Don't focus on the hardware. The models themselves are tremendously valuable. These tools would've been considered alien technology just 15 years ago.

Many many idle GPUs.

The two things being true may as well be: LLM will not be transformative and the LLM business is mangled in terms of ROIC vs CoC.

In fact given the behavior of AI companies, I actually consider it more likely then not that the effects of the technology is severely over-hyped. I for one do not trust the words of the people who mangle their business in terms of ROIC and CoC. Why should I?

They try to get around this by charging you more after you've invested in your tools, but even then you can only go so far (though it's astonishing how far the big guys have managed to get regardless)

Since then they've reported $65bn in annualized revenue by July: https://simonwillison.net/2026/Aug/23/anthropics-best-ai-mod...

And sure, they might be lying about those figures - but if they are, that's investor fraud, and they'll be in hot water with the SEC when they try to IPO. I don't think they are lying about the figures.

If I had numbers on their cost of revenue I would share those. As it stands I'm going to have to wait for either more leaks or their S-1.

https://www.reuters.com/technology/anthropic-revenue-run-rat...

Google, Amazon, Oracle, Microsoft, Meta, SpaceX, and tons of other startups are spending trillions on data centers, but everyone is renting them out. They aren't renting them to each other (and paying the extra overhead when they have their own servers).

That leaves basically just OpenAI and Anthropic on the hook to pay for everything BEFORE the GPU half of it depreciates away, but they are busy cutting prices to compete with Chinese models which runs counter to their need to increase prices to fulfill their obligations.

https://www.sec.gov/Archives/edgar/data/1018724/000101872426...

As a member of the working class who believes this money is coming from systemic exploitation of the working classes, I hate it that Anthrhopic can just loose $8 billion like that. Those $8 billion could have been used elsewhere, including to mitigate the effects of the climate disaster, to educate the youth, towards social security, or to increase the wages of the working people who could have used it to pay rent, or go to the cinema, or a family trip to visit their grandma who lives in Wyoming.

Many of these obligations are with the big clouds who don’t have capacity to serve them anyways. Google has said they have hundreds of billions in purchase obligations they can’t fill because they don’t have enough TPUs and data centers. Google gets a bigger marketing and investor headline, and there’s a queue behind Anthropic if they bail, so of course everyone would sign the commitments knowing the risks.

I’m sure AWS and Azure are on the same page.

In the worst case, many of their biggest customers have tons of GPUs (Meta, AWS), so they could always license out their raw models at steep discount to help absolve themselves of the obligations.

Finally, in the worst case scenario, even with margin compression, they pre-purchased most of the compute so there’s not enough for the open models to run on. If Opus was the same price as Kimi/GLM, I doubt many people would pick the open models.