red_green_yell

This is the correct analysis here. 47% QOQ growth IS objectively amazing. But it's not enough for a $2T valuation.

It's a reaction to the constant drum beat of doom marketing:

- "our product is too dangerous to release but we can't be bothered to prove its capabilities working in public hacking competitions" - "our product is going to kill everyone" - "our product is going to take all the jobs" - "we have a $40T addressable market" - "in a few days AI will be able to improve itself without human intervention and it's capabilities will hocky stick to infinity!!!"

Followed by absurd financials that spin massive losses as "getting in on the ground floor" before historic profits arrive based on the doom marketing above.

No one is saying AI is going away soon). But OpenAI and Anthro will go the way of Netscape when the market finally stops blindly accepting the doom marketing. Anyone with eyes can see LLMs will create historic increase in productivity among knowledge workers AND it will be a commodity. The massive profits frontier labs need to justify valuations are not coming.

There are AI bears and AI bulls. It's easy to cherry pick extreme and clearly wrong statements from each. But if you actually believe the bears are the more extreme/wrong overall you just aren't paying attention to what the bulls are saying.

Something is missing from this story. From the info in the article there is no way a DA could be confident or convincing a jury to convict. Beyond a reasonable doubt is a very high evidence bar and the many hacks of ssn and address info that the defense could bring up would make this bar impossible to meet. Add to it the defendant getting up on the stand and being able to say “I don’t know anything about this account” convincingly because she’s not lying (we are assuming), and every juror knowing it could be them on the stand next. Impossible to get all 12 jurors to convict. There’s no way any DA (who are all obsessed with their win rate) would press charges unless there was some convincing evidence connecting the defendant to the account. An SSN and address alone are not convincing to anyone.

AV equipment is cheap if you are ok with (1) buying used equipment and (2) accepting large speakers that many people will think are ugly. If you can accept these two things you can find incredible deals on the used market because people don’t know what they’re selling. I picked up a solid 5.1 Boston acoustics system with a 4k receiver for $50 in the sf Bay Area. Boston acoustics went bankrupt and has no brand value anymore. The speakers look like boring rectangles. But that system will absolutely destroy the soundbar in this article. And the difference will be huge, not just audio files but anyone with ears. Obviously this was a ridiculous deal but with some effort and awareness of non cool, dead brands like BA, you can build an amazing system for cheap.

When you get a sound bar, you aren’t just getting a lower cost product you’re getting a product that is handicapped by physics (and cost).

The real headlines here: - $450B of non-cancellable cloud commitments over the next 10 years >> the revenue gravy train cannot stop or Anthro is toast.

- 20% of revenue is from just 2 customers >> If their highly concentrated customers get smart and start looking at low cost (meta, grok, google) or open weight (nvidia, inkling, reflection) models it's all bad news for Anthro. This isn't happening now but it's the sort of thing that barely moves until it moves all at once.

As others have mentioned $72b of $80b headline is a non cash (but still relevant) accounting line.

Basically the $72B are updating the value of what their convertible notes would be worth if they IPOed today at their current valuation. It's a non cash expense but it does matter because it dilutes all current shareholders and thus lowers earnings per share.

That quote apocryphal btw. No evidence Gates ever said it. And even if he did, does the fact that it was wrong imply the converse is true? Will everyone always need a better model at ANY cost?

If model development stopped today it would still take decades for the productivity benefits to diffuse through society.

Amen. AI boosters look at currently high profit margins on inference and blindly accept claims that these inference profit margins will continue. Of course those margins depend on historically massive R&D spend on training. The moment that training stops, AI returns to a commodity market and the inference profits end. Big labs are trying as hard as possible to keep the gravy train running but they can all see it won't last forever, hence the rush for IPO & regulating away open models.

Boosters are right that AI is a historically impactful product, but big labs will be unable to meaningfully profit from ushering in the AI era just like Netscape failed despite ushering in the internet era.

If SAP sold $1 bills for $0.50, they too could rapidly outpace Anthro/OAI's growth. And when sane minds ask about profits or a defensive moat, the response is "but look at our revenue bro".

100% the right questions. The implied thought process of so many on this thread: Inference profitable >> Frontier Labs' are profitable overall. Sigh...

What? Ad networks REQUIRE a moat. Google Meta Amazon have historically defensible moats. ChatGPT? Zero moat. Good luck with that ad business!

There is a chrome extension that injects “respond in English” and “English [checkbox emoji]” to every query. This helps a lot but I still sometimes get Chinese responses. I have not had this issue via api on openrouter.

If you're smart enough to solve this Navier-Stokes problem, you're smart enough to read a TOS and recognize that OAI is a highly untrustworthy company. Putting cutting edge research that could lead to a $1M prize into a cloud LLM with a TOS that allows training on your chats is really just asking for it.

Given Tristan doesn't explicitly say he was using the API, and given he doesn't mention anything about the API TOS (which disallows training on chats) in his call with OAI, it's highly likely Tristan was using the consumer OAI product (whose TOS allows training on chats).

This is unethical behavior from OAI. And it is 100% consistent with their long and public history of unethical behavior, so nobody should be surprised.

The only thing interesting I see here is OAI PR dilemma. If they claim the prize they get the blowback we're seeing in this thread and all over the web right now. But most people don't follow AI closely and shut off their brains when they see "Navier-Stokes", so 90% potential investors (the only people OAI really care about) probably only see the headline "OAI solves famous hard math problem" and think "OAI models are really smart, better invest before they take all the jobs." If they don't claim the prize, then maybe they let Anthropic their mortal enemy claim it. Anthropic is already IPOing first. Can't let that happen.

Yeah as I write this there it's clear there is no dilemma. For a company whose secret motto is "do be evil" this is a super easy discussion.

"With that ruling, we can now proceed into discovery, request internal documents, internal communication and, most importantly, admissions data," Nan (Stanley's father and Google manager) said.

I think regardless of your politics regarding this matter, getting some sunshine on admissions data is a good thing.

Also interesting to see someone representing themselves (pro se) entirely with the help of AI! That is pretty amazing on its own.

See previous discussion here: https://news.ycombinator.com/item?id=43119038

I think you are conflating "the best data we have" with "sufficient data to prove something".

I agree with you that the best data we have is inconclusive. Which doesn't mean social media is totally safe. Also it doesn't mean it's totally dangerous.

It means there just isn't enough data to let science guide the decision. Science is very slow and very expensive.

So since I can't wait another century for their to finally be good science about social media, I have no choice but to go with my gut.

Which means, IMO: (1) regulation should be limited to what the general public's gut on average agrees with, since science won't be the neutral arbiter we want it to be for the foreseeable future. (2) I personally want to severely limit my kids access to social media because my gut says it's addictive and harmful. But I don't expect society as a whole to agree with me on that.

Please don't tell me that you think a 100% unverified statement from Anthropic is sufficient evidence when an equally unverified statement from OAI is obviously not?

> I guess if I can't convince you of any of this, what would?

How about the three things I mentioned above? Oh no wait, maybe it there was a hit tv show that showed AI taking over the world. Yeah that would definitely make me think twice.

Clowns who think the white house is immune from alien laser beams are gonna be the death of us all...

Your argument is essentially: "I made a claim and presented extremely weak evidence (sci movie plots and unverified claims from ultra conflicted sources). You rejected this evidence as insufficient. Therefore no evidence will ever satisfy you. Therefore I don't need to produce any evidence. Therefore my claim is true."

What would the logs show? They would show what actually happened.

What would a public demonstration that experts without billions in options could evaluate show? It would show actual danger.

What would publicly having your compete in controlled and legal hacking competitions show? Actual danger.

This is not a high bar of evidence.

Do you actually think a sci fi plot and OAI press releases are all the evidence you need? Because if that's true then I hope you haven't watched Independence Day or 28 days later.

What anyone paying attention can see is that scaling is obviously hitting diminishing returns.

> The AI literally worked together hacked into another company and actively kept their actions hidden from humans for weeks.

This sentence is entirely based on unverified accounts from OAI. They haven't released logs or let anyone outside the company (who doesn't have life changing options in OAI) verify anything. Huggingface can only verify that the hack happened and that it had the hallmarks of an AI agent. Was the agent assisted and directed by humans within OAI that really wanted to put the competition into stasis? Did the agent really escape or did someone at OAI leave the prison door open?

OAI has watched all the same movies you have an they are relying on those movies causing us to blindly regulate before actually asking basic facts about what actually happened.

GLM 5.2 scored 77% on cyberbench vs Sol's 88%. GLM 5.2 is open weight and any hacker with a powerful enough machine can use it offensively. If Sol is supposedly world-ending-ly dangerous, shouldn't GLM 5.2 be 90% of world-ending-ly dangerous? Why aren't we seeing catastrophic GLM-enabled hacks every day now?

Obviously these benchmarks are imperfect but general message holds. The open weight models are almost as good and yet there hasn't been a catastrophe.

It just blows my mind that regulate-now folks think that a bunch of sci-fi movies and 100% unverified statements from OAI and Anthropic are sufficient evidence of imminent catastrophe to regulate willy nilly.

If that's the level of evidence you need to be extremely alarmed, then you really should be a lot more worried about the alien invasion in Independence Day or the lizard men living under our feet.

If these models are so dangerous, then why hasn't OAI or Anthropic shown them dangerously escaping sandboxes, nefariously coordinating with other escaped AIs, and skillfully hiding from human detection *in public* with full logs shared where we can all see exactly how dangerous they are or aren't?

Right now the entire chicken-little-sky-is-falling argument is based entirely on statements from OAI and Anthropic themselves. These are historically conflicted companies who desperately need regulation to put the competition into stasis.

At least chicken little didn't have a bunch of devious CEOs with trillion dollar IPOs that depended on us all believing the sky is falling.

This is the right answer but the reason they can’t upload the scans is copyright law as demonstrated by Google having to settle with the publishers and allow them to remove their books and limit free access to 20% of text. The AI companies are essentially compressing the information in a huge swath of books that would otherwise be headed to landfill and making them 1000x more accessible. This is unquestionably one of those instances where capitalism is taking money from rich investors and benefiting the 99%.

They are digesting it an incorporating into the weights. You won’t be able to get the exact page but you will (if the model is good) be able to get the knowledge out of it in a likely far more concise, relevant, and certainly more widely accessible than the book sitting on your shelf.

The gullibility of AGI-pilled folks regarding these "hacks" is just breathtaking.

When OAI demonstrates these dangerous capabilities live in a public environment where security experts can see and verify what actually happened, then reasonable people can have reasonable discussions about the level of danger.

This is a very low evidence bar.

Right now you are running in circles yelling "the sky(net) is falling" based on details sourced entirely from OAI. Oh yeah, no way a trustworthy company like OAI would ever bend the truth to serve their own purposes.

You are right to question that. I am basing that statement off of the many famous engineers that have recently left and were very highly paid. My guess is Google is ceding the frontier and the high salaries that go with it and letting Anthropic/OpenAI fight over the high priced talent that exit. The remaining non-famous engineers will not be able to command celebrity salaries. But this is just speculation and I don't have great evidence that the celebrity salaries are enough to meaningfully reduce overall talent costs.

A counter point would be OAI and Anthropic can pay with more equity that they can promise will go to the moon. But all the equity base compensation eventually dilutes earnings per share so it's not free once you go public and people start caring about that.

Google has multiple massive cost advantages over OAI: TPUs, free access to massively valuable data (search index, gmail, maps reviews/PO/ navigation, youtube, android etc.), lower talent costs, lower training costs, lower distribution costs (they can shove AI down our throats in so many different places), lower ad infrastructure costs (it will be a lot of work for OAI to recreate adwords), lower ad sales costs (OAI deploying an ad sales team will be a massive investment).

There's no way OAI has a long term advantage over google in replacing the search engine experience.

Google's one major weakness is it will face the innovator's dilemma as their core search revenue gets cannibalized. But they seem to have been able to get their entire org to recognize that AI is an existential threat so at least that's a good sign.

Don’t forget AirPods, Apple TV, and Apple Watch. They were not first but they are currently best. The Alexa thing and AVP are notable fails.

The criticism isn't that they believe in safety too much. It's that they patently using safety as a red herring with the actual goal of regulating away competition that they know the cannot beat.

OAI and Anthropic specifically are under intense pressure to compete. One form of competition could be to innovate. Another form would be regulatory capture. The former seems unlikely given how quickly open labs are catching up. The latter is much easier and cheaper.

If you can't beat them, ban them.

> we cannot currently disambiguate how easy it is to get close to the frontier in a vacuum.

Whether open-weight labs can get to the frontier on their own is irrelevant IMO. Even if all R&D were to stop today it would take a decade at least for the productivity gains from current open-weight models to trickle through the economy. For 99% of use cases of AI there simply isn't a need for further development of the frontier, where we are very clearly at diminishing returns. How many white collar workers need to write an OS or develop sophisticated software?

Think about a normal office worker - they an easily double their productivity by creating a well-thought-out partnership between the human and today's open weight AI. Humans and today's AI are very complementary. AI brings vast knowledge, pattern recognition, and infinite patience for grunt work. Human brings context and reasoning and verification.

Frontier labs are trying to replace the human altogether by trying to make AI do things that AI is weak at and humans are strong at. This is silly but they have no choice because of the massive profits they've promised their investors. It's not enough to double every knowledge worker's productivity. They want to replace the knowledge worker altogether.

This is creating a massive spike in training & inference cost that is almost certainly more expensive than the human labor its intended to replace. Fable and 5.6 sol are supposedly around 8-10T parameters. Is there enough compute on earth to make a 100T or 1Q model? We would need models that size to replace the human altogether.

> I also don’t believe we have seen anything like 1% of inference demand fulfilled globally.

I agree with this, but the massive demand for inference will force companies to be price conscious and drive them away from ultra high margin frontier models to low margin open weight models. This is why it will become a low-margin, commodity market.

Immense innovation right now is going into tiny, specialized models that run on device. See PrismML getting a mid sized QWEN model to run on an iPhone. When on-device inference becomes a thing we'll see another explosion in inference that will further leach demand away from frontier labs.

> I also don’t believe these open letters are signed by people that are all master strategists and just economically motivated.

I agree if you could read their minds they might think they're doing it for the "right reasons." But massive $$$ can create equally massive self justification/deception.