70% of AI revenue comes from OpenAI and Anthropic

reilly3000•7 minutes ago

I think this whole premise is ignoring the point that most decently sized companies want to and eventually will be running their own LLM workloads. Currently use cases are limited by scope and imagination, and predominantly focused on cost efficiency. Once a use case becomes a top line revenue driver budgets will become essentially only limited by ROI. There are some inference workloads that are unacceptable to send to the frontier labs for privacy reasons. Most of it will come from firms who want to productionalize their own fine-tunes. In any case, the market for inference is less than 1% of what it will be in 5-10 years. This whole notion that GPUs will be sitting idle en masse is ridiculous. People will just start running GPU databases if it becomes cost efficient.

jrflo•9 minutes ago

I don't know much about this guy other than every time I see him on here he has an axe to grind about AI

ElProlactin•7 minutes ago

"Because Goldman does this kind of nonsense."

Hilarious. You can agree or disagree with Zitron but he really has no business talking about Goldman Sachs. His posts are littered with evidence he has no ability to perform the type of financial analysis he thinks he does.

vikramkr•about 1 hour ago

Ai revenue or datacenter/compute revenue? There's a lot of circular financing right now and there's a pretty obvious bubble for sure but I haven't been able to figure out what exactly this guy's argument is after seeing it a few times recently. Like yeah most ai datacenter spend is those two companies - that's pretty standard monopoly (or monopsony for the cloud providers) dynamics. If you're saying some major percentage of all ai related spending is openai and anthropic spending money on compute - well that's not exactly right because Google etc are also spending money on building datacenters (that's not ai spend in this definition? WTF is ai revenue exactly?) - and that's just pretty much indicating it's a frothy market with two unprofitable companies at the center with huge cogs? We knew that already.

Feels like they want to make a clean headline grabbing argument about how "70% of all the spending is actually just these two companies" and are ending up with a really muddled headline that's just like yeah that's how monopoloies and duopolies work. When there's a lot more insidious circular complicated shenanigans going on that gets collapsed by this framing.

lokar•12 minutes ago

The general concern (from him and others) is that the cloud providers are making extremely large capex commitments (borrowing, going cashflow negative) to satisfy demand from a small number of customers who may not be able to pay them.

re-thc•3 minutes ago

> to satisfy demand from a small number of customers who may not be able to pay them

Because a lot of isn't real demand, e.g. given away for free or very very cheap.

doctorpangloss•11 minutes ago

One interpretation is that so called profitability is one 15 minute phone call between OpenAI and Anthropic to increase prices. If you think that antitrust is the reason that this won't happen, you've stated a speculation. Not a certainty.

bvghnnxeyjbx•7 minutes ago

there isn't enough demand to raise prices. OpenAI announced price CUTS recently and they are hilariously unprofitable already. Why would they be cutting prices if they have the ability to raise them? outside of this website and the ownership class everyone hates AI

johnbarron•about 1 hour ago

>> When there's a lot more insidious circular complicated shenanigans going on that gets collapsed by this framing.

All that is discussed in the video, plus those distinctions. And most important, that AI revenue would not exist...if OpenAI and Anthropic would not be funded, by the same Amazon, Google and Microsoft they are buying it from!

We now have several voices saying the same:

"Aswath Damodaran: Big Tech Has No Idea How AI Pays Off" - https://news.ycombinator.com/item?id=49229981

"Why Wall Street Is Ignoring Big Tech's Debt" - https://news.ycombinator.com/item?id=49230630

scotty79•about 1 hour ago

Wasn't it always seen as a "winner takes all" business?

sethops1•24 minutes ago

There is no "all", that's the point. There is no pot of gold at the end of the AI rainbow.

TZubiri•9 minutes ago

There's a lot of money changing hands, at least that's a spoil isn't it? And if the music stops, someone is going to end up holding it.

grey-area•5 minutes ago

Well a lot of money is being spent, but is a lot of money being made?

With circular deals it’s hard to tell.

amelius•8 minutes ago

If there was one winner then that would make a lot of people very angry.

70% of AI revenue comes from OpenAI and Anthropic

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