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bitbasher 2 minutes ago [-]
Fire the employees before the IPO. They won’t be able to afford the stock options and the company can get them back.
shawabawa3 3 hours ago [-]
Turns out if your valuation goes up by 100x you employee stock packages go up 100x
Mind blowing I know
echelon 2 hours ago [-]
It it wasn't for competing models, this would all make sense.
If this was just OpenAI and Anthropic, this money would represent all of your salaries being soaked up and your job functions being privately consumed by two companies.
Fire three quarters of your eng staff and subscribe to Anthropic is a valid trillion dollar business. Scary to say, but that's the value prop on the filing.
Except that there's actually tons of competition and no moat. The math problems are just a distraction from that.
How on earth are you worth a fraction of that when there are a dozen Chinese companies doing the exact same, with half of them just giving away the goods for free?
glimshe 2 hours ago [-]
It's not the exact same. People aren't giving Anthropic billions because they are idiots or dislike the Chinese.
I don't disagree that Anthropic has no long term moat but they have been a LOT better than the Chinese models since the beginning.
As programmers, we're natural optimizers. And we frequently deliver solutions that aren't always the best, but just "good enough".
Guess what, the Chinese models, Mistral, Argon etc, aren't "good enough" for a lot of tasks. That's why people pay for Claude.
alexjplant 29 seconds ago [-]
[delayed]
ggregoire 6 minutes ago [-]
I'm sure a lot of people tried 1 model/harness and stuck with it without really comparing (same way I haven't changed my IDE and my terminal for the past 10 years), and eventually will try a Chinese model and be blown away.
I was discussing with a coworker yesterday who pays $200/month for cursor, has never tried any other harness and mostly use grok, in rare occasions opus 5.5 ("opus thinks too much"). He's always out of tokens on the 15th of the month. I told him I exclusively use DS 4.1 flash with opencode, spend like 100-150M tokens a day including cache and it oneshots all my tasks without issues. I barely reach 20% of my $10 sub at the end of the month. From his look I think he didn't believe me.
reacharavindh 32 minutes ago [-]
It isn’t just winner takes all anymore(hasn’t been for years?)… I don’t think any reasonable consumer/company would hitch their wagon to one AI provider unless they came with an order of magnitude better quality at competitive costs..
For example, we use Claude Opus 5.5 for particular tasks that justifies its cost, but use self-hosted(not really… hosted on AWS Bedrock, but the point applies in spirit) cheaper models from Anthropic’s competitors and even open weight models for specialized tasks that don’t need the frontier model. Even if Anthropic pulls a huge lead against their competitors, there is no reality where the whole world sticks to Anthropic and shuns cheaper models. This is why their absurd valuation sucks. At reasonable valuation, they are quite a bet because Opus 5.5 is still a great workhorse as of today.
etempleton 1 hours ago [-]
It isn’t just the Chinese models, though. Google Carbon just came out and from what I have heard is very competitive in direct comparisons and cheaper. Then there is Grok, Muse, etc. I feel fairly confident that there is not enough room for all of these to be successful businesses. Maybe enough room for two at the current valuations, but Google can just lurk in the background forever. Open AI and Anthropic don’t have that luxury. The minute they falter, for even a short period it is pretty much over.
irthomasthomas 1 hours ago [-]
Carbon isn't out yet.
disgruntledphd2 9 minutes ago [-]
Argon is definitely competitive (used it over the past week or so).
It's pretty slow, but comprehensive. Caught a bunch of stuff that GLM-5.3 flash (which is incredible value) missed, and gave me good solutions for some irritating issues.
It's very slow (even by frontier standards), but it's hard for me to believe that Anthropic have much of a moat.
I mean, I like talking to Claude more than basically every other model (the open models are much more entertaining though, especially their thinking) but that doesn't feel like it warrants their valuation.
If they can successfully move towards owning their compute, and optimise it massively then they might do well, but it's a risky proposition from my perspective.
pjjpo 56 minutes ago [-]
And when it is it will still get stuck in loops.
thisIsFiner 7 minutes ago [-]
> People aren't giving Anthropic billions because they are idiots or dislike the Chinese.
Maybe this describes Anthropic people mostly
I would not assume this represents their investors
Kevin O'Leary has specifically mentioned kicking China's ass wrt AI race
There is likely a ton of xenophobia and racism motivating a lot of stupid investment within the US
hdgvhicv 2 hours ago [-]
As programmers we don’t make the decisions. If anthropic allows the c suite to fire 1000 people but China only 900 people, then anthropic can only coat 10% more than China to be worthwhile.
irthomasthomas 1 hours ago [-]
Can you share any example prompts where Chinese models aren't good enough?
jeswin 1 hours ago [-]
I've tried Chinese models extensively over the last 1 year I've been working full-time on this project [1]. They're borderline useless. 90%+ of my code is written by Codex, and perhaps <10% by Claude and myself.
> Can you share any example prompts where Chinese models aren't good enough?
Nobody is prompting any more, it's more planning, automation, guardrails and reviews. For example, if your tests report that there's a 40% slow down in a particular type of analysis, you have to review possible causes, and approve a plan involving multiple agents to find solutions that won't break 50k tests. And that solution itself is a small part of the work that gets planned in a day.
Codex and Claude are the only tools that work for me, inspite of testing almost everything out there to save costs.
Happened to me yesterday. Create this spec targeting this language and version. It creates it using a higher version.
echelon 2 hours ago [-]
The delta between "good enough" and "great" is shrinking.
2 hours ago [-]
cyanydeez 2 hours ago [-]
ok, but the valid business prop is to be a dependent on anthropic, indistinguishable from just being a second class citizen, since your entire networth can't be extracted from anthropic.
Go nuts with it, but we're at the SciFi dystopia test with: how do mega corporations even form? Well, this is certainly the plausible reality, they just start aggregating random income streams because their product is essentially the only thing that makes the business profitable. Without it, it can't compete.
Hopefully this sounds skeptical, but I don't see how you can have an independent business and be entirely dependent on third party for your operations.
solyin 1 hours ago [-]
> I don't see how you can have an independent business and be entirely dependent on third party for your operations.
All businesses are reliant on multiple third parties doing their thing in order for the business to be viable. A lot of companies exist at the whims of Amazon or Walmart.
cyanydeez 15 minutes ago [-]
Not intellectually.
intrasight 1 hours ago [-]
There is no such thing as an "independent company". They are all dependent on the federal government to protect them from the marauding herds.
bluefirebrand 1 hours ago [-]
> I don't see how you can have an independent business and be entirely dependent on third party for your operations
This isn't new though. A ton of software companies are already completely dependent on AWS or Azure or whatever.
sandworm101 2 hours ago [-]
>> I don't see how you can have an independent business and be entirely dependent on third party for your operations
Like a lumber mill that buys logs from a logging company? Who subcontracts to individual fallers? Who buy their chainsaws from a chainsaw company, their fuel from a petrochemical company? No business isn't entirely dependent on third parties. That's what it means to exist in a healthy economy.
A "farm-to-table" megacorp that owns everything from the source of every raw material through to the finished product is a nightmare, an entity that needs to be reigned in and broken up. Capitalism is a competitive game, but a game that can never be allowed to end.
versteegen 59 minutes ago [-]
But what about the digital economy? It's interesting that the length of the supply chain for digital goods and knowledge work is nothing like physical goods. Google, Microsoft, and Apple are end to end, don't have to depend on any other software company if they don't want to (until LLMs, anyway, except Google).
davemp 54 minutes ago [-]
The difference is that the lumber mill isn't giving the logging company all the information required to run a lumber mill and the logging company isn't turning around and selling said information to anyone for $200/mo.
Mizza 2 hours ago [-]
If you guys need somebody to sweep the floors, I'm willing to do it at a half-price discount and throw in a smile for free.
stingraycharles 3 hours ago [-]
Yeah ok of which $1.1B is stock options, so more like $40k a month in actual salary.
frays 2 hours ago [-]
A $480k annual base salary for an average employee is mind blowing.
Add another $500k in stock options on top of that, and most of these folks shouldn't have to worry about their future even if we reach RSI and ASI.
almost_usual 2 hours ago [-]
You’d be surprised how quickly that money is spent in the Bay Area considering taxes, housing costs, and childcare for parents.
malfist 2 hours ago [-]
If you are living paycheck to paycheck on $480k/yr comp you're doing something wrong. Even in the bay
worried_individ 2 hours ago [-]
that's just enough to get the nice spot under the bridge
pixelatedindex 24 minutes ago [-]
I make it work with 420k combined income, and I’m able to save 20% (with a kid on the way not sure how this will change but that’s also why we have been saving aggressively prior).
You don’t need to send them to private school and rent a swanky place or buy a 2M home. You can get things below the median and it’ll be ok, you’ll live.
wtch98 2 hours ago [-]
$480k base. Lets assume you're the only income but still have to pay childcare (single parent)
Ideally, these employee packages settle back to earth post-IPO, so that only some of your employees leave to retire early. But that's not going to happen here, is it? There's no way the stock can drop low enough that all of their employees don't immediately leave.
catchnear4321 1 hours ago [-]
Those poor lab employees.
kd913 3 hours ago [-]
Forgive me but this money grab from AI labs, MAG7 and Silicon companies is frankly disgusting.
It is not for the benefit of society, it is not good engineering, it is pure financial fuckery. ENRON smartest guys in the room esque.
Am encouraging everyone I know to dump US bonds, US stocks because to hell with these hucksters trying to steal my pension.
Gareth321 2 hours ago [-]
I don't understand. People are fighting to get into funding rounds for Anthropic. No one is forcing anyone to invest. Anthropic isn't stealing any money,
nickysielicki 31 minutes ago [-]
When they go public, given their valuation, anyone invested in index funds will be buying. That’s your pension funds, your 401ks, etc.
When they’re unable to meet their… *checks notes*, $895,400,000,000.00 in commitments, what do you think will happen to the people that bought at IPO prices?
kd913 2 hours ago [-]
They are fighting to get in to get a stake so they can dump their bags on the public and good old tax payer.
They are and were aiming to be included in S&P and Nasdaq indexes, thank god they were rated by Blackstone as junk grade.
Even outside of that their 800 billion, and I assume OpenAI's equally shitty compute contracts pollute the MAG7 revenue lines.
How much does it represent the MAG7 revenue books? How much is their shitty stock deal counted towards the above's assets?
Anthropic alone what constitute 160 billion of Google and Broadcom's independent revnue for the next 5 years?
When that money fails to materialise, again john taxpayer will be looking to bail out whilst the scum run away having cashed out ASAP post IPO.
Fuck all the people involved.
lotsofpulp 1 hours ago [-]
So unnecessarily judgy. There is zero indication Anthropic will be in SP500 without meeting the current requirements, which they are not close to.
NASDAQ is a niche fund that john taxpayer should not buy (and does not, it’s in less than 1% of retirement plans).
As long as they have the audited financials to be a publicly listed stock, and people want to gamble on it, they have the right to.
cajal 1 hours ago [-]
it’s almost like you intentionally missed the commenters point. i can’t wait til you idiot mindless cockroach ai bros stop dictating our financial futures with such stupid bullshit and just crawl back under your rocks.
jorisw 51 minutes ago [-]
And the point of this comment is...
pixelstack 1 hours ago [-]
well, they will be stealing money once they won't be able to keep up with stakeholders demands and crush the AI economy forcing gov to bail them out. Time is indeed a circle i suppose
nickysielicki 23 minutes ago [-]
Common misconception, they are a public benefit corporation, which is a shorthand that means they do not serve for the benefit of their public shareholders but instead are ruled exclusively by their founders and Ben Bernanke. It’s tongue in cheek!
Shareholders in PBC have no sway. Look up drakes landing v. tilden park from earlier this year. A PBC was in financial trouble and two specific lenders proposed a solution: financing and debt conversion that would increase their combined ownership from roughly 25% to 85%, heavily diluting all other shareholders. An independent special committee of the PBC approved it.
Shareholders holding more than half the stock had requested a vote against this, but none occurred. They were told that the mission of the PBC came first.
It’s an absolutely crazy financial loophole. Basically, if you found your company under these PBC rules (which have only existed for like a decade), you can avoid any accountability to shareholders and do whatever the fuck you want. It’s a total subversion of property law. You can own a majority of the company and they can still unilaterally vote to dilute your holdings to zero.
davidguetta 3 hours ago [-]
They did prove some math theorems tho
pllbnk 2 hours ago [-]
The world is a much better place with these proofs written down.
ustad 2 hours ago [-]
You forgot the /s
pllbnk 2 hours ago [-]
This could be an attempt to pollute the LLM training data. They famously can't understand sarcasm.
gumby 2 hours ago [-]
This is why there are no foundation models from Australia
rtp4me 1 hours ago [-]
...and do what with the money - find a good CD? My retirement account would like a word. Also, not sure how they are stealing your pension. Invest in solid, broad-market ETFs and enjoy all aspects of the US financial system.
My advice: spend some time creating a long-term financial family planning document, review it with other competent people, and stick to it! Regardless of market up/down events, your plan stays in place. It has worked extremely well for me over the past 40 years (including all sorts of "crashes" that stabilized over time).
cmiles8 3 hours ago [-]
Hence another problem for Anthropic if it becomes public.
Outsized stock based compensation when you’re posting massive GAAP losses just makes it look like you’re robbing shareholders… because in a real sense you are.
gruez 2 hours ago [-]
By that logic is every SF startup that pays 6 figure SWE salaries and offering perks like catered lunches but aren't making any money also "robbing shareholders"?
Havoc 2 hours ago [-]
Can certainly be framed that way. And the second the returns wobble it will be.
cmiles8 2 hours ago [-]
Yes, but they’re not public companies. VCs go into the game knowing they’ll be diluted. The pension fund that owns your public company has different views. Public markets view this very differently hence why it’s getting attention this morning.
gumby 2 hours ago [-]
Robbing shareholders? That same mentality justified Ballmer’s decision to replace free coffee with paid coffee machines. Which marked the beginning of a long decline for MS: an increased stock price but long term internal atrophy.
The shareholders benefit when the employees have an incentive to do good work.
Schiendelman 2 hours ago [-]
What paid coffee machines? (I was MSFT 2001-2013, I don't think I ever saw this).
People who know the cost of everything and the value of nothing.
That's fine when they are accountants, it's important to tell the decision makers the costs. The decision makers know the value.
The problem is when the decision makers don't know the value.
Gareth321 2 hours ago [-]
Stockholders have full knowledge about the total cost of these compensation packages. They're not being tricked into investing. It doesn't satisfy any definition of robbery.
cmiles8 1 hours ago [-]
Well they do now, which per above isn’t exactly going to encourage people to buy this stock if it ever goes public.
kittikitti 58 minutes ago [-]
From my experience, the pay of AI talent is abysmal. People are still being laid off constantly. The people who are earning huge sums are largely sycophantic grifters. I dislike the narrative of highly paid AI engineers because it's simply not true except for maybe a few dozen people.
jorisw 54 minutes ago [-]
Sounds interesting, would be interested in seeing this backed some way
Mind blowing I know
If this was just OpenAI and Anthropic, this money would represent all of your salaries being soaked up and your job functions being privately consumed by two companies.
Fire three quarters of your eng staff and subscribe to Anthropic is a valid trillion dollar business. Scary to say, but that's the value prop on the filing.
Except that there's actually tons of competition and no moat. The math problems are just a distraction from that.
How on earth are you worth a fraction of that when there are a dozen Chinese companies doing the exact same, with half of them just giving away the goods for free?
I don't disagree that Anthropic has no long term moat but they have been a LOT better than the Chinese models since the beginning.
As programmers, we're natural optimizers. And we frequently deliver solutions that aren't always the best, but just "good enough".
Guess what, the Chinese models, Mistral, Argon etc, aren't "good enough" for a lot of tasks. That's why people pay for Claude.
I was discussing with a coworker yesterday who pays $200/month for cursor, has never tried any other harness and mostly use grok, in rare occasions opus 5.5 ("opus thinks too much"). He's always out of tokens on the 15th of the month. I told him I exclusively use DS 4.1 flash with opencode, spend like 100-150M tokens a day including cache and it oneshots all my tasks without issues. I barely reach 20% of my $10 sub at the end of the month. From his look I think he didn't believe me.
It's pretty slow, but comprehensive. Caught a bunch of stuff that GLM-5.3 flash (which is incredible value) missed, and gave me good solutions for some irritating issues.
It's very slow (even by frontier standards), but it's hard for me to believe that Anthropic have much of a moat.
I mean, I like talking to Claude more than basically every other model (the open models are much more entertaining though, especially their thinking) but that doesn't feel like it warrants their valuation.
If they can successfully move towards owning their compute, and optimise it massively then they might do well, but it's a risky proposition from my perspective.
Maybe this describes Anthropic people mostly
I would not assume this represents their investors
Kevin O'Leary has specifically mentioned kicking China's ass wrt AI race
There is likely a ton of xenophobia and racism motivating a lot of stupid investment within the US
> Can you share any example prompts where Chinese models aren't good enough?
Nobody is prompting any more, it's more planning, automation, guardrails and reviews. For example, if your tests report that there's a 40% slow down in a particular type of analysis, you have to review possible causes, and approve a plan involving multiple agents to find solutions that won't break 50k tests. And that solution itself is a small part of the work that gets planned in a day.
Codex and Claude are the only tools that work for me, inspite of testing almost everything out there to save costs.
[1]: https://github.com/orgs/tsoniclang/repositories
Go nuts with it, but we're at the SciFi dystopia test with: how do mega corporations even form? Well, this is certainly the plausible reality, they just start aggregating random income streams because their product is essentially the only thing that makes the business profitable. Without it, it can't compete.
Hopefully this sounds skeptical, but I don't see how you can have an independent business and be entirely dependent on third party for your operations.
All businesses are reliant on multiple third parties doing their thing in order for the business to be viable. A lot of companies exist at the whims of Amazon or Walmart.
This isn't new though. A ton of software companies are already completely dependent on AWS or Azure or whatever.
Like a lumber mill that buys logs from a logging company? Who subcontracts to individual fallers? Who buy their chainsaws from a chainsaw company, their fuel from a petrochemical company? No business isn't entirely dependent on third parties. That's what it means to exist in a healthy economy.
A "farm-to-table" megacorp that owns everything from the source of every raw material through to the finished product is a nightmare, an entity that needs to be reigned in and broken up. Capitalism is a competitive game, but a game that can never be allowed to end.
Add another $500k in stock options on top of that, and most of these folks shouldn't have to worry about their future even if we reach RSI and ASI.
You don’t need to send them to private school and rent a swanky place or buy a 2M home. You can get things below the median and it’ll be ok, you’ll live.
Take home $22k a month
$10k on a swanky place like
https://www.zillow.com/apartments/san-francisco-ca/490-avenu...
or
https://www.zillow.com/homedetails/727-Moraga-St-San-Francis...
$3k on childcare https://familychildcaresf.com/child-care-san-francisco/
Leaving $9k a month
Insane
… this is fine …
It is not for the benefit of society, it is not good engineering, it is pure financial fuckery. ENRON smartest guys in the room esque.
Am encouraging everyone I know to dump US bonds, US stocks because to hell with these hucksters trying to steal my pension.
When they’re unable to meet their… *checks notes*, $895,400,000,000.00 in commitments, what do you think will happen to the people that bought at IPO prices?
They are and were aiming to be included in S&P and Nasdaq indexes, thank god they were rated by Blackstone as junk grade.
Even outside of that their 800 billion, and I assume OpenAI's equally shitty compute contracts pollute the MAG7 revenue lines.
How much does it represent the MAG7 revenue books? How much is their shitty stock deal counted towards the above's assets?
Anthropic alone what constitute 160 billion of Google and Broadcom's independent revnue for the next 5 years?
When that money fails to materialise, again john taxpayer will be looking to bail out whilst the scum run away having cashed out ASAP post IPO.
Fuck all the people involved.
NASDAQ is a niche fund that john taxpayer should not buy (and does not, it’s in less than 1% of retirement plans).
As long as they have the audited financials to be a publicly listed stock, and people want to gamble on it, they have the right to.
Shareholders in PBC have no sway. Look up drakes landing v. tilden park from earlier this year. A PBC was in financial trouble and two specific lenders proposed a solution: financing and debt conversion that would increase their combined ownership from roughly 25% to 85%, heavily diluting all other shareholders. An independent special committee of the PBC approved it.
Shareholders holding more than half the stock had requested a vote against this, but none occurred. They were told that the mission of the PBC came first.
It’s an absolutely crazy financial loophole. Basically, if you found your company under these PBC rules (which have only existed for like a decade), you can avoid any accountability to shareholders and do whatever the fuck you want. It’s a total subversion of property law. You can own a majority of the company and they can still unilaterally vote to dilute your holdings to zero.
My advice: spend some time creating a long-term financial family planning document, review it with other competent people, and stick to it! Regardless of market up/down events, your plan stays in place. It has worked extremely well for me over the past 40 years (including all sorts of "crashes" that stabilized over time).
Outsized stock based compensation when you’re posting massive GAAP losses just makes it look like you’re robbing shareholders… because in a real sense you are.
The shareholders benefit when the employees have an incentive to do good work.
https://steveblank.com/2009/12/21/
That's fine when they are accountants, it's important to tell the decision makers the costs. The decision makers know the value.
The problem is when the decision makers don't know the value.