Hacker News new | past | comments | ask | show | jobs | submit
etempleton | on: I'm not convinced the AI bubble exists
I don’t think the question is so much of AI is a future market, it is has the capital been allocated appropriately. And no one knows. The challenge Anthropic has is they have a narrow lead on the use case that makes a lot of money today, but new models come out every month and one tiny slip or wrong decision and they are toast. There is also a reliance on the idea that two things continue to happen:

1. Revenue growth increases 2. There are more highly profitable uses cases like code.

Neither are guaranteed.

I also think the narrative that these companies are profitable on compute is erroneous. You can’t ignore the other costs and no they don’t magically go away. Anthropic can’t stop training new models now or in the foreseeable future. Gemini 4 Carbon is about to come out and is apparently competitive. Google has other revenue sources. They are in the ball game. They can wait for Anthropic to run out of money.

OrangeDelonge | parent | next
The amount of profit they make on compute is also not particularly attractive (at least right now). It ‘s only slightly more than 2x for Anthropic, far off from many big cloud services which sell compute at something closer to 20x.
loading story #50427243
simianwords | parent
Even if Anthropic and OpenAI go to zero, the bubble popping still won't hurt many people like it did in other recessions.

Actually there are two different things going on here

1. model layer companies: OpenAI, Anthropic

2. hyperscalers, data centres, hardware layer

When people say the bubble will pop, they usually mean the second one.

> I also think the narrative that these companies are profitable on compute is erroneous.

I don't think you read the Anthropic filing. It is substantially profitable if you exclude the one type of debt which was actually equity. It so happened that Amazon lent some money to Anthropic but it was tied to the valuation of Anthropic, which became a "problem" because Anthropic's valuation grew 10x. You wouldn't call this a loss in any other circumstance.

otherme123 | root | parent | next
> I don't think you read the Anthropic filing. It is substantially profitable if you exclude the one type of debt which was actually equity.

Anthropic filling shows negative EBITDA, how is that profitable? Revenue < (computing + personal + selling expenses). That is not a business, that is a money burning furnace.

That before even taking into account the huge amount of money they promised to datacenters (i.e. "build that for us, and we would rent it for 5 years", non cancellable).

| root | parent | next
{"deleted":true,"id":50426192,"parent":50422280,"time":1794234777,"type":"comment"}
simianwords | root | parent
Sorry I meant in Q2 it is profitable excluding loan converted deductibles. There’s close to no chance that q3 and h2 is not profitable as well, unless you disagree and want to make that bet?
otherme123 | root | parent
It heavily depends on the definition of "profitable". I bet you that "net earnings after everything distributable to shareholders" (i.e. EPS) would be negative for the foreseable future.

But this is a bet we can settle right now: https://www.sec.gov/Archives/edgar/data/2130357/000162828026... , the ammended S-1 with Q3 data (that for some reason they omited from the S-1 that made big news), page 23:

  (units in Kilo-millions)

  Revenue in first 2026 9-months  33.2
  Compute and infra expenses      18.8
  Personel                         4.8
  Sales                            5.5
  Administrative expenses          5.3
  Operating loss                   1.2 (they are still losing money before ITDA)
But lets compare this with S-1 non ammended (https://www.sec.gov/Archives/edgar/data/2130357/000162828026...)

  Revenue in first 2026 6-months  16.3
  Compute and infra expenses       8.9
  Personel                         3.1
  Sales                            3.2
  Administrative expenses          1.7
  Operating loss                   0.7
Hmm, seems that doubling their revenue also doubles their expenses, causing double the operating loss.

First 9 months minus first half:

  Revenue in Q3                   16.9
  Compute and infra expenses       9.9
  Personel                         1.7
  Sales                            2.3
  Administrative expenses          3.6
  Operating loss                  ~0.6 (Remember, this is EBITDA)
You are lucky you didn't bet actual money.
etempleton | root | parent
Did you read the amended filings with Q3? Because they are not profitable in Q3 either. And their debt due is about to increase substantially. This is all before they inevitably have to issue billions of dollars in bonds with insane yields. 450 billion in commits due over the next 5 years or so.