Comment by tsunamifury

I think it’s pretty clear from the cherry picked numbers at Anthropic.

Demand is the issue. Demand only spikes with a sota model release then in drops back down to unprofitable levels when factoring in training a new model and build out.

So your stuck in an unprofitable cycle of losing revenue when your not releasing sotas but losing profit when you are.

This goes back to googles original memo “there is no moat”.

Where in you can’t stop training sotas because you’ll lose customers to the next inference model above you instantly.

Google has seemingly defeated this by finding models cheap and good enough for their existing platforms resulting in a moat of distribution. Something OpenAI and Anthropic seems to lack.