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Comment by reticulates | Hacker News Reader

> fears that they were excluding Q3 because it was a disaster were definitely wrong

That's a very generous reading. Anthropic's entire growth narrative is the rapid growth over the previous 12 months, from near-enough zero to $100bn+ this year. Now we see that actually growth is levelling off and that their revenue was ~$5bn/month over the last quarter, which is barely over their compute commitments, and nothing close to the $100bn+ leaked.

I guess if people thought Q3 would show negative growth rate, sure, it isn't a disaster, but their growth rate slowing so much is surely very bad and matches all the concerns commenters had.

And this is Anthropic! Anthropic are the financial success compared to OpenAI. OpenAI are doing much worse, so this does not bode well for OpenAI either.

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People will point out that +46% is still good, but this is like measuring the escape velocity of a projectile that's still at 1000 feet. It's not that the projectile isn't going very fast or won't get very high, it's that if you want to have enough momentum to break out of Earth's gravitation pull you can hardly afford any deceleration.

Businesses aren't projectiles

Their forward pricing prices in all expected growth... so if they don't have accelerating momentum that reduces expected price.

The point being made here I think is that the same can be expressed in natural english language that does not pretend to be a physics class for some reason.

That reason possibly being to grant legitimacy to an otherwise mostly illegitimate and equally mostly fictional branch of the economy (that whole MBA cluster).

You're now talking about the expected trajectory.

Really, you're talking about expectations ("expected") of the expected ("price") trajectory (actual business performance).

If the above comment was intending to say "chart go up steeper make price higher, chart go up less steep make price lower", then no dispute there. But that carries virtually zero predictive information about whether the business will achieve "escape velocity" (whatever that means).

You absolutely cannot predict Anthropic's fate based on their growth rate slowing from Q2 to Q3. Obviously.

You can predict the resting place of a projectile with information like this. You cannot do so with a business, especially one as dynamic as Anthropic in an environment as dynamic as today's.

Someone needs to tell that to the AI startups.

Analogies however are: they often fly over people's heads.

The analogy fails at precisely the thing it's attempting to do.

It's saying "like a projectile, you can predict the outcome based on just a sliver of data"

That is literally not true.

But they do have S curves. If you're on the shoulder of the S curve while your spending commitments are accelerating, that won't end well.

Presupposing where they are on "the" S curve is itself presupposing the conclusion, duh.

Most businesses are stacks of S curves (except when they're not).

AGI is supposedly the literal be all and end all. It's a bit embarrassing for the singularity to have an S curve.

Mathematically they can work very similarly though because you have a revenue growth rate, and margin. The question is can that revenue/margin reach break even before you run out of runway (the expected sum of all rounds of investing) .

The main difference I would concede is that gravity, mass, forces, awind drag etc are much easier to model.

Sure they can work very similarly. But they can also not behave very similarly.

Businesses can have stalled growth, degrading margins, etc. etc. and then simply... reverse it. They can raise more money. Their competitors can get regulated out of existence. They can do a literal infinite number of things that cannot be factored into a model like "a projectile."

That's why the projectile analogy is stupid as fuck. It suggests you can presuppose the conclusion by presupposing the conclusion.

It's a model that helps you make present tense valuations of potential futures.

No one said it literally is a projectile. It's an analogy and model. The similarities are in the present tense maths. It's presumed and beyond having to be stated that businesses exist in a complex set of variables all of which could change and might not be as predictable as the valuation maths.

You're not wrong, you're just not adding anything to the conversation that any but the most uneducated do not already know and acknowledge.

And the analogy is literally not useful in any way whatsoever.

It implies that you can know Anthropic's outcome from this slice of data. That is literally not true in any way at all.

Like it's not even remotely or analogously or roughly true.

Anthropic behaves like a high-growth business with a quarter of slowing growth. It does not behave like a baseball. Any conclusions you draw from analyzing it as a baseball will be de facto faulty because the two systems are nothing like one another. The most basic assumption of projectile analysis (that energy is not added in-flight) is the opposite of the most basic assumption of a business (that they are actively profit-seeking).

The analogy adds nothing except ambiguity at best and active falsehoods at worst.

>It implies that you can know Anthropic's outcome from this slice of data.

No it doesn't. All I said was that given how little we have to go on and how early in the process we are, a minor 2nd or 3rd derivative slowdown isn't a positive signal. All indications are they they need additional orders of magnitude in revenue fairly soon.

I also never said that it wasn't self-propelled. I was starting to write about waiting to see if another stage of propulsion comes online but I deleted it.

Okay, well if you weren't suggesting you can predict the outcome based on this slice of data, then "projectile" is a really stupid analogy. The defining characteristic of a projectile is that you can do this.

Do you respond to every metaphor this way?

Bad, misleading, and uninteresting ones, yeah pretty much.

Businesses also aren't financial statements. These are abstractions we use to understand and communicate about the world.

Correct. Which is why making a physical claim about a 2nd order derivation of a super dynamic system is goofy and misleading.

I think that's an unnecessarily pessimistic take. The way I look at it the industry did not wake up to how big this was until Q4 and so it makes sense that you would see astronomical growth in q1 and Q2 as everybody woke up and started adopting. Seeing the growth Taper down to a 4.5x annualized rate which to your point will only continue to taper but it's still mind-boggling at this scale ... you just don't have anything else like this in the economy. This is like hyperscaler Revenue scale achieved in 15 years being achieved five times as quickly. At this rate Anthropic will exceed AWS Revenue within a year

> At this rate Anthropic will exceed AWS Revenue within a year

Well that’s the point. They’re not continuing at that rate of growth.

>At this rate Anthropic will exceed AWS Revenue within a year

And in 10 years it will be worth the entire Earth's economy.

https://imgs.xkcd.com/comics/extrapolating.png

It is a lot easier to switch model providers than it is to switch cloud providers. And the open weight models from Chinese Labs make Claude a lot more of a commodity than any service provided by AWS.

> Now we see that actually growth is levelling off ...

I really don't understand how could it be otherwise? They're planning to IP at a valuation representing 5% of the US GDP and, unlike NVidia, they are neither selling shovels in a goldrush nor a business with decades-old proven track of records.

Are people really going to buy ANT thinking it'll 10x to 50% of the US GDP?

Aren't there better stocks to YOLO on if you think you could maybe 10x? And if you want something safe instead of YOLO'ing, aren't there plenty of companies much safer and much more boring to invest in than something IPO'ing at 5% of the US GDP?

Isn't the entire Anthropic narrative based on infinite growth? How is infinite growth sustainable?

> Aren't there better stocks to YOLO on if you think you could maybe 10x?

This is why any [consumer] investment in ANT is bad. If ANT goes 10x then congrats, we [the citizens] are in a crisis. If ANT goes 1/10x then congrats, holders of ANT are in a crisis.

10x year over year couldn't continue for long--they were what...3.5 years from exceeding US GDP?

47% quarterly growth is still 4.5x annual growth, which would put them at $300+ billion revenue in a year. This is still unprecedented growth for a company of this size.

The negative perspective depends on assuming that the 47% quarterly growth is going to continue dropping soon. And it is going to drop, since it's only a bit more sustainable than last year's growth. The question is how many hundreds of billions they're making a year when it levels off.

Very generous indeed. Here is the updated chart. The downward movement should not be overlooked.

https://x.com/billylo/status/2117276235852345425?a=4-pjgf1Ox...

A single downward point for one quarter is not a "trend."

I did not suggest a downward trend. (It's a trend graph)

If we assume LLMs will continue to advance at a pretty rapid pace (relative to the current rate of advancement; so, same or faster), all these numbers look good to me.

Some people just start out with wanting LLMs/AI/Anthropic to fail or be scams and consistently try to fit any new evidence pegs into those unchanging hypothesis-shaped holes. This group ideologically despised LLMs from the start and needs them to be fake.

>If we assume LLMs will continue to advance at a pretty rapid pace (relative to the current rate of advancement; so, same or faster

https://xkcd.com/605/

Yes.

>If we assume LLMs will continue to advance at a pretty rapid pace

Why assume that?

So much money have been given to that handful of companies and to that field, that it's pretty much guaranteed to plateau (it's not some small but growing market with lots of room to grow. It's already taking as investment a huge chunk of the economy, and the returns don't seem to justify it).

Most of it is a pre-IPO hype and a circular financing loop between Nvidia, Oracle, Amazon, and the AI players anyway, so the real returns are even worse.

Lots of people making the financial case against Anthropic are not anti-LLM. I think the technology is great, interesting, powerful, innovative etc etc etc my issue is with the garbage business that Anthropic and OpenAI are building and the nonsensical ideas people have about business in general. Technology is exciting, business is not, business is boring. Money come in, money go out. Selling technology, no matter how exciting it is, does not change the nature of business.

And yet one can argue that the "garbage businesses" you label are the ones doing their best at matching market demand. See how well things are going for other entrants, like Google, Microsoft or Meta. Putting Copilot in every app makes a whole lot less sense than Cowork, Codex and the like. They just are doing worse things while attached to traditional money fountains, like ads in social media and search.

If you have no theory of how to value a company any number looks good.

You can be bullish on LLMs profoundly transforming society while being bearish on the economy "digesting" this new technology fast enough to justify the incredible capital spending necessary to power it.

I am actually somewhat bearish on adoption/propagation. I would be expecting much larger numbers than these if I were bullish on it.

It doesn't matter how much they "continue to advance at a pretty rapid pace", if the economy has no actual demand for the new capabilities. Even if we accept the premise that LLMs can produce good code at scale now and automate most software development work, then what? As *an industry*, the bottleneck was that we needed people to write code, and that bottleneck has been removed since ~Opus 4.6. Where is the industry now bottlenecked which requires some significant quantum leap in model capability?

Don’t bother - these knuclkleheads don’t understand nuance and despite much of their devices being manufactured in China - they struggle to accept Chinese offerings can take significant market share.

Not if Anthropic consistently stays 6+ months ahead of all labs besides OpenAI.

Opus 4.6's coding ability is nowhere near as good as Opus 5.5's. Some model next year will almost certainly be significantly better at coding (and planning, and designing, and ideating) than Opus 5.5.

You're narrowly focused on writing code. What about when they can run entire firms themselves, better than the average human CEO could? What about when we have models way, way, way better than Opus 4.6 and 5.5?

The point is we will eventually very likely have AI systems that can do everything. Everything. Anything and everything a human can do with - or even without - a computer, and then better than anything or everything a human can do, including in terms of creativity and innovation and novelty and insight. Obviously I don't know when that might possibly be, and it's not happening next year or something, but you can't just pretend like we hit the cap on the technology.

> What about when they can run entire firms themselves

That would mean the whole idea of free markets will be rendered obsolete, instantly destroying the idea that investing in Anthropic is sensible.

I don't really follow how LLMs advancing leads to OpenAI or Anthropic being successful businesses? Those seem like orthogonal outcomes.

They're certainly correlated, even if one might quibble about the coefficient.

No there are just numerate people pointing out ANT/OAI need to make X $$$ to make Y $$$ spend make sense. The financials are separate from model capabilities, they can cure cancer and invent big dick pills and still go out of business if their balance sheet is fucked.

Yes, but their balance sheet seems fine to me.

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