> Leverage might also be a requirement for the product if you don’t already have compute. Anthropics lack of compute is strangling it before our eyes

Two sides of the same coin. A leveraged farmer buys tractors up front and can sow more land. That pays in a boom. The one who bootstrapped is “strangled” by being unable to go after land until they have cash. If demand falters, however, the second farmer—worst case—has idle tractors. The first owes payments he can no longer make.

Bringing it back to AI, Anthropic seems to show you don’t need massive leverage to at least compete. They did it with equity. It isn’t bootstrapping, like the example above, but it’s closer to that than the full tilt OpenAI has gone on.

Knowing what we know now, Anthropic came in underlevered. They should have borrowed a bit. Given OpenAI is missing sales targets [1], it seems they are probably overlevered. They have similar revenues and valuations. Put together, that makes OpenAI more bubble-esque.

> a bubble can be caused by over exuberance in equity as well. And Anthropic has that in spades

Agree. But putting aside idiots who may have levered their Anthropic equity, overvalued equity means you get to fight another day after a crash.

[1] https://www.wsj.com/tech/ai/openai-misses-key-revenue-user-t...