Comment by JumpCrisscross
13 hours ago
> genuinely curious why you say this is different from the dot-com bubble?
A lot more revenue. Dot coms were going public pre revenue. And Anthropic is profitable. Both it and SpaceX wouldn’t be dependent on further stock sales to stay alive—that lets them weather a downturn.
As I understand the situation, Anthropic is revenue-positive but not profitable. As usual, Ed Zitron covers this well [0].
As with the dot-com bubble, there is a lot of voodoo accountancy (and flat-out lies) about the actual situation here.
As I understand it, the basic problem is that the big three can't charge enough per token to cover costs because they're in competition with each other (and one of those is Google that can afford to buy market share using its other operating revenues), and the OSS/cheap Chinese models.
And this situation is unlikely to get better in the short term because building cheaper per-token capacity is very expensive and time-consuming.
[0] https://www.wheresyoured.at/anthropics-profitability-swindle...
> this situation is unlikely to get better in the short term because building cheaper per-token capacity is very expensive and time-consuming
They don’t need to fix it in the short term.
Look, this could be total nonsense. But what won’t happen is Anthropic or SpaceX disappearing inside a year. That was true in the 90s because the only cash flow going into those companies came from investors.
I notice you left out OpenAI from that ;)
Agree, some of these are valid businesses. But they are also massively overvalued on that underlying valid business, because of investor enthusiasm. When the bubble pops they are going to have real problems because of that overvaluation. Hopefully they survive, as a lot of the dotcom businesses did.
I think the real bloodbath will be the second-tier businesses that are mostly reselling cheap tokens to a market niche with custom prompts, and also massively overvalued as "AI businesses". And that kinda mirrors what happened in the dotcom bust - all the overvalued "webscale" businesses that hadn't really worked out a solid model yet went to the wall immediately
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