The lack of a clearly profitable operating model and huge (trillions) in commitments for buildout is what concerns people.
I am not convinced by this person who is not convinced there is a bubble. The bubble, by the way, specifically refers to the valuations. Is Anthropic worth 1.2 trillion when it’s not clear they will have positive cash flow in the foreseeable future?
Maybe think of it as a bimodal thing. I can easily imagine a future in which Anthropic builds a sustainable profit model, grows into new sectors, and is credibly worth 7T in ten years.
I can also easily imagine a future in which AI capabilities continue to increase but the amount that enterprises are willing to spend on Anthropic’s services to do, and in which that, plus ever-increasing competition, cause Anthropic’s revenue to grow slowly, stall, or even contract. And that Anthropic would be unable to raise sufficient capital to make up for it and would therefore forced to default on their obligations. (Or that they would be able to raise enough capital but on poor enough terms that existing investors take substantial losses as a result.)
It's just a total gamble, is that the claim?
> I can easily imagine a future in which Anthropic builds a sustainable profit model, grows into new sectors, and is credibly worth 7T in ten years.
I can easily imagine a future in which Anthropic fails to find a market fit that results in the kinds of profit that will cover their current spending commitments, and where the company is another casualty of progress.
Of course it is a Gamble. Anyone who knows anything understands there's risk
Every one of the few companies with that kind of valuation generates tens or hundreds of billions per year in free cash flow.
Are you saying that these AI companies dont have trillion dollar valuations? Looking at reality, you appear to be wrong on the facts.
You call that a gamble and I ask the difference?
You would price them different-thats fine. All a valuation is is what someone is willing to pay. In this case - not you. I might put a different price on my lucky socks than you would.
They are down because of capex investment, but Meta is showing what’s possible with AI. They have been shrinking their workforce and steadily growing.