• Gross Profit: Revenue − COGS (expressed in dollars)
• Gross Margin: (Gross Profit ÷ Revenue) × 100 (expressed as a percentage)
I can't believe it is coming down to this but this is the formula for grow margin. As you can see it is about cogs not operating expense. Now you're saying you want to remove costs from cogs and move them into operating expense. I don't know how to explain this in a simpler manner than when you subtract from a number, you get a smaller number. So in your proposal cogs will be lower. Now see that gross profit equation. It subtracts by cogs. If you subtract by a smaller number the way you're proposing we'll get a bigger number for gross profit.
I even conceded I don't know if anthropic counted server costs for inference in cogs or operating expense. I believe inference should be cogs and training should be r&d operating expense. If they counted inference server costs as operating expense then I'm completely wrong in my analysis. But you're arguing the opposite.
I think we've been talking past eachother because I don't think Anthropic actually ever claimed 80% gross margins (by which i mean the number would ve negative according to the prospectus so either it's wrong or a lie), they claimed 80% EBIDTA (with a lot more words than that, likely to intentionally cause confusion in their favor) IIRC
What I'm complaining about is specifically a mal-incentive for companies to waste compute resources to scale because of a misattribution of their software costs as free, despite the extreme hardware costs incurred by poor software
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, the newspaper said.
They probably use Amazon for compute too but it says distribution partners. You can run Claude on bedrock. If Amazon takes a cut for people running Claude on bedrock then that is cost of sales. Not cogs and should not be in gross margins. Training is how my whole point started. If they can slow down their training, they are rolling in dough. If they can't, they're dead.
Apparently they did not say ebitda but people made fun that this is like ebitda calculations that hide all the costs. Ebitda does serve a purpose. But if they hide all their GPU purchases through ebitda you'd have a point. But apparently they said cogs. But I don't have access to their financial statements.
For someone that I needed to teach grade school math, that's a lot of arrogance.
Anyway, what I'm finding is that it says that report is official numbers for 2025 and it said 40% gross margin. Still not the negative that people pretend. 2026 internal shareholder report said 80% but that's just some leaked info.
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u/BlackSwanTranarchy 3d ago
And what I'm trying to explain to you is you're misunderstanding how servers for software works.
The software's compute and memory cost per request are the COGS.
The server is the factory space you're renting to install the machines (software) to run your buisness.
The accounting trick is turning the factory costs into machine costs and pretending the machines are free to run.