Comment by pbmonster
7 hours ago
> Is that not self evident by the insane revenue from frontier labs?
No...? Of course not?
Because revenue is only one side of the equation. Did you ever look at total cumulative OPEX and CAPEX, and how long it will take them to even just break even at current growth?
Anthropic is growing 10x revenue every year.
They're likely over $80b ARR by now. They'll be at $800b ARR next year at the same rate. Let's say their growth gets cut down to 3x instead of 10x - that's still $240b ARR by this time next year.
When you are growing so fast, you don't need to make a net profit. You just need to make sure your unit economics are good - which it seems like they are given reports that their gross margins are at 60-70%.
> They're likely over $80b ARR by now. They'll be at $800b ARR next year at the same rate.
And they will be 800 trilion ARR in a couple of years, following that same rate! 8 quadrillion by 2029!
> When you are growing so fast, you don't need to make a net profit. You just need to make sure your unit economics are good - which it seems like they are given reports that their gross margins are at 60-70%.
If their margins were anywhere near this good, they wouldn't need to raise so much money so often.
If you create a machine that turns 1 dollar into 3 dollars, you don't dillute your ownership of the machine, you use your fabulous profits to expand your machine's capabilities.
Why not? They are reinvesting into growth. There isn't a clear winner yet and Anthropic wants to make sure it is one of them. Taking a profit now while letting OpenAI take your marketshare and train better models is not very smart.
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