclosure: Work at Microsoft on AI
And receiving investment from their vendor in exchange? When this is done in established companies it is typically called a kickback and directed toward one person, but in this case the whole thing is so incestuous the kickback goes straight to the top.
Is it crazy to imagine Anthropic can leverage short term cash flow now to build the models and products that will let them resell $100B in AWS infra with nice margins tomorrow?
If Amazon believes that story they’d be crazy not to invest.
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But that per-token cost is a total joke. All these companies are fighting to build market share in some future dominated by one or two AI ecosystems. It is musical chairs until someone creates the one ring to rule them all. So they are charging token amounts just to claim revenue as they burn through investor dollars.
In short: per-token charges currently cover maybe 1% of the total costs in this field. To pay ongoing costs, and pay back investors, everyone will need to pay 100x or 1000x the current rates, likely for decades.
If that's true, it's very unsustainable.
Gemma-4 26B-A4B + M5 MacBook Pro + OpenCode isn't Claude Code _yet_, but it's good enough that if I were forced to use it I would be fine.
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I'm not sure this information is grounded, but I remember to have read somewhere the inference is indeed profitable. My personal experience is similar. Running 2x3090s draw 500-600W and you can locally run amazing models with a similar setup.
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> In short: per-token charges currently cover maybe 1% of the total costs in this field
There are plenty of seemingly informed people saying the exact opposite, so that's a lot of confidence you're talking with. I have a hard time believing it when we know what open weights models cost to run. And sure, there's training costs, but again many say inference costs are already above training costs.
From the perspective of a deal like this, “total costs in the field” matter less than incremental cost per token served.
The unit economics for today’s frontier models should be great, and this suggests Anthropic believes they’ll get better.
In a decade the cost of compute will be a tiny fraction of what it costs now. Specialized hardware will exist that will be cheap and efficient.
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People had literally the same arguments about Amazon, a company Matt Yglesias once described as "a charity run on behalf of the American consumer by the finance industry".
I am not sure how grounded this is in reality. Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs.
Has there been a ton of hype? Absolutely but the value proposition is getting more and more tangible.
Did some of the AI companies over commit in spending? I am sure and they will probably hurt in the long term. I thought Anthropic had been scaling towards profitability at a quick timeline though.
> Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs.
Most of this is still structured around "find use cases for AI" rather than one (or more) clear use cases being the reason for adopting AI.
There's no "Lotus 1-2-3" of AI. Even the software development applications are still somewhat controversial and highly pushed based on "Sam Altman promised me 10x developers".
With the recent pushes into tools like Cowork/Claude Code for business users that’s not the reality I am seeing. We still have a long way to go to figure out the full value potential but it’s already at a point where there is a lot of low hanging fruit being able to be captured. Of course an anecdote of what I am seeing with my own company and companies I can peek into. YMMV but it’s a pretty clear path that these are going to be increasingly adopted.
I don’t necessarily disagree but to provide some counter points:
1. Model providers are currently profitable when just counting the cost to serve tokens for inference[1]. They lose money training the next generation of models.
2. Open models don’t work nearly as well. Given that tokens are still relatively cheap, and hallucinations are expensive, I’ve not seen a huge up tick in open model usage for coding agents yet.
3. On the AI economy front, I really have no idea, but AI companies (meta, msft) have already come down in value. It seems investors are at least a little wary of AI over valuation. Of course, the stock market is not the economy, but it’s not clear where warning signs would be. Earnings are healthy.
1: https://martinalderson.com/posts/no-it-doesnt-cost-anthropic...
2: https://www.economist.com/finance-and-economics/2026/04/20/a...
If there is bubble to be popped, I'm guessing there's still a few years before it happens. Just based on the timeline of events, maybe end of 2028. Even if the big players find profitability, all of the other companies latching onto the AI-first identity will probably pop by then.
Anthropic revenue is ~$30B/year.
Revenue is a meaningless measure though; what's the spend:income ratio? Excluding capital investments, what's the cost of operations?
At a very minimum, to repay the +$100b in investment within a reasonable timeframe, what's the minimum figure they have to bank post-tax each month?
Since when revenue is meaningless? It’s an indication of market acceptance. Anthropic has one of the most expensive plan, they didn’t undersell other models. Open weight models would otherwise dominate if cost is the only factor.
Also, investment is not money in the bank. They can’t withdraw $100b tomorrow. That means they don’t have to repay until after they got the investment, which is a commitment over several years.
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> We are only just now getting a taste of the “true cost” of these tokens
Why do you believe that? Better metric would be price per token of open models served by third party. Last I was tracking the price for similar level model was decreasing by more than 10x year on year, and they are 10-100x cheaper than top properietery models.
Sure you can say that you can't compare them but for sure you can compare the top properietery model of 6 months back to current open models and the gap in time seems to be constant.
>Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time.
It's only a matter of time until they crash the market. Nobody is making any money, even if the White House is dumping billions in their tools.
> Will data centres be built fast enough and powered sufficiently to lower the cost of compute thus tokens?
...building datacenters will not lower the cost.
The cost (real, not investment hype subsidized one) will only drop with:
* more efficient models * GPU/RAM market going back to reasonable pricing.
The AI bubble pumped the second into unstustainable pricing and progress on first is going.. slowly.
Doubtful. Look at how long Uber and Tesla have lasted despite making huge losses. Hell even Magic Leap somehow still exists (I guess because they don't have running costs beyond salaries).
I think this can keep going for at least another 5 years.
Uber had only 25B invested in them before their IPO. OpenAI has 120B invested in them currently which excludes these kinds of deals (as far as I’m aware)!
> Look at how long Uber and Tesla have lasted
In a system of open-ended growth, yes, you can point to how long the system has persisted as evidence of its longevity. But in a system of plateauing growth, the system's age is an indicator of how close it may be to death. I suspect that the model that permitted the "success" of Uber and Tesla is nearing the end of its lifetime.
> Open models are promising and cost a fraction of what they proprietary models cost which the big two are vulnerable to when companies start to feel the cost of tokens.
Anthropic are scared of open weight models and need to fear-monger towards you to continue paying for their models.
That's the whole point of their 'safety' marketing narrative, account bans, and Dario being the AI scarecrow scaremongering everyone about nonsense like 'Mythos' towards the world.
'Mythos' is already here in the form of open-weight models that also found the same vulnerabilities as Anthropic did.
Genuine question here about the open-weight models finding the same vulnerabilities as mythos thing: is it just a matter of false negatives/positives? I’ve seen a few cases where people show other models (even opus) can find the same vulnerabilities given many passes. Is there some disadvantage to the extra passes that give the claimed Mythos performance extra value (assuming it finds them in less)?
The thing is, mythos found those with multiple passes, thousands of passes... So using thousands of passes or perhaps the same budgets, yes, cheaper open weight models could potentially (and have) found the same/similar vulnerabilities.
Mythos screams of marketing hype, and nothing more. Opus 4.7 isn't really a meaningful upgrade in any sense, other than being more expensive.
Once you can see what something like Qwen3.6-35B-A3B can do... with just a FRACTION of the size of the larger models, You'll understand that the future is open weight models you can run yourself.
Same goes for companies, bringing inference onsite isn't hard, I'm actively building tooling to orchestrate it.
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You're observing that:
a) effective price-per-token is rising b) there is insufficient compute to meet the demand.
And your conclusion is that the industry is circling the drain and due to collapse?
They are different observations, I think, though the phrasing confuses it:
a) cost per successful task is rising — eg claude max allocation is functionally shrinking
b) is there enough potential cost reduction in the queue to make up the gap
c) if open models converge on a more efficient but slightly-less capable point (which has effectively happened) what is the actual moat?
Yes, cost per successful task is rising - ie, we are all paying effectively more for AI.
And yet - Anthropic is still struggling to have enough capacity to serve demand - they are virtually sold out.
And yes, are almost-as-good open models, on part with the closed models from 6 months ago (at worst), that are just a single Openrouter API call away, and yet Anthropic is still selling out. So people are paying for the premium product anyway, for whatever reason - maybe the last bit of intelligence is worth it, maybe they like the harnesses/products around the models, maybe it's a brand/enterprise sales thing.
Put aside your feelings about the AI industry and imagine we are talking about thingamajigs. Prices for thingamajigs are going up. They are still selling out about as fast (or faster) than the company selling them can build factories. There are more cost-effective competitors already in the market, but thingamajigs are selling out anyway.
Would you, looking at the thingamajig industry, conclude the "jig is almost up"? That "the returns aren’t anywhere close to what investors expect" and that the impending IPO is all some desperate hail mary to save things before the collapse?