I think todays latest models would satisfy most users, so it makes me wonder how soon until we can run it on our machines without having to subscribe and with China handing us freebies? I think they have dug well past the point of profitable returns before that happens, so I can see why big tech companies are scrambling to get into bed with US government more than ever as a backup plan when/if their big gamble fails. And now our corrupt government and its 3 letter agencies, they have bargaining power to use this tech and relax privacy efforts and add more backdoors for "safety and security" whereas in the past it was easier for these companies to say no. A match made in hell that we are all roped into now.
> I think todays latest models would satisfy most users, so it makes me wonder how soon until we can run it on our machines without having to subscribe and with China handing us freebies?
Because of the DRAM shortage, not anytime soon. But if you’re willing to pay for inference somewhere else, Deepseek Flash 4.1 is good enough [1]. It might be going to be extra cheaper soon, too [2].
There are probably cases where it's true though. 4K screens have been declared good enough, computers have come with 16GB of ram for forever now, etc.
It could be less that the current models are good enough forever but that if the prices for proprietary models get too high, people will switch to open or self hosted options. We have not even begun to exhaust the possibilities of the current models.
That quote apocryphal btw. No evidence Gates ever said it. And even if he did, does the fact that it was wrong imply the converse is true? Will everyone always need a better model at ANY cost?
If model development stopped today it would still take decades for the productivity benefits to diffuse through society.
The vast majority of LLM usage probably would pass evals equally well on a smaller model
I see tons of devs fretting about how only Opus is "smart" enough for the React CRUD web app they are building even though Sonnet and Chinese models are demonstrably equivalent for most real world developer use cases
Apple is very good at what they do. They will move mountains and invent new technologies to achieve their goals. But the goal is not the technology itself -- it's the experience.
People complained Macs had underpowered hardware. That's because Apple didn't need overpowered hardware to achieve the experience they wanted. Same for iPhone, and how it still has less memory than Android flagships -- by as much as half in some cases, or even more. But they simply don't need more for the experience. (Though recently they have felt the RAMpocalypse)
I believe the same will happen here, and everywhere. Apple will not release a frontier model just because they can. They won't pull ahead just for the sake of it. But there is a high likelihood that they will create much a better experience, that doesn't need a model to be at the frontier.
Of course, they also make considerably powerful machines now. Pushing your hardware to the limit is a significant experience these days, and Apple sees the market for it. Even if they do not create the next frontier model themselves, we may eventually find one running on Apple hardware anyway.
I also think that it is not just user experience, but developer experience that stands to benefit. Apple's developer experience has been rotting since Jobs died, but I still hold out hope that they will pull through. Call me foolish for that, though, if you must.
The real headlines here:
- $450B of non-cancellable cloud commitments over the next 10 years >> the revenue gravy train cannot stop or Anthro is toast.
- 20% of revenue is from just 2 customers >> If their highly concentrated customers get smart and start looking at low cost (meta, grok, google) or open weight (nvidia, inkling, reflection) models it's all bad news for Anthro. This isn't happening now but it's the sort of thing that barely moves until it moves all at once.
As others have mentioned $72b of $80b headline is a non cash (but still relevant) accounting line.
Reuters reported first in September that Anthropic posted a net loss of $42 billion in 2025 and plans to spend $518 billion on cloud, computing and infrastructure obligations in coming years.
$16B revenue and hoping to spend $500B in the coming years.
There is no direction this can head in other than inevitable enshittification and price increases that invariably push the majority of users towards open weight models
Its revenue grew 12-fold year to year, and 50% just last quarter. Last quarter it reached profitability if you exclude convertibles etc. And if you won’t it is still well on track to be profitable this/next year.
It is actually faring much better than other tech startups ipo’ing over the last 20 years.
Very absurd notion given that most economists recognize personal computers and the internet have barely impacted labor productivity and global GDP outside of consumption spending
Embedded and industrial computing however have had a profound impact
> given that most economists recognize personal computers and the internet have barely impacted labor productivity and global GDP outside of consumption
Only that three quarters of the world economy [1]? (The only other component on a global scale is investment.)
Also, the claim is bullshit. In 1987, Solow said his famous bit about seeing computers everywhere but in national productivity statistics. Yet the 1990s saw that growth [2]. Now we’re seeing again [3]. And across that time, global total-factor productivity increased.
There are good arguments against AI increasing productivity to the point that it becomes revenue generating to AI in the near term. Mis-stating the Solow paradox is not one of them.
Could real GDP. Maybe...? I mean people need to dive into the details. How many products/services can be sold...? its not infinite dont be stupid.
Its easy talking about this stuff at a high-level, when you start going into the details you begin to get very uncomfortable. The math right now, simply does not math!
Firms will not wait forever to see what the value of frontier AI is - these scare tactics are wearing off.
Wasn't their previous revenue increase more than twice as big?
That would very much not be great for Anthropic, they need to be accelerating growth to keep valuation, doubly so as interest rates on corporate bonds continue to rise.
“The vast majority of this year's net loss, $72 billion, resulted from accounting charges tied to changes in the value of convertible notes and other instruments the company issued to raise funding, the Journal report said.”
Interesting, would love to know the details of this.
Basically the $72B are updating the value of what their convertible notes would be worth if they IPOed today at their current valuation. It's a non cash expense but it does matter because it dilutes all current shareholders and thus lowers earnings per share.
What we need to see is the statement of cash flows.
Whats happening to that cash balance?
People are missing the point IMO - the reinvestment needs is what matters. A) how large are they? B) How will they change over-time? C) How does a slow down in capabilities and closing of the gap by China + price-competition affect their cash flows from operations net of the reinvestment (e.g. will it draw down their cash balance).
You can only hold the perception of increasing capabilities for so long - humans are very adaptive as we are seeing and scare-tactics do not work forever.
Total loss is about 96 billions, they deduced the top (~16 billions) from the bottom to get the net loss (~80 billions). What is "Other Expenses" here? The article says nothing about that. I am not sure to get this right.
Keep throwing money into the wishing well. This has been, since day one, either a gamble or a complete con, depending on how in touch with reality you are.
just use xhigh setting to support them through this AI winter brrrrr.
they are obviously a con ( opinion). look at last slop report. opus 5.5 gets _worse_ when u put higher attention settings. u get banned for using better harnesses etc. etc.
they could do really well. a lot of avid supporters. But i think if they do not change their tactics then openAI, GLM for those who can run it, or others, might start taking even those (pardon my french) religious fans.
> The loss, up from $13 billion a year earlier, was driven by $72 billion in accounting charges tied to changes in the value of financial instruments Anthropic issued to raise money, the report said, citing a draft prospectus for its IPO.
Does that mean they lost $8bn in actual cash? I'm trying to understand how that matches up to their earlier reported claims that Q2 and Q3 were "profitable".
(Oh wait, this $80bn loss is reported for "the first half" of 2026, so it's not including the supposedly profitable Q3.)
Lots of people really want to convince the public there is a bubble.
Hmmm...
My advice: if you actually want to know the truth of what is going on, get a general understanding of finance and read the actual financial statements/filings and their disclaimers. It's very easy to write articles like this that cherry pick certain numbers out of context to support a specific narrative. Reuters is in the process of liquidating their reputation in the same way that forbes and business insider and many others publications have.
The overwhelming majority of the net loss in the first half of this year, $72 billion, resulted from accounting charges linked to changes in the value of convertible notes and other instruments Anthropic has issued, according to the report.
So this is really just capped notes converting. Total nothing burger.
Trying to be sure I get this straight. This would be convertible notes, which are kind of like bonds that were issued earlier on which get returned as some amount of stock/equity, but that amount can change because the value of the company early on can be pretty uncertain. Right?
So the "loss" happens, because they were issued assuming one company valuation before, but the company is worth a lot more now, so the equity exchange on the conversion is now more "expensive", and thus a loss? But ultimately it just means the earlier investors are getting their equity cheaper than what an equivalent would be worth today, right?
Sounds like not too bad of a problem to have if I'm understanding things right. It implies Anthropic is worth more than expected, so they should have potentially received more money back in the day, but the whole point of those convertible notes is the future value is highly speculative. In the end if that's your problem, its because you're potentially crushing it harder than expected at least from a valuation viewpoint.
Anyone please correct me if I'm wrong. I am not in finance, and am definitely looking to learn and understand more.
I think todays latest models would satisfy most users, so it makes me wonder how soon until we can run it on our machines without having to subscribe and with China handing us freebies? I think they have dug well past the point of profitable returns before that happens, so I can see why big tech companies are scrambling to get into bed with US government more than ever as a backup plan when/if their big gamble fails. And now our corrupt government and its 3 letter agencies, they have bargaining power to use this tech and relax privacy efforts and add more backdoors for "safety and security" whereas in the past it was easier for these companies to say no. A match made in hell that we are all roped into now.
> I think todays latest models would satisfy most users, so it makes me wonder how soon until we can run it on our machines without having to subscribe and with China handing us freebies?
Because of the DRAM shortage, not anytime soon. But if you’re willing to pay for inference somewhere else, Deepseek Flash 4.1 is good enough [1]. It might be going to be extra cheaper soon, too [2].
[1]: https://www.dgt.is/blog/2026-10-07-deepseek-freek-out/
[2]: https://news.ycombinator.com/item?id=50163277
> I think todays latest models would satisfy most users
This reminds me the famous (although unproven) "640K ought to be enough for anybody."
I've been thinking since Opus 4.5 came out, that if I had near unlimited usage of that I could do some immensely interesting things.
If Cerebras burned Opus 4.5 to a chip that I/anyone could buy for $5k, that would be worldchanging.
There are probably cases where it's true though. 4K screens have been declared good enough, computers have come with 16GB of ram for forever now, etc.
It could be less that the current models are good enough forever but that if the prices for proprietary models get too high, people will switch to open or self hosted options. We have not even begun to exhaust the possibilities of the current models.
That quote apocryphal btw. No evidence Gates ever said it. And even if he did, does the fact that it was wrong imply the converse is true? Will everyone always need a better model at ANY cost?
If model development stopped today it would still take decades for the productivity benefits to diffuse through society.
The vast majority of LLM usage probably would pass evals equally well on a smaller model
I see tons of devs fretting about how only Opus is "smart" enough for the React CRUD web app they are building even though Sonnet and Chinese models are demonstrably equivalent for most real world developer use cases
Apple will do it eventually
Apple isn't doing this. Apple is creating experiences, not frontier models.
Infrastructure.
Im sure there was a time nobody thought Apple would design their own CPU's.
Foolish poster.
You misunderstand my comment.
Apple is very good at what they do. They will move mountains and invent new technologies to achieve their goals. But the goal is not the technology itself -- it's the experience.
People complained Macs had underpowered hardware. That's because Apple didn't need overpowered hardware to achieve the experience they wanted. Same for iPhone, and how it still has less memory than Android flagships -- by as much as half in some cases, or even more. But they simply don't need more for the experience. (Though recently they have felt the RAMpocalypse)
I believe the same will happen here, and everywhere. Apple will not release a frontier model just because they can. They won't pull ahead just for the sake of it. But there is a high likelihood that they will create much a better experience, that doesn't need a model to be at the frontier.
Of course, they also make considerably powerful machines now. Pushing your hardware to the limit is a significant experience these days, and Apple sees the market for it. Even if they do not create the next frontier model themselves, we may eventually find one running on Apple hardware anyway.
I also think that it is not just user experience, but developer experience that stands to benefit. Apple's developer experience has been rotting since Jobs died, but I still hold out hope that they will pull through. Call me foolish for that, though, if you must.
The real headlines here: - $450B of non-cancellable cloud commitments over the next 10 years >> the revenue gravy train cannot stop or Anthro is toast.
- 20% of revenue is from just 2 customers >> If their highly concentrated customers get smart and start looking at low cost (meta, grok, google) or open weight (nvidia, inkling, reflection) models it's all bad news for Anthro. This isn't happening now but it's the sort of thing that barely moves until it moves all at once.
As others have mentioned $72b of $80b headline is a non cash (but still relevant) accounting line.
This is a non issue as nvidia would circular finance this thing.
> $450B of non-cancellable cloud commitments over the next 10 years
Where have I heard about this before? Oh right, months ago by Ed Zitron.
Why leave out the time scales? 16.8B revenue for Q3 of 2026 and planning to spend 518B over 10 years (which would average to 13B quarterly)
There is no direction this can head in other than inevitable enshittification and price increases that invariably push the majority of users towards open weight models
Its revenue grew 12-fold year to year, and 50% just last quarter. Last quarter it reached profitability if you exclude convertibles etc. And if you won’t it is still well on track to be profitable this/next year.
It is actually faring much better than other tech startups ipo’ing over the last 20 years.
If revenue continues to increase like this we can expect Anthropic to make up 110% of the world's GDP very very soon (Rubs hand together).
Or world GDP to accelerate.
Very absurd notion given that most economists recognize personal computers and the internet have barely impacted labor productivity and global GDP outside of consumption spending
Embedded and industrial computing however have had a profound impact
> given that most economists recognize personal computers and the internet have barely impacted labor productivity and global GDP outside of consumption
Only that three quarters of the world economy [1]? (The only other component on a global scale is investment.)
Also, the claim is bullshit. In 1987, Solow said his famous bit about seeing computers everywhere but in national productivity statistics. Yet the 1990s saw that growth [2]. Now we’re seeing again [3]. And across that time, global total-factor productivity increased.
There are good arguments against AI increasing productivity to the point that it becomes revenue generating to AI in the near term. Mis-stating the Solow paradox is not one of them.
[1] https://data.worldbank.org/indicator/NE.CON.TOTL.ZS?end=2025...
[2] https://direct.mit.edu/rest/article-abstract/85/4/793/57428/...
[3] https://en.wikipedia.org/wiki/Productivity_paradox
Not disagreeing with you just curious if you can cite sources for my own research.
Correct nominal GDP will barely move.
Could real GDP. Maybe...? I mean people need to dive into the details. How many products/services can be sold...? its not infinite dont be stupid.
Its easy talking about this stuff at a high-level, when you start going into the details you begin to get very uncomfortable. The math right now, simply does not math!
Firms will not wait forever to see what the value of frontier AI is - these scare tactics are wearing off.
It reached profitability if you exclude all costs (so it isn’t profitable lmao)
I thought all of this machine learning business was about minimizing the loss.
"Anthropic's third-quarter revenue rose 45% to $16.8 billion"
This is great for Anthropic, but who is increasing their AI spending in this climate?
Wasn't their previous revenue increase more than twice as big?
That would very much not be great for Anthropic, they need to be accelerating growth to keep valuation, doubly so as interest rates on corporate bonds continue to rise.
It’s actually not great, that’s a slowdown
The biggest issue is concentration risk.
The corporate partners, who are also often investors, and have an interest in ensuring the world sees genAI as utterly required.
Microsoft, SK Group, Meta, Google, Oracle, etc.
I dont know, with the exception of SK, all these companies have announced reduced AI budgets and/or move to own inference.
Maybe they did it like SpaceX and sold their compute to a competitor and are booking that as sales.
The loss without accounting adjustments was $8.7 billion for H1.
The other $72 billion was non-cash adjustment.
Revenue was $16.3 billion for H1 2026, up from $1.1 billion for H1 2025.
Not actually that bad.
“The vast majority of this year's net loss, $72 billion, resulted from accounting charges tied to changes in the value of convertible notes and other instruments the company issued to raise funding, the Journal report said.”
Interesting, would love to know the details of this.
Basically the $72B are updating the value of what their convertible notes would be worth if they IPOed today at their current valuation. It's a non cash expense but it does matter because it dilutes all current shareholders and thus lowers earnings per share.
yes it affects book equity
What we need to see is the statement of cash flows.
Whats happening to that cash balance?
People are missing the point IMO - the reinvestment needs is what matters. A) how large are they? B) How will they change over-time? C) How does a slow down in capabilities and closing of the gap by China + price-competition affect their cash flows from operations net of the reinvestment (e.g. will it draw down their cash balance).
You can only hold the perception of increasing capabilities for so long - humans are very adaptive as we are seeing and scare-tactics do not work forever.
This is from the article by the wall street journal:
https://imgur.com/a/XRPOXLa
Total loss is about 96 billions, they deduced the top (~16 billions) from the bottom to get the net loss (~80 billions). What is "Other Expenses" here? The article says nothing about that. I am not sure to get this right.
And 5% of that loss is dedicated for the 'public good'
Keep throwing money into the wishing well. This has been, since day one, either a gamble or a complete con, depending on how in touch with reality you are.
It can be two things!
if the gamble is also con, it collapses to being just a con
just use xhigh setting to support them through this AI winter brrrrr.
they are obviously a con ( opinion). look at last slop report. opus 5.5 gets _worse_ when u put higher attention settings. u get banned for using better harnesses etc. etc.
they could do really well. a lot of avid supporters. But i think if they do not change their tactics then openAI, GLM for those who can run it, or others, might start taking even those (pardon my french) religious fans.
Fable 5.5 better be incredible.
Probably stocks based compensation or something like that.
> The loss, up from $13 billion a year earlier, was driven by $72 billion in accounting charges tied to changes in the value of financial instruments Anthropic issued to raise money, the report said, citing a draft prospectus for its IPO.
Does that mean they lost $8bn in actual cash? I'm trying to understand how that matches up to their earlier reported claims that Q2 and Q3 were "profitable".
(Oh wait, this $80bn loss is reported for "the first half" of 2026, so it's not including the supposedly profitable Q3.)
Lots of people really want to convince the public there is a bubble.
Hmmm...
My advice: if you actually want to know the truth of what is going on, get a general understanding of finance and read the actual financial statements/filings and their disclaimers. It's very easy to write articles like this that cherry pick certain numbers out of context to support a specific narrative. Reuters is in the process of liquidating their reputation in the same way that forbes and business insider and many others publications have.
Do you have evidence that Reuters is misleading? Please prove it, otherwise this is just hearsay
How are you going to find trustworthy financial statements of a company that's private and can cherry pick what they release?
its not a public company, there's no s1 or 10q to read
Terrible post.
From Bloomberg:
The overwhelming majority of the net loss in the first half of this year, $72 billion, resulted from accounting charges linked to changes in the value of convertible notes and other instruments Anthropic has issued, according to the report.
So this is really just capped notes converting. Total nothing burger.
Trying to be sure I get this straight. This would be convertible notes, which are kind of like bonds that were issued earlier on which get returned as some amount of stock/equity, but that amount can change because the value of the company early on can be pretty uncertain. Right?
So the "loss" happens, because they were issued assuming one company valuation before, but the company is worth a lot more now, so the equity exchange on the conversion is now more "expensive", and thus a loss? But ultimately it just means the earlier investors are getting their equity cheaper than what an equivalent would be worth today, right?
Sounds like not too bad of a problem to have if I'm understanding things right. It implies Anthropic is worth more than expected, so they should have potentially received more money back in the day, but the whole point of those convertible notes is the future value is highly speculative. In the end if that's your problem, its because you're potentially crushing it harder than expected at least from a valuation viewpoint.
Anyone please correct me if I'm wrong. I am not in finance, and am definitely looking to learn and understand more.
[dead]
lol
Anyone can lose a $1, it takes something special to drop $80B.
Important to note that $72bn of that loss is some accounting thing and not really relevant wrt. the solvency of Anthropic