On Thursday, a massive sell off wiped out a record $2.3 trillion in market value, highlighting major volatility and uncertainty.
Oh no, they lost a bunch of pretend speculation value that wasn't based on reality!
Fuck the stock market.
You're going to find out just how real stock market money is when the AI bubble implodes.
Buffett Index: total stock valuation vs. GDP
1929: 130%
2007: 130%
2025: 220%
Oh no, they lost a bunch of pretend speculation value that wasn’t based on reality!
The problem is that the pretended value will likely be paid from people's pensions savings.
$3.50, final offer. You could bribe me with a good sandwich though too i suppose.
Sandwich-heavy portfolio made the hungry investor happy.
But it has to be like a reeeeaaally good sandwich
$3.50? Done!
Congratulations, you now owe $80 billion.
I think you're 5x too low. $400b in non-cancellable contracts.
Ooh, it must've been about seven, eight years ago. Me and the little lady was out on this boat, you see, all alone at night, when all of a sudden this huge creature, this giant crustacean from the paleolithic era, comes out of the water and I yelled. I said, "What do you want from us, monster?!" And the monster bent down and said, "...Uh I need about tree-fitty."
As "low" as 1.1T
I guess thats priming in effect? My guess is original target was 1T, so they primed public with 2T...
If they are 80 billion in the hole shouldn't the valuation be negative 80 billion?
If they stopped now yeah, but those are rookie numbers. They’re gonna evaporate way more money than that before they finally crash and burn.
No, you have to consider future valuation. They just need to run a loss for as long as it takes to eliminate their competition (humans maintaining independent thought and learning capability) at which point they can extract whatever price they want.
On one hand you need to consider future growth so the value is high because growth is high.
On the other hand the path to profitability is going to be brutal as they need to compete with Chinese models which are often on par or sometimes better (kling v suno) than the yank models. Often the Chinese models are open source too so that helps consumers, competitors and self hosters.
On the other other hand the us government could just outlaw competition in the us market and create a regional monopoly/ oligopoly for whichever companies it wants.
On the other other other hand (I am an octopus, please don't turn me into calamari, I have a family and friends) early movers in new industries are rarely the ones who make it big. If you invested in MySpace or AOL having seen a vision from the future where social media took over the internet you would be both correct and broke.
TLDR: traditional financial modeling has been thrown out the window years ago for tech companies. SpaceX is basically guaranteed to lose money for IPO buyers if you account for the time value of money. https://futurism.com/space/math-spacex-ipo-virtually-impossible
Anthropic is worth ~$150billion.
That's how much they hold in tangible assets.
Minus debt.....
So negative 50 billion overall then.
I think it’s negative 80 billion, lmao
Classical method: what do they own, what do they owe, and how much did they earn in the last ten years. Then you have a realistic base number for an IPO.
I know they paid a lot for it but I wonder how much of that infrastructure is really worth if no one wants to buy it
when they go under I'll pay 25¢ per GB on DDR4 ram and 35¢ per GB on DDR5.
hell, I'll even pay up to $3.50 for some of those RTX thingamajigs they got.
My son is already drooling at the prospect of getting his hands on some of their RAM.
Hate to break it to you (or your son), but the kind pf RAM theyve got in that datacenter is not compatible with your son’s computer.
It’s essentially worthless for any purpose other than the type of GPUs they put in a LLM data center. That’s part of why their business is so dumb.
The reason RAM prices have skyrocketed is because the limited number of RAM fabrication facilities have mostly converted their setup to produce the type of RAM that only works for slop instead of the consumer grade stuff.
So your son and I are both gonna need to wait for those RAM fabrication facilities to realize that the people ordering years worth of their work don’t actually have the money to pay for their order. At that point they will likely convert the fabrication facilities back to normal RAM production, and a couple of years after thar happens RAM prices will begin to approach sensible levels again.
I am very excited to buy some of the large HDDs currently being hoarded by the slop mongers when they soon eat shit tho… I’ma build me a fat RAID.
Also, the system designs in general expect more power than a residential circuit can provide, some more than an EVSE circuit. So folks imagining buying a system that does have the memory are also going to be disappointed.
The storage is the most likely to come over, with the caveat of some awkward EDSSF form factor, but enclosures I could see becoming available with a big enough opportunity. E1.L might be the trickiest, but those aren't too popular in the datacenters either.
Keep in mind that most of the hardware will be obsolete in 3-5. That's a quickly depreciating asset.
Also, a lot of the hardware they built is specialized for AI server. None of it will be useful to consumers, so they can't easily pawn it off
I hope this lack of confidence in AI spreads to openAI too.
It only needs one domino to fall. OpenAI will be toast when Anthropic's IPO fails.
If it crashes before they even get to IPO, who are the investors I get to point and laugh at?
It's pretty much all your least-favorite financial entities. You've got the megacorp tech firms (Google, Amazon, et al), venture capitol investment institutions (Goldman Sacs, etc), and even some sovereign wealth funds (Qatar, Saudi Arabia primarily).
It's a real who's who of institutions that should fuck off and die.
Have they tried the classical method of adding up what they actually own and what they owe to others, and then factor in what they have earned in the last ten years? That would give a clear and fair evaluation of the company for an IPO.
That's not how any IPO works.
There was, once upon a time, some limit to the market valuation of a company that approximated the most money they could earn if they came to dominate their entire market, times the inverse of the rate of return for highly secure (like AAA) bonds.
Now speculation assumes that companies will grow to exceed the size of their whole industry, perhaps in the near future, and returns from highly secure investments were really low post covid (resulting in pretty much a 40x valuation multiplier), which has just... held on since then.
It's weird, and I don't like it. Why should a company ever be worth more than all the money it could ever make?
Because it's a grift
You think this is bad, the guys at OpenAI probably realized they are cooked! IPO is a way to cash out and flee to Argentina, instead they might walk face first into a combine harvester that is the remnants of the AI market. Poor Atlman can sell some RAM.
It's not cratering, the value is still a positive number. Call me when the IPO is valued at something with a minus sign before.
People should get paid to take part of this IPO, not the other way.
~~Some investors are now weighing bids that would value Anthropic as low as $1.1 trillion.~~
Some deluded morons who want to hold the bag whilst paying out the con artists who have pumped this bullshit technology with circular financing value Anthropic at, my life savings
Um, good? The IPO was way overvalued and filing at this time was seen as a desperation move, much like the way Anthropic is trying really hard now to create an agentic model that can commit major crimes and cause large industrial disasters (which it will do by command, maybe by a poorly-written prompt, much less, gaining self awareness and escaping containment permanently).
Anthropic is behaving conspicuously like Enron did before it went bankrupt: It's getting more and more desperate as it borrows more and more, and continues to hemorrhage funds. It's now resorting to shenanigans to keep investor confidence up, and those shenanigans will get more and more extreme (and more and more dangerous) until that investor confidence bottoms out and everyone sells.
If we look at Elon Musk's holdings (Musk is a compulsory liar) we see that investors are gullible, though maybe they're just gambling that other investors are more gullible than they. That's always a high-risk wager.
The stock was rated as junk also.
I love how you can go to IPO showing financial proof that your business is utter unsustainable and even if that changes would take considerable time to dig out of...
took me a second to remember where I remembered him from 🤣
oh noooes we arent going to make the fake number we set! quick, nobody tell them how completely fucking irrelevant it is!
There's only one appropriate response.
:)
"We did it, Patrick! We made a technological breakthrough!"
A place for all those who loathe AI to discuss things, post articles, and ridicule the AI hype. Proud supporter of working people. And proud booer of SXSW 2024.
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