Research Firm Calls Anthropic's IPO 'Unprecedented Test of Investor Gullibity'
cnbc.com
cnbc.com
So whatever your stance on Anthropic this particular analysis is safe to ignore.
I like to think you can enjoy the ride wave as you are propped above the heads of an hysterical crowd, as they rush to the abyss...Just find some solid tree branch you can latch on, when they realize where the road ends.
This is essentially just what people say when current reality is different from what they want it to be. Sort of an unfalsifiable escape hatch response to “well observable reality contradicts your claim”
In the long term, in theory, prices should be tied to value, most most of the time the stock market plays more like a casino.
…which, in a normal sane world, would affect the stock price?
2 trillion is a lot. I’m skeptical, for the same reasons listed in the report.
Its has nothing to do with Dario, and mostly to do with Chinese open weight models.
I feel like that statement is one of mans' biggest foot-guns in the modern world.
that single sentence has driven the biggest hucksters the world has known to commit the biggest frauds ever perpetrated against man for decades.
In fact track record is perhaps one of the most important things of all when deciding wherever to even engage with the argument in the first.
Ironic given this article is from CNBC, employer of Cramer, host of "Mad Money", who has been so inconsistently wrong that his picks have literally sparked an ETF. Just search using your engine of choice "Inverse Cramer ETF".
I work in finance. Past performance is not a guarantee of future returns, but is a damn good indicator, which is why everyone always wants to see your past performance anyways.
Unless it's about stock picking, when the winners in one year of doing good stock picking are no better in the next than any other random stock picker.
Of course both had too short a lifetime to draw a conclusion due to lack of interest and this was pre-AI so maintaining the positions was difficult. But it’s important to remember that Jim Cramer fails to beat the market, not that he’s an inverse oracle.
All the mayor AI players have to rent/buy a lot of computing power to serve their customers. We're talking costs of 2-5x (or 10x? does anyone actually know?) their revenue. The question is, will they ever be able to pay their cost of revenue and operating expenses? Many people doubt. And we know that they do all sorts of funny book keeping shenanigans like SPVs and delayed deprecation.
What comes on top is, LLMs have no economy of scale. More customers scale linear with higher costs. Will people or companies be willing to pay 5x what they're paying now? Will future frontier models become more cost efficient or less? We simply don't know yet. At this point, it's a gamble.
Wut? I'm pretty sure SpaceX spends a lot of money shooting rockets into space, and Cloudflare has pretty high infrastructure costs given that a very large portion of all Internet traffic goes through their networks.
SpaceX is an entirely unique thing, I don't really know what to think of it. I don't see a viable business model there, but I might be wrong. Maybe there is trillions to make in space. Their targets are long shots, but meanwhile they are bleeding money on all their ventures and they ride on the AI wave. The IPO was fairly recent and it might still just implode one day.
You're discussing something entirely different, which is fine, but you're not refuting anything that the parent poster said.
All they were saying is that they're terrible at predicting risk. Examples were given. It doesn't matter why they're bad at predicting risk, they simply are.
Every time I see Anthropic and other AI companies getting ready to go public, I cannot stop thinking about the entire Enron debacle and all of their "unique" book keeping shenanigans that has far reaching impact, even to this day.
People keep telling me, "Nah this is totally different man, you can't compare the two!" But is it really??
Math ain't looking pretty. Just like it did not look pretty with WeWork. Might have worked, but still not great business to be in.
Being hyperscaler really does look very high capital and questionable margin bussiness at moment. With lot of competition.
In general, the stock market is in a somewhat weird place because most people in the US who have some money just don't have anything else to do with it. It's not productive to keep it in savings or treasuries, we don't invest in friends' businesses because we don't have friends, real estate is too expensive, we don't collect art or antiques because that's for old people... so YOLO in the stock market it is.
So yeah, I don't think it's wrong to criticize the Anthropic IPO as nearly impossible to justify by anything other than vague hopes and dreams. But that doesn't mean it won't make you money.
Also known as a broken clock being right two times a day.
The fallacy is assuming ahead of time that they are actually right this time.
If you start assuming they’re right and also admit that their logic doesn’t support that conclusion, there isn’t even any argument left. You’re just implying that you believe one thing is true and anyone who agrees with you, regardless of the reason, is also correct.
I don’t find that persuasive in any way.
Friends businesses don't need our money, because banks are generous with giving out loans and friends prefer to keep ownership intact while being in debt instead of diluting it.
For the IPO, I assume they're going to try to get everyone to focus on inference - which is profitable in isolation. But I don't know how they'll distract the market from the other half of the equation.
The vc’s have to be allowed to cash out - so that money remains a strategic weapon for US venture funds over any other nation re. Funding startups in future - esp capital intensive.
The valuation is a joke but they will be allowed to go on and cash out - just like the investors of spacex.
Like dot-com, there are many long-term winners, but cash hungry frontier labs are not among them.
Prediction:
OpenAI, Anthropic, Oracle, and SpaceX[1] go down and assets be sold or companies acquired for a fraction of their valuation. The same goes for most neoclouds. Profitable "old" tech companies like MS, Google, Meta, and Amazon are fine and scoop up the valuable parts for pennies.
Nvidia will be in Cisco's position (Cisco was the world's most valuable company in the dot-com era). Both are good companies that are not going anywhere, but stock prices get decimated when markets collapse (Nvidia liabilities are not high enough to take company down, they are mostly tied to there not being a bubble and data centers are getting built)
[1] Everyone already knows that, according to SpaceX, > 80% of SpaceX's valuation is in AI, not in space stuff, right?
It's fabless, right? So they haven't even built out wasted manufacturing capacity.
As long as the GPUs they have sold are really sitting in a warehouse in Taiwan or somewhere in the USA, they are making properly concrete money.
The fact that nobody else is making real money, that will eventually come back to bite them, but Nvidia will just see its business shrink; it will have to scale back if the bubble bursts, but it will get out with much of that money intact.
For September:
> In IT, semiconductor exports rose 262.8 percent to $60.30 billion, exceeding $60.0 billion for the first time as memory demand continued to grow, with export volumes continuing to expand and contract prices maintaining their upward trend.
https://english.motir.go.kr/eng/article/EATCLdfa319ada/2743/...
Not too shabby for a rainy day fund.
According to SEC filings Nvidia has $100 Billion in total commitments. They are mostly purchase obligations, advance supply agreements, and multi-billion-dollar prepayments for fab capacity (wafers, HBM, packaging, substrates and interconnects).
A general rule in the AI bubble appears to be this: Nvidia aren't waiting to get paid for the things they make. Rather, they are being paid very up front for things that cannot be installed.
> Unlike the dot-com era, this is a bubble that everyone saw coming.
As far as I recall, the dot-com bubble was widely seen as such prior to it bursting. E.g. Greenspan and Buffet were both quite vocal about the irrationality of the values being assigned to companies.
The bet is that cost per intelligence will keep going down and demand for intelligence will grow at the same time, if this bet holds, a user could get the same or more done with a cheaper model (running-cost wise) while paying the same subscription and the lab gets improved margins.
Open source is a challenge but their current moat is the fact that they're ahead, and as long as they stay ahead they'll be able to charge a premium.
"AI use cases" is a moving target! If you try to define "use cases" by "what AIs today can be used to do", you miss things AIs would do in the future. The more capable and price-performant AIs get, the more there are places where AI has a role.
This is a big part of what the frontier buys you.
The other big part is that going from a local AI to a frontier model often makes the difference between "this use case works 60% of the time, good tech demo" and "this use case works 99% of the time, good business decision". The difference between "clunky and needs human in the loop" and "just works" is worth paying the API price.
Models, however, are completely interchangeable on demand. That’s why companies are building these realtime internal marketplaces to route tokens to different models. Anthropic may win the occasional “bleeding edge” use case but the money is in the day to day use cases that get routed to the cheap-but-works options. There’s zero cost to having all the forklift sizes at your disposal and only using the size needed when it’s truly needed.
Anthropic is trying to sell the biggest baddest forklift in a world where companies can swap out cheaper ones easily and on demand. Hence why Anthropic doesn’t appear to have a viable business model in its current form.
And crane, despite being bigger, more powerful and more awesome (they lift skyscrapers and do things nothing else can do), the Forklift is actually more useful to more people.
I think the argument carries solid weight. Making bigger and better things doesn't necessarily lead to bigger and better businesses.
This is the problem.
While the frontier labs will always have a market for AI that can do things the other models can't, if the sliver of work that can be done only by the frontier models is narrow enough, then what they spend to train those frontier models may not let them capture all that much extra revenue.
I absolutely think there will be a market for frontier models pushing further and further.
But it's not yet a given whether or not being ahead on capabilities is going to buy them all that much more higher earnings relative to lower tier providers.
If it stays the case that going from local AI to a frontier model makes the difference between 60% and 99%, then they probably will, but there's nothing to suggest local or open model, or second-tier closed models won't keep moving ahead as well, and eat away at the use cases where only a frontier model will do.
Do you think that we are anywhere near that point?
We've already seeing things - like what's happening with AI reverse engineering now. I'm a reverse engineer - and I know that the reason why RE was used as "last resort option" was that expert reverse engineers are rare, expensive, and work slow.
But now that a lot of RE workloads can be tackled by AI instead of a human? The demand for reverse engineering is at a never before seen high. AI made reverse engineering much more viable - and thus, a lot more reverse engineering is happening now.
There are myriads of fields like this - things that go overlooked not because no one wants them, but because the economics of human expertise make them nonviable in most cases. As AI gets better, it can begin to enter those fields.
Except you, of course, need to push the frontier to do it.
Much of humanity doesn’t think at all btw - that’s why they’ll never pay for these products and Google search had to be free.
Furthermore two things could be true a) market for frontier is large b) Anthropic still continues to generate net loss’s
What’s your goal here
Interesting. Are you an Anthropic investor?
And that, in turn, makes AI even more valuable if it can produce thinking on demand.
That's like saying if 99% of birds don't have huge colorful tails that makes peacocks very valuable. In each case it may or may not be true but you are just correlating. (i.e. It's possible that intelligence just isn't as valuable as 'intelligent' people think it is)
Researchers specifically were never highly paid. And positions were competitive - there were way more people willing and able to do those positions then positions themselves. Same goes for art btw.
I could be wrong, of course.
No, I don't. But for any given task there is a ceiling above which for that task there is no value in additional intelligence. E.g. it takes very little intelligence (none, in fact) to sort a list. More intelligence does not result in a more sorted list.
And so for a huge proportion of what we do there is a ceiling of value that can be extracted by selling AI tools to do any given task.
Combine that with there being at any given time a ceiling of available capital to be apportioned to buy intelligence to carry out the remaining tasks, and the floor of tasks that non-frontier models can do well enough rising, and there will at any given time be a finite amount of capital that will be accessible to frontier models.
It is by no means given that that slice of capital will grow rapidly enough for frontier providers to be able to create an attractive financial return. That depends on frontier labs being able to continue to deliver sufficiently more value than cheaper models at any given time that enough people won't simply wait.
I'm extremely bullish on AI in terms of its ability to transform society over time, but that does not automatically translate into assuming that the current frontier labs are a safe investment bet.
If "sort a list" becomes a trivial task, everything that was bottlenecked on "sort a list" is unbottlenecked, and other parts of the process become bottlenecks instead. Thus, the demand for non-sorting tasks grows. The saturation of low end feeds the value into the high end.
Sometimes it is. But that is also irrelevant. Replace "sort a list" with any given goal and the argument remains the same.
> The saturation of low end feeds the value into the high end.
But that process is not immediate. There's a reason I was careful to include "at any given time" in my comment.
For the purpose of whether or not a frontier lab is a good investment, it doesn't necessarily help them if there is an ever rising demand for intelligence if their market is eaten from below just as fast by cheaper models from competitors catching up.
It could be they manage to out-pace their competitors sufficiently that they will produce returns high enough to justify their valuations.
But irrespective of whether the demand for more and more intelligence continues to rise perpetually if 2nd tier labs hollows out the bottom of their market fast enough, it could equally be that most of the market ends up being low-margin, highly-competitive inference that won't justify their valuations.
Given the size of their valuations, even if they turn out to be tremendously profitable businesses, it's still not a given they'll give a good return on investment for investors getting in now.
I'm not saying they won't. I'm saying we can't easily judge that based on just assuming growth at the high end will continue without understanding what their moat is likely to look like.
Your assumption here is that the other parts of the process are intelligence. In the real world they usually are not e.g. raw materials, politics, zoning, manual labor, clinical trials, traffic, energy ... And usually those things are such huge bottlenecks that Amdahl's Law renders the speed of delivery of the intelligence part irrelavant.
There is no business model for competing companies to build forklifts that can lift an infinite amount.
That is not to say attempting to do so would not find new use cases for such powerful forklifts. The problem is the cost of building ever increasingly powerful forklifts while the TAM for that power shrinks.
You don't even have to bring in the enormous difference between forklift rusting theta vs gpu theta.
That it would be profitable if only there were no competition is not a really strong starting point for an IPO, though, is it?
(It is, however, the winner-takes-all world view Anthropic still seems to operate with)
So, yes, it's high risk - you're basically betting on who will be in the strongest position when one or more of the competitors are forced to slow spending and the rest are able to ease off on theirs as well as a consequence.
If you think either that Anthropic is in a strong enough position to come out on top or that we'll end up with a detente like with the big cloud providers where they big providers feel they have a strong enough position to beat off upstarts and collectively basically stop competing other than on the margins because they all know they'll earn more by protecting their margins than by internal competition, then the IPO might be worth putting money on.
I think the latter scenario is slightly lower risk, but still risky given how small the moat appears to be vs. the Chinese labs (I say this as I just had Kimi re-design a website in 10 minutes by just giving it the URL to the current one and tell it to replicate everything; they might not be as smart as the frontier models yet, but they're capable enough that they're taking over an increasing proportion of my token budget)
It's a sort of weird chicken game in that there's a meta-chicken game going on too — they are both, sort of separately, betting that the outcome of their chicken game will be too devastating for the US economy for it to be allowed to happen.
(I say "sort of separately". But the one guy used to work for the other guy. You know how people who split up from partners spend the next few years trying to shake their ex-partner's framing of the world? They know each other's thinking; they are aligned where this meta-chicken game is concerned)
Especially if it is finely calibrated enough that they get to continue at a slower pace, but end up with enough expensive red tape to slow down upstart competition more because of high compliance costs.
If they can't beat OpenAI etc., the second best is to near-freeze market shares in place at a lower rate of investment - hence my comparison to cloud providers where none of the big providers makes too large reductions in prices etc. because they all know they'll all lose on a price war.
So they make a profit on each burger they sell you, but however they keep limiting how many they are willing to sell you?
Being ahead isn't much of a moat in a game where playing catch-up is significantly easier than being ahead. Also, how much ahead of Chinese labs are they at best? A year? Two? That's a moat for ants!
But profitable enough to justify the ludicrous valuation?
I think there will be a few forces driving prices lower if anything.
Everyone is currently looking at their spend on AI and the revenue growth for their own companies that this spend is not yielding.
I also think that if there is any competition, they won’t be able to lock in prices where they stand. Especially with open source models.
the problem is that they are not ahead. they are ahead on producing one-shot demos, which are useless party tricks, but when it comes to shipping real products these large models are just a big expensive waste of time and what you need is deterministic systems that integrate small efficient purpose built models in the places where they are actually the best solution for the problem.
the anthropic game plan was to wrap the entire software industry up in a magic box called "AI" and then rule the world but these people are delusional and their house of cards is rapidly collapsing. the technology is real, but they didn't invent it and they don't own it. it is kind of amazing to think of a $2T company with zero IP ... they didn't invent a single thing that they are selling, and for the most part they are implementing it worse, and serving it less efficiently than at least a half-dozen other competitors.
Hard to run local modals when sam altman continues to drive up the cost of compute.
These companies believe they're a year from AGI, and that's how they'll be profitable.
What I don't get is that if Company A is a year from AGI (I don't think that's true, but then again, I don't think anyone even has a good definition of AGI), then surely Companies B–ZZ are only a few years (at most!) from AGI as well. There is no moat. Or if there is a moat, the moat is hardware scarcity – but that's systemically outside of the control of these companies.
They have not actually demonstrated this, really.
In intrinsic valuation, the value of the operating assets is determined by ebit(1-t) - reinvestment.
Gross profit doesn’t mean a whole lot if a) your operating income is negative b) your reinvestment needs are mega. You have to make some interesting assumptions Re. Anthropic to get a 2T valuation.
I almost have to hold my nose reading finance posts on here.
(I think 2 trillion dollars is an absurd valuation for a product with such hot competition and low switching cost, but if you make the case that Anthropic is losing money based on the 2025 numbers from that Reuters report you're being farcical.)
UPDATE: I found the actual New Horizons report here - it does acknowledge the 2026 numbers, unlike the linked CNBC story about that report: https://www.newconstructs.com/anthropic-is-the-most-ridiculo...
"The company grew revenue twelvefold in 2025 to ~$4.6 billion. According to the New York Times, Anthropic is on pace to generate $100 billion in annualized revenue by the end of 2026."
It does lean into those 2025 figures when talking about Anthropic's losses though, which is weird when Anthropic have supposedly claimed two profitable quarters in 2026.
UPDATE 2: The CNBC article actually does cover this:
"Anthropic claimed at the end of July that its annualized revenue run rate was up sevenfold year-over-year to $65 billion."
I withdraw my comment. I shouldn't have let my pet peeve (that Reuters article being misreported all over the place) get ahead of me here.
Anthropic claimed to be profitable if you dont count some of their largest expenses (like model training). Not the sort of profitable where revenue actually exceeds total expenses
"Anthropic still hasn’t made its prospectus public, so New Constructs hasn’t seen the actual filing. However, the firm cited figures that have been reported, including from the New York Times, which reported in September that the company was on pace to generate $100 billion in annualized revenue by the end of 2026."
Anthropic's annualized revenue run rate reached $65 billion at the end of July 2026, up from just over $5 billion in August 2025 (Anthropic, CNBC) Anthropic made nearly $4.6 billion in revenue in 2025, 12x more than in 2024 (IPO prospectus, via Reuters, September 2026) Anthropic's preliminary Q2 2026 revenue was more than $11.5 billion, ahead of OpenAI's $6.7 billion (Bloomberg and The Wall Street Journal, August 2026)
https://explodingtopics.com/blog/anthropic-revenue
So, the Q2 revenue was $11.5 billion. The claimed $65 billions are "annualized revenue run rate". Please show me where that term is defined reliably. It's a BS marketing term to obfuscate real revenue after the tokenmaxxing hype has ended.
That according to "a person familiar with the matter" aka an anonymous source. From https://www.reuters.com/commentary/breakingviews/anthropic-g...
They could have cleared it up, could they not? But silence is more expedient when attempting the most fraudulent IPO of all times.
If you carry that forward even one year, and I’m not saying you certainly can, they’re outselling NVIDIA.
I get it, there are risks, scalability issues, low cost competitors, etc. $2 trillion is a big number, but it’s tiny compared to all human payroll.
I’m not buying it either but I dont think anyone who does failed an IQ test.
I think it's a little early to make that statement. Could be. But at this point I think things like printing press, agriculture, writing ... they're all many times more significant.
Now, obviously all these things built on each other, so comparing them like this is a little silly, but in my view, inventing AI is essentially inventing an inventor of fantastical things on par (and beyond) the greatest inventions of humanity, including the ability to self-improve.
To be clear, I don’t think today’s LLMs are there yet, and I take no position on whether they’re a dead end, but in my view ASI has no fundamental barriers that cannot be overcome in time.
Depends on your perspective, but that's definitely true if you're selfish and have been paying people for intellectual labor. Lots of layoffs to fantasize about (even though that represents vast amounts of pain and destruction for many people).
Is it true growth, or circular dealing plus hype? I have little doubt the IPO is nothing but a wealth transfer from retail investors who'll be left holding an empty bag.
As far as I know the circular deal fears are more around the chip purchasing agreements, because there is a speculative component to building out datacenters for training which may not produce models that are worth the training cost, but the revenue from inference is real and it has truly grown a lot over the past two years.
> ...it's pretty clear that it's not just hype; they really are a useful technology that can massively increase software engineering productivity
That's a beefy MBP! I imagine it was quite hot by the end of that flight if you were running Qwen the whole time
Is a hypothetical, but is one that's an even higher risk factor for investors.
https://ir.nasdaq.com/news-releases/news-release-details/nas...
The benefits of replacing all human payroll will go to AI companies as a whole. AI companies as a whole != Anthropic.
As the article points out, the greatest threat to closed models like Anthropic's comes from cheap open source models. Not from the possibility that AI won't be successful at replacing payroll.
Cancer. Burkitt Lymphoma takes a couple of days to double in size.
It’s important to understand that infinite growth inside a finite system is impossible. At some point growth has to stop, either by eliminating the growing organism or it killing the host.
Induced demand and limitless cheap human-quality labor can possibly grow the pie very fast, though even then, you start running into the earth’s finite resources eventually. But it is possible that they are worth much more than $2 trillion long before that.
But that is why I said you can’t just safely assume 15x multiples to continue.
> “I can’t let that bother me,” he said at the time. “I have to stay true to what I think is right.”
Monkey remains true to darts, dartboard.
None of this sounds credible.
Anthropic raises money from IPO -> How long will that sustain them given the immense cash burn? Forget about gross profit - that's the number they want you to focus on and can be played with. Keep the focus on the cashflows -> if a firm runs out of money its over, who cares what your revenues and gross margins are. We are not talking Amazon level loss's which were paltry AND they were able to raise more than enough to keep going for awhile.
Management of firms who pay rent to LLM models need to reign in costs -> they will use a bundle of chinese +american models (this is already happening look at the data) -> affecting revenues, earnings and cash flows of frontier labs. Given the losses in absolute terms, any stunting of the growth rate would be catastrophic for the story re. valuation.
The frontier model story rests on one giant assumption: lay-offs must happen en masse at some point. It's not happening and in my view won't happen - there simply isn't enough trust. Moreover, do you think firms are going to trust these model providers, given its in their interest to steal IP? lol
Not rocket science mate.
First, a lot of usage can switch to open models (like is happening, I agree), and yet frontier model usage can still grow (like is happening). As long as the market for frontier level intelligence keeps growing, the cost of frontier intelligence is marginally profitable to the user, and the open weight models don’t catch up, I don’t see any reason for frontier level usage to fall. Indeed, we haven’t seen any of that so far, despite the rise in open weight usage. My own product has started using open weight models, but my usage of frontier models also continues to grow, because they keep unlocking new capabilities. Maybe that’ll end, but I’m skeptical. I think the problem space that can benefit from the best intelligence money can buy is unbounded.
Plus the labs can still offer cheap non-frontier models to compete with the open weight models (like Luna and Haiku), and they have a massive advantage in terms of available compute.
Secondly, I don’t think that the big labs need mass layoffs to justify their valuation. That’s perhaps one path, but in my view a more likely one is that we get greater increases in productivity and economic growth, and they capture a large share of that. If global GDP grows 2% faster than it otherwise would over the next decade, that’s an extra $175 trillion in economic value created over the next decade. If it grows 5% above baseline growth, it’s half a quadrillion. GDP in 2036 would be more than $100T higher per year than if GDP grows at historical rates. AI companies don’t have to capture very much of that to justify a $2T valuation.
Now, will any of that happen? Who knows, it’s definitely unrealistic and unprecedented, but then again, so is much of what I see happening in the world today. Time will tell.
Most "news" is just a dramatized press release these days. The conditioning of the public to viewing media as authority creates a mental trap where you're told something is important/credible, despite having zero hallmarks of credibility. And we perpetuate this because it's familiar, not correct or accurate.
This is exactly why humanity continues to stumble, despite centuries of evidence as to what doesn't work. We just can't accept that most of what we tell ourselves is reality is just a for-profit (or for-influence) product that masquerades as knowledge or important information.
So, we go from an existential threat to basically unprofitable business. I can only see Amodei and Altman just as the next Holmes.
I have just not read or listened to much of anything that the numbers work besides some science fiction fantasy on Dwarkesh podcast.
The gpu theta + the frontier model theta + token deflation creates this rolling window that I just don't see how it works given even the most bullish assumptions.
Maybe if the rolling window was expanding a rational argument could be made for the valuation. No one can say with a straight face the rolling window is expanding.
It is like competing biotech firms without patents working on the same drug but with these time decay parameters too.
https://www.youtube.com/watch?v=8NfxN85znqQ
5+ Straight Years of #1-Ranked Stock Picking
Broken business model
Revenue already flatlining
Wildly unprofitable
"Existential risks"
Required immunity
This IPO is exit liquidity
$518 billion in liabilities
Circular funding creates contagion risk
Staggering revenue concentration
No sustainable competitive advantages
This is a legitimate question. The Chinese companies are releasing their open weights models for free. Here in America, Meta is doing that as well.
Anthropic IPO prospectus shows AI vision, surging costs
New findings reveal AI bubble worries are justified: https://www.youtube.com/shorts/xCzCyPoI-eA
I'm expecting a similar story to play out with Anthropic: The stock price will come down significantly after the IPO, resulting in lots of headlines about the AI bubble bursting. But in the long term it'll climb up again and investors who stick around will do very well.
With Anthropic I think a lot of people haven't really realized the trend line of cost of "AI" (both in literal $ terms, and compute costs for local operation) or what open weight systems will do to the market in the "long run", where long run in this case means the next year or two. I don't think any LLM company is going to come out a winner in the longrun, because the price for LLM output is going to approach $0 with no chance for a moat whatsoever.
I am afraid that you're suffering from Flavor-Aid poisoning here. We need a reality check about "multiplanetary colonization".
I've been following human spaceflight since I was born. I've actually participated in robotic spaceflight. And I'm here to say that it is robots who are destined to be a multiplanetary species. The robots have already successfully escaped our solar system and extensively explored the Moon, Mars, and elsewhere.
Many unscientific people believe that it's harder to colonize the Moon or Mars because they are farther than Africa or Rio de Janeiro is from Rome. But mere distance is not really your biggest obstacle.
I've also been following the ISS since its inception, and they have empirically disproven the feasibility of colonizing planets. If we succeed in establishing a crewed Moon base, it will be an ultra-Herculean effort, and it's on the edge of feasibility.
But Mars? Venus? Asteroids? Europa? You really think humans are going to live there?
The reasons that ISS has disproven this are manifold, but I'll point out two key points:
Their supply-chain is only about 8-48 hours, and they can stash large amounts of provisions up there. Their escape route is also only 8 hours and they're back on Earth in a jiffy. None of this is true for any body outside of Earth orbit. The Apollo missions arrived on the Moon and returned safely, by burning, jettisoning, consuming, and abandoning nearly everything they started with!!
A 15th-century expedition to Africa or Brazil means that you can fish in the ocean, breathe the air, drink rainwater along the way. An expedition to the Moon puts you in an airtight bubble with no stops, no rescue, no resupply, and most importantly, no breathing on the way, nor once you get there.
The ISS has also demonstrated the severe toll on the human physique in microgravity conditions. Watch astronauts who land or splash down. They are carted off in gurneys. They are literally unable to walk unassisted. NASA restricts returnees from driving or even jogging. The astronauts describe having to "relearn gravity" activities like brushing your teeth and showering. Any astronaut arriving on Mars would be as helpless as a toddler! Do you want to colonize Mars with toddlers? Because all the treadmills and workouts along the way won't make them fit for purpose on arrival.
So between here and Mars it's minimum six months, no escape, no rescues, no takey-backsies. We could send humans to Mars if we didn't want them to survive or return. I mean, no problem. There's no air to breathe on Mars; no water to drink; no fuel to burn; no fish to fish nor deer to hunt; no steel to build a shelter. You pack it all into the spacecraft, newbie?
But NASA and the rest of the world has amply demonstrated just how capable robots are where humans fail. Robots are going to inherit the solar system. Robots are in 2026, the de facto interplanetary species, sine qua non. My heart is warmed by these human achievements. I, for one, am happy to live and die on Earth. I think that every American should be grateful for Earth, and not permit our oligarchs to cheat and lie to us with fairytales of escaping our Earth.
That's easily fixed!
Spinning a space station for gravity is straightforward, it's just that the ISS wasn't designed for it, and NASA didn't have the budget to build a second, bigger space station with "extra engineering challenges" on top.
It's definitely practical though, it's just a matter of launching enough mass to orbit.
Like you said, Starship is going to change a lot of things, starting with space station design.
Yeah, I mean, I get that the spinning has long been a viable proposition. Perhaps if we send a spinning expedition to Mars, the astronauts won't be toddlers when they arrive on a barren, hostile, resource-free world. Yet, that is a lot of extra mass; that is non-zero extra fuel; that is a lot of extra "stuff goes wrong" risk inherent in that design.
But it's unprecedented, untried, and not currently in any pipeline, AFAIK. I believe there were a few experimental spinning crewed flights, during the original Space Race. But does Starship spin and simulate gravity? Is there any crewed spinning spacecraft extant, in production, or even being designed?
They don't need to spin their way to the Moon, so it would be unlikely that any Artemis or future crewed Moon mission spins at all. But if spinning our way to Mars will solve an otherwise intractable set of problems, I suppose we'd better get started on proving it.
So the most well intentioned person doing awful things? In my mind he's an awful person. But this also goes the other way as well. Imagine you're right, and the idea of getting humans into space is some elaborate scheme to somehow get more leverage over humanity. Awesome! Because it's highly unlikely such schemes will come to pass in any sort of remotely realistic way, but we'll be left with the means of humans actually meaningfully expanding into space.
I'd love to see as sharp increase in the number of evil people plotting to do good things to further their evil ends. All the 'good' people doing evil deeds in the name of some grand end that never happens is quite tiresome.
There are many people who believe the opposite, btw. Earth has a disease. And the disease is called man. The world would be better off without humans, etc. Say that in a pub - you’ll get nods. But say you want humanity to populate the universe, and people will think there’s something wrong with you. Says less about the speaker and more about those who listens, if you ask me…
I love going to the beach, but I wouldn't hop into a car with no wheels and blood trickling from the trunk, just because the guy wears a hat saying "I love the beach! That's where I'm driving! No detours, no tricks." and makes grunt noises at me because he never had the patience to even learn to properly mask and come up with a coherent ruse. To make that about "beach haters" is as expected as it is off the mark.
The whole point of the extended stays in LEO are precisely to simulate worse case scenarios for travel to Mars. So for instance the record for the longest time in space is held by Valeri Polyakov. [1] He spent 437 days on Mir in LEO, and then opted to immediately walk upon landing back on Earth. It was all to prove that humans would be physically capable of working on Mars (which has 1/3rd the gravity of Earth) even after absurdly long periods of time in space. In fact his first words upon return from his first (240 day) stay in space were "We can fly to Mars."
Robotics don't really work well for space exploration, because moving parts break. For instance the Curiosity/Perseverance drills are cutting edge yet have a max depth of ~2.7 inches. And traveling is even harder. On average Curiosity ended up traveling about 1 mile per year. It's all because if anything breaks, that's game over. So everything has to be done with the utmost of caution, and even then stuff constantly breaks. Curiosity's drill broke after about a dozen activations and required a team of scientists and months of full-time work to create a passable work-around when it could have viably been fixed on the ground by a human in a few moments.
This is part of the reason that we only learned in 2013 that the soil/regolith on Mars is actually extremely moist, 2-5% water by volume. A cubic foot of soil heated up gets you about 2 pints, a liter, of water. The whole plot-line in "The Martian" about having to jump through hoops to get water was correct based on the latest knowledge when the book was written in 2011. We'll probably learn more in a couple of weeks with people on Mars than we have with 60 years of probes and rovers.
I'm certain every human of sound mind is grateful for Earth. That's not a reason to not seek to expand out as far and as wide as we can.
I'm not convinced by your proof. Just send the robots ahead to build the base before humans come.
If you don't specify how long it takes I think the odds of having human basses on the Moon and Mars at some point in the next centuries are high.
Look, the GP went beyond "colonizing" into "a multiplanetary species". We have already landed and walked on the Moon, we've established an extremely safe and stable outpost in LEO, but we haven't even colonized Antarctica!
Think about that for a few. We can't colonize Antarctica. It is not far away; it has plenty of breathable air; it's... replete with water, if you will. But still, there are only a few scientific outposts that are unsustainable without constant resupply and staff changes. That's not a colony.
I don't believe we could colonize the Moon. I mean, the astronauts could walk around after landing, and the supply chain isn't absurdly long, but to sustain a Moon outpost you'd need a perpetual supply chain, sending up needed provisions.
I don't know about your definition of "colonize" but, generally on Earth, that means putting down roots and establishing a rather self-sufficient presence that happens to consist of foreigners. How does a colony of ants get established? They find food and resources nearby; they begin mating and reproducing; they build with what they find. The ants are not smuggling in breathable air, food and water over 10 miles away.
The supply-chain to Mars is ~6 months. I mean, you can fly humans there in about 6 months, every 26 months. Now imagine that you have a "colony" or "outpost" on Mars that needs perpetual resupply. Can you launch 26 months' worth of provisions in the short window every 26 months? Can you launch the provisions during the worst-case window, when it will take much longer to arrive? Are you going to send a bunch of provisions up with the robots in advance?
Those resupply logistics are just nightmarish, and they are daunting to envision, even if everything goes right with every single launch and voyage. The margin for error is nil. The opportunity for rescue or emergency escape, is nil. Again, send humans to Mars, but don't expect to get them back in one piece!
So, I contend that even with spinning capsules, and advance-team robots, and even with some magical method of extracting resources for fuel, a Mars colony or self-sufficient outpost is infeasible with current technology, as well as any foreseeable future technology. Sure, set up a "Moon base" but it will always be more difficult than Antarctica, and never self-sufficient. Rescue and escape from the Moon are likewise unlikely.
The thought leaders who are promising "multiplanetary species" are leading you down a primrose path. They're encouraging fantasy scenarios so that young kids will enter STEM programs and pursue science career paths. They solicit donations and support for tech programs that are, ultimately, just part of the military-industrial complex.
But it's all borne on the wings of sci-fi imaginations and not gritty reality. I was just chatting with my parents about how the ISS smells, and how chaotic it is. It's worse than a submarine. It's sending our best & brightest to camp in a hoarder house. They've got a chance of survival if things go wrong up there. On the Moon or Mars, they wouldn't. They won't be smiling, and they won't be growing potatoes.
Re potatoes you can grow them indoors https://offgridworld.com/growing-potatoes-in-thin-air-with-a...
I don't think anyone was undervaluing the "space" segment of SpaceX. It's the clear leader in launch frequency and cost-to-orbit among the new wave of space firms, and shows no sign of losing that position.
Where the IPO raised a bunch of red flags was SpaceX suddenly acquiring Elon's AI firm, which had a significantly more nebulous basis for its valuation...
We must send our best people to represent Earth. Lets send a trillionaire and the next 300 richest billionaires.
Trillions of dollars are being dumped into companies when frontier level open weight alternatives that are able to be run on ever more reasonable hardware already exist. It feels reminiscent of how everybody certainly knew that tulips could just be planted, but people operate under their own assumptions about the world and its future, and sometimes it can lead to quite odd outcomes.
I tend to frame this as beneficiary vs. investor perspective. I'm a beneficiary of AI, not an investor. I couldn't care less about whose name is on the model, it doesn't affect the way the technology transforms my life, or the world around me.
And I don't think the reason things aren't done isn't because they aren't economically viable, but because there's no interest in doing them. Could somebody start a megacity out in the middle of nowhere? I mean probably, and it might even be a good idea, but things like this require a visionary to get them going. Electric cars prior to Elon were glorified go-karts for virtue signaling hipsters. It's not that they were inherently viable, but nobody had really shown the path forward yet.
And here there's already major interest and money behind it, so getting started won't be a problem. And from that point, the path forward will become ever more clear.
Anthropic is a one trick pony and the world is discovering lots of other cheap ponies that do the same trick.
A brilliant line from the movie Margin Call (a fictional portrait of the actual events of the 2008 crisis) that appears likely to get reused in upcoming AI bubble burst movies.
That whole scene is absolutely full of perfect observations; I refer to it often in different contexts.
It's the first film JC Chandor ever directed, from what I understand to be his first feature-length film script.
Another great quote: "I run risk management... it just doesn't seem like a natural place to start cutting."
Yes, it's indeed likely those movies will be made entirely by AI.
I mean, compared to the desired IPO valuation in the trillions, it certainly deserves the "mere" description, but still...
Keep all the Mythos/Projects/etc. hype/feature-creep crap in some other entity and value that at $5 tn or something if you wish.
They are a service company, selling home-grown, mass-produced, conveniently packaged intelligence at a well established price for consumer. Their API pricing might just be for value proposition and tax deduction purposes.
Every tech company, tech department, startup that I know is using claude code to deliver. The boutique deepseeks, qwens, glms and kimis are nice, but ain't production ready in 98% of cases. All the pi's, opencodes, etc are nice, but much less enterprise friendly. And google just outright sucks in comparison. There's a use case for each, but not at the scale Anthropic is doing.
Only real competition - OpenAI - is close, but they're burning money to stay there, which imo is unsustainable long term.
Is Anthropic worth $2T? Can't say. But boy they have a good opportunity to test this, and they may not have a similar chance in the future.
I think they have a fair chance at this.
With harnesses I see little difference between what Zed or Pi gives me and what Claude Code gives me. Enterprise features? The AI can help code those in a week.
AI itself is a great breaker of moats.
The question isn't whether they lead today. It's whether there's any kind of moat. Without a moat, frontier model development is an industry like chip fabrication or large volume manufacturing. Those industries are a red queen's race where if you stop innovating for even a short while you sink. Ask Intel what happened when they decided to coast for a few years.
Chip fabs and bulk manufacturers make a lot of money, sure, but they don't command such a multiple. Anthropic is priced like they're going to be to AI what Google was to web search or Apple is to (US at least) mobile and higher-end PCs.
I don't see it. I think they'll be a big player but that big?
Of course... maybe if they suddenly have that much cash they'll be able to carpet bomb the entire world with AI doom Rationalist ideology and buy their regulatory capture and outlaw their competition.
I've seen firsthand attempts at integrating open source in place of it and they all failed. Time is money and it costs premium. Touching the ground running is a huge advantage. That's why cloud services stuck.
The same is unfolding with Anthropic. It’s doing important work but everyone is realizing it’s not got a serious edge over anyone else. It’s important but ultimately a boring business. It’s still likely worth a few hundred billion, which is massively impressive for any startup, but trillions is pipe dream.
The thing that makes the frontier labs frontier is mostly access to huge amounts of training data and compute. In the earlier days of AI access to top AI talent was a moat, but that moat is rapidly eroding as more and more people familiarize themselves with the "black magic" of LLMs and training. The success of the Chinese models is evidence of this diffusion of knowledge.
Give me a team of, say, 20 good engineers with a deep knowledge of AI/LLMs and training and give me a billion dollars worth of GPU compute and a huge amount of training data and I'll give you a frontier model.
No moat.
Simple reasons being no nonsense nanny refusals & it's cheap/good enough to get the everyday production parts done fast and reliably for next to nothing. Your experience is not what I see at all, but İ don't work with megacorps or in the Valley anymore, so it's possible those powers will carry the weight to some extent, until they won't or can't.