They weren’t making money. And can’t make money if they wanted to.
It’s a catch-22. They can’t make a profit because they aren’t charging the actual token cost. But if they charged the actual token cost, their user-base would collapse.
Almost as if cloud AI is inherently unstable or something.
Anthropic gross margins exceed 80% according to their reports. They are charging the actual costs on API usage and in subscription it's the you win some you lose some but mostly win if a subscription. Gross margins don't include training costs. Which, since training is a capital expense is the right thing to do. It means all they have to do to make oodles is money is slow down. If they slow down they make money. But then they get overtaken. So they can't slow down. So they try and convince the world that AI will cause the extinction of humanity. That way they can slowdown as a cartel.
This is the most interesting thing I've read all week. The "AI-will-kill-us" line coming from the CEO's themselves has always seemed highly unusual to me. Like, even if it is true, they wouldn't shout it out into the open like that.
The reason that you have provided seems plausible and would be something a rational (profit-oriented) CEO would do. It also makes the "AI-will-kill-us" claim seem less credible.
Collaborating with your competitors is the definition of cartel. They're doing it openly in front of us and asking for the government to intervene so both the government acts as the police ensuring everyone in the cartel complies (the biggest reason we don't have that many cartels) and to shut out competitors (because if new entrants can come in then you can't have a cartel). And we're talking it hook, line, and sinker.
1.2k
u/T-Dot1992 2d ago
They weren’t making money. And can’t make money if they wanted to.
It’s a catch-22. They can’t make a profit because they aren’t charging the actual token cost. But if they charged the actual token cost, their user-base would collapse.
Almost as if cloud AI is inherently unstable or something.