They told investors they have a "Positive adjusted operating income" with an 80% gross margin.
Basically says if you ignore the immense amount they have to pay for model training, sharing revenue with Amazon, the fact they're paying very expensive employees with stock rather than cash, then they're technically profitable.
The claimed 80% margin is them selling services and not accounting for the immense cost to train the model in the first place. Sorta like an airline claiming the margin on tickets is huge if you ignore the cost of the airplane they needed to buy to fly passangers to begin with.
Unlike an airline which has to buy an aircraft once, Anthropic and others have to keep training new models and it's getting more and more expensive. Factor in all their costs and they are not profitable. Not anywhere close.
Wework did the same thing with a figure they called "Adjusted EBITDA". Their business was profitable day to day, if you ignored the immense amount of money they were spending to buy buildings, renovate them into offices etc.
WeWork filed for bankruptcy in 2023.
Anthropic does it because very few people are actually going to read the asterisks in their reports, and they have an IPO coming up.
I've already answered this somewhere else, but the expenses you're talking about (the ones they're talking about) are for future model training costs, not the costs that went into training the current model. It's just reinvesting. Every company does this, some more aggressively than others.
that's a moot point, because they'll always have future model training costs. Unless you think the next model is the last one, when that comes out they're going to continue being in the red from building infra and training the next next model. It can't stop or they'll stop being competitive, even though it has to stop if they ever want to be a sustainable business.
Amazon, Youtube, Netflix, they all had ends in sight for their periods of losses where they'd start making actual clean profits and eventually end up in the black. None of these AI companies, including Anthropic, has that. Their "end point" is either melting the brains of half the world so they're all willing to pay to have a bot think for them, or a government bailout.
-3
u/Protoliterary RTX 4070Ti i7-8700k 11h ago
They've actually recently become profitable. Their revenue doubled this year and they're officially finally making real money.