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Comment by bakugo | Hacker News Reader

I think all numbers coming out of Anthropic are utterly meaningless until we can answer the question of "just how subsidized are those subscriptions?"

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Their financial statements suggest the answer, even when you take into account the cost of training the model, is now 'not at all'. They are profitable, the main questions for their valuation are 1) can they keep their margins, 2) how big can they grow?, and 3) can this growth match what they have committed to?

Question one is how do their investors get paid back. I found Series E through Series H totaling $111.5 billion in investments. Since series E was $3.5 I’m assuming all the previous rounds added up to less than that, so let’s say 115 billion at the outside.

That debt will transfer to public shareholders at the IPO but also will double or triple in the process, as the investors expect to be paid very, very well. So the current shareholders are looking to extract something over $400 billion from the IPO.

With the current revenue they might pull off that P/E. But they’ll still be extracting some of that value from the customer base, because shareholders will demand it.

Not at all, the subscriptions have an adjusted gross margin of approximately 85%. Very profitable! The training is a different story though. How long will the subs last if they stop training? Also, why on earth would they put on the breaks and try to be profitable when they have plenty of funds and are in the growth stage?

The subscriptions are a key part of the engine to ensure The Machine can keep improving itself by harvesting all that data and feeding it back in. Many of the enterprise contracts forbid the lab from training on their data, so the subscriptions are a form of gold.

The subscriptions do not require training on your data.

The exact meaning of the "don't train on my data" checkbox is pretty hard to pin down.

Anthropic lay it out pretty straightforwardly here: https://privacy.claude.com/en/articles/10023548-how-long-do-...

It's of course possible that they are lying, but I would like evidence of that if so.

The contracts might, but do they pink promise?

The company was founded under the principle they will violate laws to acquire training material

This is another story, and I'm inclined to agree with you. They are desperate for more data.

> all numbers coming out of Anthropic are utterly meaningless until we can answer the question of "just how subsidized are those subscriptions?"

Subscriptions are a growing minority of revenue.

Doesn't their S-1 render this irrelevant? Their financials are clearly much better than we thought

their gross margins point at this not being an issue.

Ah the beauty of circular financing. By owning the company who pays me to provide a service, I stand to gain massively by giving them a discount, making them look profitable, and fooling investors in to providing my exit liquidity.

Which of Anthropic’s revenues are circularly financed?

Is ChatGPT down?

If you can’t answer this, perhaps.

The criticism has been about folks downstream of Anthropic being circularly financed. I haven’t seen credibly claims of Anthropic’s revenue being circular, but if you have a source, by all means.

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