Join the discussion
Write your take first — we'll ask for email only when you're ready to publish.
- Hacker News
- GAAP or non GAAP profitable?
- non GAAP. If they were GAAP profitable they either wouldn't be sharing or would be IPOing already.
- > before accounting for revenue shared with distribution partners, including Amazon (AMZN.O), opens new tab, and the cost of training its model, the newspaper said.
"We are profitable when we ignore our costs".
I wonder what other funny strategy they may employ to claim 80% margins.
- very convoluted, number game but probably works for casual investors who just want to put money in something.by jimmydoe
- these are not casual investors - anthropic is not publicby ufish235
- Yes, but --- using something they call "adjusted operating income".
This is reportedly a sort of "Enron" accounting which excludes some really big expenses like revenue sharing, the cost of model training and hardware deploymments which are kept off the corporate balance sheet using "special finance vehicles".
https://www.msn.com/en-us/technology/artificial-intelligence...
by jqpabc123 - It's really easy to be profitable when you exclude all of your expensesby mixdup
- >This is reportedly a sort of "Enron" accounting which excludes some really big expenses like revenue sharing, the cost of model training and hardware deploymments
source? this seems false. reportedly the adjusted profitability includes inference and amortized training costs
by sigmar - Blockbuster was profitable if you only considered its Milk Duds sales.by KevinMS
- GAPP or ACSOI? Adjusted Consolidated Segment Operating Income from the groupon days....by ChrisBland
- Is this community adjusted EBITDA?by maherbeg
- I believe that their desire to slow down AI development is just for profits.
Active competition requires constant reinvestment and does not allow them to milk their trained models long enough (except poor Haiku maybe).
by burgerboii - I imagine there are many other businesses that would be profitable if they excluded all of their largest costs from their reporting.by cdrnsf
- Fun fact: most, if not all, tech startups are actually “profitable” under this assumption.by stymaar
- Turns out building houses is super profitable once you remove the cost of building materials, labor, and land.
- "profitable without COGS" doesn't actually mean anything at all does it?by nemomarx
- Is that basically: We'd be making money, if we didn't have to build the product?by mrweasel
- Profitable without Capex, i.e. gross margin. Inference is included in COGS. Capex (training) is not. That's reasonable.
- Seeing a lot of tricks similar to how ridesharing companies tried to be "profitable" before going to IPO. Caveat: Thing have materially improved but really Uber is carried by its insane Ads margins
The idea of removing model training from your costs is a little wild tbh.
The profitability of being able to serve a query wasn't really under question (nor is the margin expected to be anything less than 80%+) I think.
by darkwizard42 - Well then you haven't listened to Ed Zitron or any of the other AI bubble doomers. His contention is that its worthless and they lose money on every query.by sphinxterai
- I didn't realize how much money Uber makes from ads.... Why does every business devolve into an ad platform?by awongh
- > idea of removing model training from your costs is a little wild tbh
It's one of several metrics and tries to estimate steady-state profitability. It's the only one being leaked because it's the most sensational one. But don't assume cash-flow profitability is negative just because you don't know it.
- > The profitability of being able to serve a query wasn't really under question (nor is the margin expected to be anything less than 80%+) I think.
HN had long debates about whether AI inference could even be affordable from a compute perspective.
- I think part of the big push to "slow down AI development" is to add some sort of regulatory pressure that will give them sort cover to train less models and slow their burn ratesby TSiege
- I can’t count the number of times I’ve heard variants of ‘they’re losing money on every query’ and ‘I’m getting 10k worth of tokens for $200’ over the last year. People clearly believed serving margins were -veby itkovian_
- > The profitability of being able to serve a query wasn't really under question
In one sense, yes, but I do see people question it regularly.
by aesthesia - > The idea of removing model training from your costs is a little wild tbh.
Yeah, I didn't believe they'd claim something like that. But yes indeed, from the article:
> Anthropic's gross margins are above 80% before accounting for revenue shared with distribution partners, including Amazon (AMZN.O), opens new tab, and the cost of training its model,
Is this how all AI companies calculate if they're profitable or not, by removing the highest costs? What a circus.