[0000000000100]

Haha thought you were referring to the upsell at the start asking to subscribe to the newsletter for $70 / year. But yes it does call out the unprecedented amount of money getting dumped into AI.

What turned me off though was this paragraph:

> This is a hysterical era perpetuated by liars, cowards, imbeciles, craven boosters and the easily-fooled. Those excited about generative AI are either the victim or the perpetrator of a con centered around a technology to ingratiate at the highest cost possible.

That's a very bold claim. Really anyone excited about generative AI dude? That's just an absurd claim, and makes it sound like he hasn't used an LLM since GPT 3.5. It's just the language is so hyperbolic and angry that it's giving me more rant vibes that really hurt the tone and damage the (many valid) claims he's trying to make.

Really tried to read through this all the way, but man I'm just not in love with this guy. I feel like the frustration is clouding his judgement. This line is another one with a fact that isn't really grounded:

> so, you know, they only need to grow by 496% by the end of 2029!

Which isn't wrong, but also Anthropic's revenue increased from $1 billion in Dec. 2024 to $47 billion May of 2026. Which of course doesn't guarantee that it will continue to grow at that scale, but it's clear that there is a strong demand for what they are creating.

Idk, not really sure what my point is here. There are just so many facts and numbers quoted in here... It's a bit exhausting to refute a piece like this, when parts are genuinely correct, and parts are maybe subconciously exaggerated due to some emotional leaking into the argument.

[degamad]

[flagged]

[naishoya]

I just woke up and THIS! ... you almost owe me a new keyboard! I love it!

This statement cleanly encapsulates the entire problem with all of the frontier models' companies' pre-IPO numbers.

They have something-something "new technology" and we don't know anything about how the market is going to settle on the ethics, the utility, the human capacity opportunity cost impacts of not training and/or mis-educating an entire cohort of intern-engineers for a few seasons to a generation, the full environmental costs of hardware and operations necessary for the training each new larger model, ... and we cant even quantify the unknown-unknowns - the risks we cannot forsee.

To predict market revenues for the next few years based on the curves, that they self report without external disclosure of the underlying numbers, is just like expecting your 2 yr old to continue growing at the same pace in the future and in the past - laughable. Good thing it was just water not coffee and it didnt quite come "out my nose" :- ) Thank you kind stranger!

[degamad]

Glad to be of service. I can't take credit for the idea, it was stolen from a meme I saw long ago, but it was one which sticks with you.

[zuzululu]

well if he takes after you i 'd say he tops out at 100m

[mhitza]

> Anthropic's revenue increased from $1 billion in Dec. 2024 to $47 billion May of 2026.

That's the kind of claim that requires and asterix, and things like this are what feeds into the AI propaganda machine.

That is an anualized revenue, which are projected numbers and not "real numbers".

[josh-sematic]

Divide both by 12 then and you have monthly revenues. The ratio between them remains the same and remains rather astonishing.

[fc417fc802]

Dividing by 12 you still have the same problem. They're projected numbers as opposed to real ones as well as being grossly skewed by any short term fluctuations.

[JacobAsmuth]

Divide both by 12 and you do not get the projected numbers. You get monthly revenue, a real measured number. It is the number being reported * 12 when they state a new ARR.

E.g. When Anthropic stated $1B ARR (an extrapolated value) what they were actually reporting is $(1/12)B Monthly revenue. If it helps their current monthly revenue is 47 times that, for a grand total of $(47/12)B per month in revenue.

[fc417fc802]

Yes it is the current monthly revenue which is a projected number as far as the other 11 months go. That's fine if the overall economy has low volatility, your sector is well established and predictable, and your company isn't undergoing any significant changes. Absolutely none of that applies to the frontier AI labs.

[Tanjreeve]

So basically you can't find fault with the numbers but you find the tone annoying?

[LogicFailsMe]

Well, he dismisses any value whatsoever to GenAI. That's immediate bozo bit criteria to me. And, well, if Anthropic revenue doesn't grow 5x between now and the end of the decade, I'll be pretty surprised. But, sure, if it doesn't, then someone will keep them around anyway. AMD almost died in the 2010s as one example, but they kept getting propped up and now they're back in the game swinging. There are people who can see alpha beyond the next 10Q. Ed Zitron isn't that sort.

[mlyle]

> Well, he dismisses any value whatsoever to GenAI.

I didn’t read it that way. I see a lot of value in it.

I just don’t see us justifying the amount of infrastructure being built or current valuations. Or in the unlikely event that we do, the societal upheaval is going to take away the ability to monetize it meaningfully.

OpenAI and Anthropic may make it through. But that is different from saying valuations are justified or that all this infrastructure will pay off.

[LogicFailsMe]

"Those excited about generative AI are either the victim or the perpetrator of a con centered around a technology to ingratiate at the highest cost possible."

How else would you read the above statement? He's just preaching to his own choir IMO.

My take: like any gold rush, a lot of dumb ideas will get backed and they will all fail. And then we'll keep the ones that worked. SSND. Good luck picking the winners a priori.

[mlyle]

I read it in context as being about the market prospects of genai.

The problem is, when there is so much overinvestment, everything gets wrecked. In the aftermath of the dotcom boom there was at least a bedrock of fiber and still useful equipment to build upon amid the rubble. This time we are going so much further; also many of the durable assets are misplaced bets and the depreciating ones will depreciate more steeply.

[LogicFailsMe]

Someone should do the analysis of a decade and a half of Nvidia datacenter GPUs from Fermi to Kepler to Maxwell to Pascal to Volta to (Turing) to Ampere to Hopper to Blackwell and generate some hard depreciation numbers. Fiddling around a bit, 16-20% annual depreciation (so 5-6 years total and then any further revenue is bonus goods) it would appear, but that's a fiddle number.

But confounding this, K80s and V100s are still offered by cloud providers 13 and 9 years after their releases and academia still loves their GTX 1080 Pascals in their desktops. At companies, the beancounters take a computation and find the best architecture !/$ for that calculation. It does not need to be brand new shiny. It's Nvidia's job to make that case, not them. But anyway, the real data is right there. And those old GPUs demonstrate the dark fiber is already in place (and it's not so dark or they'd pull their racks).

AI is the special case. New GPU generations are the only way to access HW implementations of last year's research on precision modes and matrix math. If that slows down, that would be the first real bellwether of a slowdown. It hasn't happened yet. I'm a little surprised myself, but I also think coding agents are the vanguard of general design agents and that's going to hit a lot of industries at once. So as long as the next generation of GPU halves the price of tokens and doubles throughput (or better), the demand for tokens will continue to rise IMO.

What I don't think is that AI can come for anyone's job successfully no matter what the C-suite sorts insist.

In summary, if you're a bear, you can point to the depreciation cycle and scream the sky is falling. And if you're a bull you can point to GPUs staying in production for a very long time despite the depreciation. Guess we have to wait for 2030.

[scubbo]

SSND?

[tempfile]

same shit new day, I'm guessing

[vatsachak]

Alright, let me explain what's happening this Q

Chinese providers realized that LLMs have peaked and have started trying to reduce the price per token. Deepseek pro v4 can easily add tests to my complicated code and costs cents for a million tokens.

I can ask Claude or ChatGPT architecture questions and then use Deepseek for the rest.

How are these businesses going to pay to price of energy and GPU depreciation again?

[LogicFailsMe]

I love nonsense like this. If using a larger model to plan a chain of thought task for a smaller model works, what makes you think Anthropic can't do the same thing and offer it as one of their effort level settings? It reminds me of all those fallen AI ASIC startups insisting they can crush Nvidia until they found out the hard way that the rules of the game are dynamic.

The real challenge IMO is whether enterprise will want to run the models on-site for 100% security and privacy, but even then, what stops Anthropic from offering such an option on-prem or in the cloud?

China's available AI coding agent subscription slots are apparently gone by 9:30 every morning: https://hellochinatech.com/p/china-ai-coding-boom-economics-...

[vatsachak]

What stops Anthropic of American energy and infrastructure costs. And those AI ASIC companies just got bought by OpenAI and you guessed it... NVIDIA

[LogicFailsMe]

Tell that to Esperanto, Graphcore, Untether, Mythic, Wave Computing, Cornami, Copia Automation, Kneron, Lightmatter, the list goes on...

But you run with this Anthropic will die because it will run out of electrons narrative. At least it's creative.

[loandbehold]

He implies $400 billion in revenue by the end of 2029 is unrealistic when in fact it's very doable if you look at the trajectory of this technology since ChatGPT 4.0 launch. Google and Meta bring in around $500 billion in ad revenue between two of them annually. ChatGPT will easily bring 100s of billions in ad revenue if fully monetized given 1. it has billion weekly active users 2. ChatGPT conversation provides even better context for ad targeting vs search or social media. Enterprise AI revenue is going through the roof already, and with computer use companies will literally be able to fire large percentage of white collar workers and replace them with AI agent without updating their software infra.

[Jedd]

Does that '100s of billions' come from a big bucket somewhere called 'spare cash', or does it correlate to a commensurate reduction in the 'around $500 billion in ad revenue' that Google and Meta are extracting?

Do your assumptions - " if you look at the trajectory " - factor in a slowing economy, a slowing growth in quality improvements in the tech, and/or the asymptote of market saturation for punters happy to stump up more than $50 a month?

[sailfast]

What about a few hundred billion in salary and benefits reductions due to mass layoffs?

Not saying this would be good (qualitatively) or even good business in any sense, but we’ve already seen companies willing to sacrifice headcount to cover CAPEX for these models.

[monodeldiablo]

A few hundred billion in salary and benefits reductions equates to millions of layoffs. At minimum, we'd be looking at something about the same magnitude as the 2008 financial crisis. That scale of workforce reduction would have profound implications for the broader economy.

In a consumption-driven economy, businesses need consumers. Any gains from these layoffs would be short term at best.

[vatsachak]

And if a pig had wings it could fly

[lelanthran]

> Anthropic's revenue increased from $1 billion in Dec. 2024 to $47 billion May of 2026.

Where are those numbers from?

[casey2]

I mean it almost certainly won't increase unless a major company takes out substantial debt, in which case we just kick the can and have conversations about bigger numbers. I don't quite think you understand, where will these hundreds of billions come from? By 2029 we will be well into a hardware glut and people will run their own models. Anthropic doesn't have the data flywheel to compete with OpenAI or Google. They went all in on special purpose AI and hit a brick wall and had a "do as much evil as possible" strategy which didn't pay off. Hopefully they fail before they get the entire industry regulated.

[SlinkyOnStairs]

> Haha thought you were referring to the upsell at the start asking to subscribe to the newsletter for $70 / year.

People like you would be why I put "(titled)" in the reply.

> That's a very bold claim. Really anyone excited about generative AI dude? That's just an absurd claim, and makes it sound like he hasn't used an LLM since GPT 3.5. It's just the language is so hyperbolic and angry that it's giving me more rant vibes that really hurt the tone and damage the (many valid) claims he's trying to make.

The premise is that AI is significantly more expensive than current subscription & token fees. Within that framing, yes basically all AI users are getting conned. Tricked into redesigning their workflow around an unaffordable technology, in the hopes there will be too much sunk cost and they'll just eat a thousands-a-month fee.

> Which isn't wrong, but also Anthropic's revenue increased from $1 billion in Dec. 2024 to $47 billion May of 2026. Which of course doesn't guarantee that it will continue to grow at that scale, but it's clear that there is a strong demand for what they are creating.

"Doesn't guarantee it will continue to grow" is an understatement.

Let's take a generous assumption of the average subscription; $1000/month/seat. This will be quite a bit higher than pretty much everything but hardcore software dev, we'll re-do the math with $200 in a moment. Let's also grab Ed's $60B figure for both Anthropic/OpenAI, as it's more generous.

That's 30 million subscribers for Anthropic, 30 million for OpenAI, 60 million total.

They need to 5x. So 240 million extra subscriptions.

... Are there 240 million people left on the planet who can afford $1000/month?? (Either directly, or their employer) This kind of scaling is already hitting the limits of people on the planet. That sounds ridiculous for "240 million people" against 8 billion, but remember that $1000/month is a lot of money and a lot of jobs just do not benefit from AI. 2/3rds of employment in the US is stuff that happens in the physical world. Claude won't restock shelves, manufacture goods, construct buildings, cook food, or wipe geriatric asses.

Go again with $200/month. While this monthly fee is much more palatable, the sub-count inflates to 300 million subs needing to grow to 1.5 billion. They'd need to sell a sub to everyone in Europe and North America.

(And while there's loads of people in Africa and Asia, most of those are low income. You're not getting expensive AI subscriptions out of them or their employers either. China's obviously not gonna buy US AI, India has a GDP-per-capita of $250/month.)

[D_Alex]

>They'd need to sell a sub to everyone in Europe and North America.

Yep. Every man, woman and child, and even then provided we include Russia, Mexico, Cuba, Haiti etc, and, out of desperation to get to 1.5 billion, Turkey, which is in Europe a little.