alt Hacker NewsI think when these companies IPO later this year, we’re going to see the reality of the PNL numbers and whether they are sustainable etc as all the financials will become public.
Rumor mill suggests that Anthropic might be profitable (but at what magnitude), OpenAI is not profitable, Google is mostly vertically integrated and has a low cost structure as they are have pre-existing data center buildouts, their own silicon and experience that suggests they will be able to operate at a very low cost, but they still have to justify their spend.
I think having to report numbers publically on a quarterly basis will bring the whole thing into reality.
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Agreed, and assuming local open AI models start catching up, which they seem to be doing, the foundation models' hold on society gets a lot slipperier. If there's a "what to do about all this" from an engineer's standpoint, pushing the needle toward local models, whether in research, agents, or just using them, understanding how they work, and advocating for them when it makes sense (which is more often than they get credit for) is probably the best ROI.
Google really needs to work on the user experience. The Google Cloud based approach to Gemini for coding is so clunky.
Anthropic have only scraped together a month of profitability by cooking the books. They have an extreme compute discount from spacex that only applies for the first couple of months of the deal. By pushing the costs down the road they can make themselves look good before IPO. Even they have admitted publicly though that they don't expect profitability to last.
i think the narrative of “all white collar employment replacement in the near future” can sustain their public market valuation for many years, regardless of how profitable they are in the medium term.
> having to report numbers publically on a quarterly basis
They won't need to do that if the new rules come into effect.
> I think having to report numbers publically on a quarterly basis will bring the whole thing into reality.
That is a good reason that all companies (over a certain size, say in terms of gross expenditures) should have to report such numbers. There's no reason that huge companies should be able to distort the economy while not having to report anything just because they're not publicly traded.
you: insurmountable cost structure for LLM providers
also you: only three companies make LLMs people pay for
sounds like a 15 minute phone call to form a cartel is all that is between them and profitability? less money has been made on more complex schemes.
> later this year
One can hope that reality intrudes before the bubble gets even more dangerously inflated, but how many years has Tesla had a ridiculous P/E ratio. Even after growth stagnated and market leadership was lost in Asia and Europe. Number still goes up.