alt Hacker NewsThere are a lot of parallels to the WeWork S1. They’ve made absolutely massive forward cash commitments, on a business that’s increasingly commoditized, and with little hard evidence that they’ll generate the revenue (let alone the cashflow) to pay for all these future liabilities. All while everyone is discovering there isn’t really a secret sauce moat to demand much of a a premium over cheaper options that trade a few points above the direct COGS (cost of compute in this case).
If everything goes just perfect they might eek by. If it doesn’t this goes from high flying startup to insolvency and bankruptcy real fast.
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when they start removing biscuits from the Anthropic offices, that’ll confirm their WeWork-like death spiral
Yes, and 5 years and 1 Chapter 11 bankruptcy later, WeWork is now (EBITDA) profitable.
And they've gone private now.
> little hard evidence that they’ll generate the revenue (let alone the cashflow) to pay for all these future liabilities
According to the S1:
- FY24 revenue $386 million -> FY25 revenue $4.59 billion (+1,008%)
- Q126 revenue $4.7 billion -> Q26 revenue $11.5 billion (+145%)
That seems like pretty good evidence of current and ongoing explosive growth. Much of this revenue is pre-paid (re: cashflow). Meanwhile, operating margins went from -184% to -$4%.
Seems like pretty good evidence. Will growth continue apace? Unknown. But the arguments for Jevon's paradox applying to intelligence seem pretty convincing, so the TAM here seems likely to be enormous.
> All while everyone is discovering there isn’t really a secret sauce moat to demand
Also not convinced by this. The Chinese models seem to have distilled their way to current levels, with Anthropic and OpenAI now getting serious about defending against this.
I don't think you're definitely wrong in all this. Rather, I think your claims are too confident.
"token factory" is indeed a terrible business model - no one is arguing that.
IMO the whole thing is based on the fact of "we will reach AGI/ASI eventually, and when we do, we will reach escape velocity".
No one knows - you, me, or Dario if this will happen and when.
that's a real stretch. WeWork was in a business that had already been commoditized (e.g. Regus) for decades.
Anthropic is in a business that didn't exist 3 years ago.