6 ms·

What is going on? Why are everyone except OpenAI short on compute? Even Chinese ultra cheap providers are slowly reducing token plans or increasing prices.

cedws 16d ago
I doubt it’s compute, Anthropic just bought a huge amount of capacity from xAI. I mean SpaceX. No, I mean SpaceXAI. They’re trying to stop bleeding cash.
- tcp_handshaker 16d ago
  That data center was setup wrongly, is broken and unusable for training. Its amazing Musk manages to fool even Anthropic.
  - skeledrew 16d ago
    Amazing that Anthropic is using this "broken and unusable" data center successfully, pushing new models and providing sufficient inference that we no longer have the absurd limits from the weeks leading up to them making that deal.
gmerc 17d ago
Everyone has been running promotions and, gosh, demand is up.
csomar 16d ago
It’s not clear how much each token costs and how much it’s being subsidized. It was never meant to last, at some point the music was going to stop and you have to pay full price.
- anthonypasq 16d ago
  api pricing has 80+% margin.
dgellow 16d ago
Anthropic will IPO soon and need to show good numbers. Everything happening in the next weeks/months is about that. The others are trying to reduce their costs, you have to understand that nobody has a moat, and nobody is profitable. While at the same time the cost of energy and hardware is going up.
- jimmont 12d ago
  This explains all the things that are happening now and will happen in the performance changes, this is just the beginning. The reduced quality yields more retries and use of other models and all the outcomes and products yielding more token use. It's the road show now and metrics must show a trend for liquidity and perceived market performance if they want the exits to work. Anthropic and OpenAI apparently are 48% of Google Cloud revenue alone so if this doesn't work out in the window of time that any liquidity in the markets remains, it doesn't work out so well. And the product performance is just a footnote when the differentiation is shrinking by the week and it's the end of the road that isn't going to make it to where it must go (apparently we're told it's 2028, if that works out I'd love to know why and how). It'll be an interesting 2027, maybe Q4 as well. I don't know any time in history that a massive compute buildout wasn't massively depreciating at year 3 and dominance never lasted much past 10 years—and we appear to be at year 3 now if my read is correct.

cedws 16d ago

I doubt it’s compute, Anthropic just bought a huge amount of capacity from xAI. I mean SpaceX. No, I mean SpaceXAI. They’re trying to stop bleeding cash.

tcp_handshaker 16d ago
That data center was setup wrongly, is broken and unusable for training. Its amazing Musk manages to fool even Anthropic.
- skeledrew 16d ago
  Amazing that Anthropic is using this "broken and unusable" data center successfully, pushing new models and providing sufficient inference that we no longer have the absurd limits from the weeks leading up to them making that deal.

gmerc 17d ago

Everyone has been running promotions and, gosh, demand is up.

csomar 16d ago

It’s not clear how much each token costs and how much it’s being subsidized. It was never meant to last, at some point the music was going to stop and you have to pay full price.

anthonypasq 16d ago
api pricing has 80+% margin.

dgellow 16d ago

Anthropic will IPO soon and need to show good numbers. Everything happening in the next weeks/months is about that. The others are trying to reduce their costs, you have to understand that nobody has a moat, and nobody is profitable. While at the same time the cost of energy and hardware is going up.

jimmont 12d ago
This explains all the things that are happening now and will happen in the performance changes, this is just the beginning. The reduced quality yields more retries and use of other models and all the outcomes and products yielding more token use. It's the road show now and metrics must show a trend for liquidity and perceived market performance if they want the exits to work. Anthropic and OpenAI apparently are 48% of Google Cloud revenue alone so if this doesn't work out in the window of time that any liquidity in the markets remains, it doesn't work out so well. And the product performance is just a footnote when the differentiation is shrinking by the week and it's the end of the road that isn't going to make it to where it must go (apparently we're told it's 2028, if that works out I'd love to know why and how). It'll be an interesting 2027, maybe Q4 as well. I don't know any time in history that a massive compute buildout wasn't massively depreciating at year 3 and dominance never lasted much past 10 years—and we appear to be at year 3 now if my read is correct.