[daft_pink]

I think when these companies IPO later this year, we’re going to see the reality of the PNL numbers and whether they are sustainable etc as all the financials will become public.

Rumor mill suggests that Anthropic might be profitable (but at what magnitude), OpenAI is not profitable, Google is mostly vertically integrated and has a low cost structure as they are have pre-existing data center buildouts, their own silicon and experience that suggests they will be able to operate at a very low cost, but they still have to justify their spend.

I think having to report numbers publically on a quarterly basis will bring the whole thing into reality.

[Zigurd]

> later this year

One can hope that reality intrudes before the bubble gets even more dangerously inflated, but how many years has Tesla had a ridiculous P/E ratio. Even after growth stagnated and market leadership was lost in Asia and Europe. Number still goes up.

[BeetleB]

I hate Musk, and I'm not going to justify Tesla's crazy stock valuation, but consider the following:

Outside of China, Tesla's probably the only company that can compete on battery prices. I don't know how accurate it was, but a news report was comparing the cost the manufacturer's pay to build the battery. Chinese companies were around $6000. Tesla was at $7000. Everyone else was around $12-15K. This is why a number of companies have exited the EV market - they just can't compete. This is why Ford lost money on every EV, despite the high MSRP. This is why the Ford CEO says "We're f####d" when he saw Chinese cars.

The only hope regular Japanese/American/European auto manufacturers have is if EVs do not gain substantial market share.

If the future is EVs, Tesla is the only non-Chinese company that has a chance.

It's depressing.

[notahacker]

This assumes it is literally impossible for anyone else to reduce their battery costs to a level which makes them competitive with Tesla in an environment when battery prices are falling rapidly and the tech continues to evolve (and Tesla's EVs are not even unusually cheap or experimental in their battery supply chains)

That sounds less likely than the bull case Tesla is trying to make on "we're a robotics company now" or "one day all cars will be autonomous taxis controlled by us".

[FabHK]

Exactly. Looking at competition from China, but also the West, I don't see Tesla having a moat in EVs, in robots, or even in batteries in the medium term (compare e.g. [1]).

How can they produce the extraordinary growth and excess profits that would justify their valuation?

Fundamentals will reassert themselves sooner or later, but as we see it can take a long time.

[1] https://electrek.co/2026/05/07/tesla-4680-battery-cell-perfo...

[jmye]

> Fundamentals will reassert themselves sooner or later

I don't believe that's true, anymore.

TSLA is a pure meme stock. No one is investing in it because they believe in the numerous, actionable lies Musk tells. No one is investing because they think the P/E makes sense. They're doing it because they think the memes are fun, or because they think the people who think the memes are fun are bag-holders, or because they think the memes are fun AND Musk is actually still smart and adding value, etc.

It's the clearest, most obvious case for "the markets are not the economy".

[FabHK]

That's a thought-provoking and somewhat resigned point.

My response is this: Over time (say 20 years later) you will have gotten certain dividends, and the firm will be in a new position in terms of price and earnings. If I'm right, and the firm will not have been able to produce large profits and pay them out, then the people who bought today at today's valuation and P/E ratio will have massively overpaid for the dividends they will have gotten, and the only way they could have made capital gains to make up for it is if either the P/E ratio has increased even more, or earnings have really shot up at the end of those 20 years.

Either way, it's not sustainable. Unless, of course, people are willing to push up the P/E ratio up and up without limit. And I submit that's not going to happen indefinitely.

TL;DR: 20 years later you can see what share holders got for the price they paid 20 years ago (namely 20 yrs of dividends, plus they still have the share). If you thought the shares were cheap and you were right, you got a lot for what you paid. If the shares were overpriced, that'll have come out by then.

(I agree though that it seems to take longer than it used to take for the fundamentals to reassert themselves.)

[fragmede]

Only if you're terminally online and believe everyone else must be as well. If you don't know what a meme stock is and think the humanoid robot is going to sell like hotcakes, TSLA seems like a great investment.

[BeetleB]

Their per-car profit margin is the moat. Which non-Chinese company can compete?

[QGQBGdeZREunxLe]

Tesla's moat is bipartisan support for 100%+ tariffs on Chinese EVs in the United States.

How long that lasts remains to be seen. American consumers living close to either border are going to be able to see Chinese EVs themselves.

[BeetleB]

Tesla has vertical integration with their batteries, which is why they can make them cheaply.

> This assumes it is literally impossible for anyone else to reduce their battery costs to a level which makes them competitive with Tesla in an environment when battery prices are falling rapidly and the tech continues to evolve

No - it just means they can't do it as fast as the Chinese. The Chinese have been investing in battery technology for 10-15 years longer than most auto manufacturers. (And their labor is cheaper).

[Zigurd]

It's not depressing because it's not true. Tesla isn't investing in battery technology. Tesla also isn't developing new models at the same rate as VW, BMW, Mercedes, Hyundai Kia, etc.

[BeetleB]

> Tesla also isn't developing new models at the same rate as VW, BMW, Mercedes, Hyundai Kia, etc.

BMW and Mercedes are not in the same class. They can afford to get away by charging a premium.

VW: I'd love to know how much it costs them to make/buy a battery, and their profit margins on EVs. Ditto Hyundai and Kia.

(Edit: See https://carbuzz.com/ev-profit-margins/ for VW).

Look at all the companies scaling back on EVs or exiting them altogether (e.g. Honda). It's not that Honda can't make EVs. It's that they can't compete on profit with Tesla + Chinese EVs. It's likely why Hyundai is dropping the Kona and the Ioniq 6.

Nissan dropped the Ariya, I believe. The Bolt is also out. The general shift is for more luxury EVs (BMW/Mercedes), and not EVs for the average Joe.

See also https://www.bain.com/insights/electric-vehicles-profit-puzzl...

[dalyons]

Giving up on EVs is crazy though, it seals their fate and guarantees the death of the company in exchange for a few more years of profit. The EV takeover will not stop, as of roughly this year they’re going to be cheaper than equivalent ice cars, it’s going to accelerate quickly. It’s suicide in slow motion

[4ndrewl]

This. It doesn't really look like Tesla is doing anything rn but selling old cars. They don't appear to be the future any more.

[SirMaster]

It doesn't look like they are developing self-driving?

What other company is developing self-driving at a level of sophistication as Tesla that you can actually buy in a consumer vehicle?

[Spooky23]

The companies that have real boards would never take the risk.

Once Elon’s air cover is blown, the government is going the dissect Tesla. Once someone gets the injunction to stop deletion of crash data and allow for inspection, they are cooked.

[goalieca]

I don't think self-driving is remotely close to working at any scale. I also don't think it's the killer-app. Right now, cheap electrics and moreso cheap hybrids are the killer.

[4ndrewl]

I suppose, if you live in a jurisdiction/insurance regime where it's usable.

But people like buying new cars, new models, new designs. Not just features - those are just options.

[thenthenthen]

Its interesting, practically all car makers seem to have factories in China, why cant they compete?

[hnthrow0287345]

If anything though, this shows that at least tech driven hype bubbles can stay around way longer than we think if we are looking at it from a product POV.

This just means short sellers might have a hard time sinking a hype-category stock with reasoned research because the irrationality keeps it afloat.

[ChartMaster22]

"Markets can remain irrational longer than you can remain solvent." - John Maynard Keynes

[devin]

Sometimes I wonder if Keynes would under the current conditions see fit to differentiate "merely irrational" from "absolutely insane".

[daxfohl]

Agreed, and assuming local open AI models start catching up, which they seem to be doing, the foundation models' hold on society gets a lot slipperier. If there's a "what to do about all this" from an engineer's standpoint, pushing the needle toward local models, whether in research, agents, or just using them, understanding how they work, and advocating for them when it makes sense (which is more often than they get credit for) is probably the best ROI.

[dangus]

While I agree with you on open models getting better, I have been starting to see how the value, the reason you pay for Claude, isn’t in the models.

For example, I just hooked Claude desktop up to my outlook to build a report for my timesheet then I used the chrome extension to fill it out automatically with that data. It could read Jira tickets if that’s where the information was.

A local model can’t do that for me because I have to get the rest of the integration software somewhere.

I also think this is why OpenAI is the worst positioned of the group of AI giants. Anthropic is trying to make a productivity operating system, while ChatGPT is basically just a website until recently.

[dwedge]

Aside from filling in the timesheet (which I assume could be done from a CSV import - I appreciate this is another step), I have almost the same setup as you, without AI. I have bugwarrior pulling JIRA tickets and github PRs into taskwarrior. I have an integration from task warrior into time warrior and from there another hook back into JIRA to get titles and summarise.

All of that is done with two API keys and no AI. A local agent could easily put it together for you.

Now sure, I had to put this together and I lose the AI summary you have plus the auto filling, but what I'm trying to say is that I have 80% of this without any AI.

I also have a script parsing git from my emails and a little tui that translates them into git diff and a key binding to pull the PR but I find it a little cumbersome and don't really use it, and trying to parse todo from maildir is also a little useless so I accept that AI would be better there.

I also accept that your example is just one prompt of a dozen and I have to plan the solution for every one of your prompts, but I also don't find prompting to be terribly useful for occasions where I don't think the solution through- because it probably means I don't know what I want or don't really need it.

What I do find it really useful for is digging through Kubernetes and asking how two services are connected. Claude is better than local for that but there's nothing inherently non-local about that usage.

[dangus]

In my case, I don’t have access to the APIs nor does my company’s ancient trash timesheet app have any ability to bulk upload.

That’s what’s so great about these programs, really, is that you can just do the thing out of plain language.

[daxfohl]

So far there's no moat though. A lot of that kind of stuff is available open source too if you look for it (and was available before claude desktop). And for anything that doesn't exist, with coding agents now you can write one up in an afternoon.

It's kind of paradoxical in a way. By making writing software cheap, they've made it much harder to create a moat for themselves that involves only software. It'll be interesting to see how they respond.

[dangus]

If there’s an open source alternative to Claude desktop that has a similar amount of extensibility with connectors specifically I’d be very interested to know about it. I’m very much not deep into this space.

[c0rruptbytes]

https://github.com/OpenCoworkAI/open-cowork

https://www.eigent.ai/

[checker]

https://opencode.ai/

[abalashov]

I get local models to drive applications through MCP (e.g. Google Chrome DevTools) via OpenCode all the time, and do things that would otherwise be very token-intensive and result in pointless meatspin. This is totally possible, and will become more so.

The real reason you pay for Claude _is_ in the models. The locally runnable models are impressive for what they are, but simply will not accomplish the task as effectively, incisively or quickly enough. I have to be willing to let OpenCode run in agentic loop on "download my bank statements"[1] for an hour and just walk away, and take a low-ish but profoundly nonzero chance that it will just fail. Claude can do it in 5 minutes, if I let it (I have), and it will not fail. Both are driving the browser via MCP and performing the same task.

[1] One of those difficult-to-use, modal-rich JavaScript-laden banking portals that seems quite intentionally designed to prevent this sort of downloading, or I wouldn't bother letting an agent loose on it in the first place.

[fragmede]

Unfortunately for Claude, you can have it set up local models to do that for you and then you don't need to renew it. Codex's computer use is better than Claude's, imo. I'm a Mac, no idea about windows but I know there's no Linux version. Haven't had enough time with Opus 4.8 but GPT 5.5 > Opus 4.6 and 4.7.

[dwedge]

I have mixed feelings here. I find codex much better than Claude for generating PoCs and debugging small scripts, and for finding online documentation. I find Claude a bit better for debugging distributed systems and summarising data

[ako]

OpenAI may be better positioned than you think with Codex being able to drive your applications without an API according to Nate: https://www.youtube.com/watch?v=2d9ZmA-4QzU&t=1093s

[c0rruptbytes]

this is also possible with local models, MCP is an open standard

if you already have claude, you can even get it to set it all up for you too

the issue with local models is just the compute required, it's hard to compete with 100t/s cloud models

[brightball]

Google really needs to work on the user experience. The Google Cloud based approach to Gemini for coding is so clunky.

[FuriouslyAdrift]

I thought most people used Antigravity to code with Gemini?

https://antigravity.google/

[logicchains]

The current Gemini experience is "The Google Experience"; brilliant engineering underneath, disdain for customers on top.

[cute_boi]

Things went down why they hired anti gravity team. This thing is very had and isn't even opensourced.

[kingleopold]

they really dont care I think. Only Sergey brin cared for a while and he is silent again

[BrenBarn]

> I think having to report numbers publically on a quarterly basis will bring the whole thing into reality.

That is a good reason that all companies (over a certain size, say in terms of gross expenditures) should have to report such numbers. There's no reason that huge companies should be able to distort the economy while not having to report anything just because they're not publicly traded.

[Unit327]

Anthropic have only scraped together a month of profitability by cooking the books. They have an extreme compute discount from spacex that only applies for the first couple of months of the deal. By pushing the costs down the road they can make themselves look good before IPO. Even they have admitted publicly though that they don't expect profitability to last.

[fragmede]

> having to report numbers publically on a quarterly basis

They won't need to do that if the new rules come into effect.

[doctorpangloss]

you: insurmountable cost structure for LLM providers

also you: only three companies make LLMs people pay for

sounds like a 15 minute phone call to form a cartel is all that is between them and profitability? less money has been made on more complex schemes.

[33MHz-i486]

i think the narrative of “all white collar employment replacement in the near future” can sustain their public market valuation for many years, regardless of how profitable they are in the medium term.