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Comment by muvlon | Hacker News Reader

You can cherry pick the bad ones if the point you want to make is that it's risky. Nobody is saying Anthropic is definitely going to 0, just that there is a risk.

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But from an economics perspective OAI/Antropic are more similar to Amazon than to Pets.com. Pets.com always had a heavily negative COGS - they were in the business of selling $20 bills for $15. On the flip side, Anthropic appears to be positive on COGS, and OAI could get positive by cutting limits on free and $20 plans. OAI/Anthropic are negative on the books mostly because of massive R&D expenses. This compares well to Amazon circa 1999, which was positive on COGS but negative overall due to massive buildout R&D costs.

Note that I'm not saying OAI/Anthropic are destined for success - because the rate of change combined with competition with cheap Chinese models is pretty novel in the business case history. But I am saying that pessimistic dot-com-boom comparisons don't seem to be all that deep.

AI subscription plans are selling $100 bills for $10, they are way more expensive to the company than people buying metered tokens.

"they are way more expensive to the company than people buying metered tokens" is true, but that doesn't mean they're a massive loss as you imply. It could be that plans are effectively breakeven but tokens are highly profitable.

But this is further to the point that the economics are more Amazon than Pets.com. If the plans are losers, great, when they need to be profitable they kill the plans and focus on metered tokens.

> OAI/Anthropic are negative on the books mostly because of massive R&D expenses. This compares well to Amazon circa 1999, which was positive on COGS but negative overall due to massive buildout R&D costs.

Isn’t the difference that ai labs can’t stop the R&D spend? They have to continue training new models.

There's a bunch of arguments you could make there, varying from "yes, to stay ahead of the competition" to "yes, but it'll get a lot cheaper" to "no, things will plateau eventually". All those are datapoints that IMO this isn't a great analogue to the dotcom boom.

Except their own filing shows it’s getting more expensive, not cheaper. It’s highly unlikely that they’ll ever be able to stop.

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