Comment by jonas21
17 hours ago
The other way of looking at this is that all the customers paying API rates are giving Anthropic way more than the cost of serving their traffic. They reported an 85% gross margin in their S-1, so this clearly seems to be the case.
Okay but even with a 85% margin the true cost for 30 minutes of usage would be $2.25. At that cost $34 should last only 7.5 hours. I would imagine the average user uses more than that?
I think you would guess wrong.
The median user is using AI as a search engine, meme creator, and/or chatbot… at best.
The additional cost created by the subset of programmers using subscriptions rather than tokens/api can easily be categorized as a marketing expense.
At best? Do you have any data you're basing that claim on, or are you just speculating based off of you projecting? AI maximalists would have you believe that people are using these things as therapists and having conversations with it that are more intimate than any lovers'. AI minimalists would have you believe that no one is using these thing except at gunpoint, and even then. Unless you have some reason for us to believe you that isn't just "trust me bro", your portrayl of the median user is as suspect as any other.
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API is definitely holding things up. But they excluded the training from those profit calculations. There's a ton of wordplay indulged online about how that's capex etc etc. But without the training they don't have the thing to run inference on so it's very fitting with the pattern of being evasive with finances.
You’re confusing two figures. Before their S-1 filing, they reported being “profitable” to their investors when excluding training and stock based comp.
In the S-1 filing Q3 was profitable even with training included, if you exclude stock based compensation.
Q2 was profitable on all operating costs (incl. hardware, employees, training, inference). They were not profitable on non operating costs though. That’s partially interest, but mostly, when their valuation goes up, they’ll have to issue more stock (absolute value) to early investors after IPO. (so, them going up in value is a loss, as the shares they’ll owe will be worth more)
Their profitability will likely crator as they start building their own data centres after the IPO, so that’s the best results they’ll have in a while.
You see how the history of small print to everything they release to the media creates the accusations of running on misleading press releases?