I deleted my mainstream social media accounts about 15 years ago after realizing what they are. I am convinced that at some point most of them will be viewed the same as nicotine.
I still have accounts on niche sites (like this one) that are mostly neutral, have nice, civil discussions, and are not designed to steal my time.
Yeah, it's a crazy number, but they got the AI business right, just like Google got internet marketing right 25 years ago, as long as they keep the momentum (and prices).
> google launched at i dunno a 1bn market cap and grew as the internet grew
Google closed its first trading day "worth more than $25 billion" [1] with $1.5bn revenues, up 234% from 2002's $440mm [2]. That's a 16x revenue multiple, 0.07 growth adjusted [3].
On a similar revenue multiple, Anthropic's $16.3bn half-year earnings are worth $543 billion. Adjust for Anthropic's 1,400% YoY growth and you're well over $3 trillion.
Obviously, it's a lot harder to grow at a thousand percent from a $16bn baseline versus a few billion. But purely on a multiple basis, Anthropic is in a similar ballpark as Google.
As another check, SpaceX is trading at ~62x sales with a growth rate in the 30% range. Assigning the same sales multiple puts Anthropic at ~$2T market cap. Add in a factor for much faster growth (and non-GAAP profitability) and $3T is a really easy place to end up.
Sure, you can throw any numbers around, if you wish to get any valuation you want.
In reality, a valuation based on revenue (sales) is bonkers to begin with, but even worse when you consider that Anthropic has so much debt that it doesn't have positive equity value, it's in a deficit ("When liabilities attached to an asset exceed its value, the difference is called a deficit and the asset is informally said to be "underwater" or "upside-down""). At least SpaceX has more assets than liabilities.
There are a set of mistakes in what you wrote, but
> SpaceX has more assets than liabilities.
is definitely a choice thing to write on the day SpaceX announced a $40B debt deal to purchase compute to run other companies' models. Based on available information, this will put SpaceX into a place where it has more liabilities than assets.
Larger point stands. SpaceX is commanding a 62x sales multiple, whether or not you personally believe price:sales should be relevant. SpaceX's AI operation is smaller and growing slower than Anthropic's. It's reasonable to expect investors to benchmark Anthropic against SpaceX, it would be silly not to do so. A normal thing one would expect investors to do is assign a higher multiple to a company that grows faster.
But the question is not so much if they can IPO at those prices but rather if the valuations are sustainable over a couple of years. If they are priced to perfection there isn't much left for public investors besides huge risk that something might not work out 100% as expected.
Well not exactly. It's quite different this time since most other tech companies used to IPO way earlier. So their valuations weren't based on everyone assuming that they will continue growing exponentially, corner the entire market and effectively become monopolies. You used to have much more uncertainty and therefore potential upside for investors. I mean Anthropic can do great by the standards of pretty much every other public company and still catastrophically underperform the current expectations.
> Some people will benchmark Anthropic vs. SpaceX, that doesn't make it a smart approach.
Yeah, I would not pay 62x sales for SpaceX. And I don't buy IPOs. I'm not endorsing these values, I am saying benchmarking against peers is what investors commonly do.
> A normal thing is to consider risk, liabilities, cashflow, how diversified revenue streams are etc., and other things which you seem to be missing.
I'm not missing those things, I am not including them here because being "right" is rarely how markets value companies. (Also because the rest of that stuff is in the S-1.)
It's possible to build a "correct" model of a high-growth high-tech company that looks primarily at risk, liabilities, cashflow, and diversity of revenue streams. That model might put Anthropic at (say) a $100B valuation. That "correct" model is going to be less predictive than a model that starts from what similar firms are trading at in public markets. I personally am more interested in predictive power than correctness when evaluating stocks.
> I am saying benchmarking against peers is what investors commonly do.
You are benchmarking against an outlier stock with a cult following (Elon Musk) and diversified sources of revenue. Anthropic does not have either.
If it was as easy as comparing the hottest new IPO with Elon's companies and applying the same multiples, people wouldn't have lost so much money on electric car IPOs that pretended to be Tesla (see PSNY -99.5%; NKLA -99.99%; FSRNQ -99.99%; etc.).
> being "right" is rarely how markets value companies.
Conventional metrics are how most stocks are valued most of the time. What you want to say is that market can be exuberant sometimes. That's fair. When the exuberance goes away, valuations come back to earth (see PSNY -99.5%; NKLA -99.99%; FSRNQ -99.99%; etc.).
> That "correct" model is going to be less predictive than a model that starts from what similar firms are trading at in public markets.
Even if we take your statement at face value, you're still not doing it right. A valuation based on comparisons has to have more than 1 peer to compare against. Check out the multiples of other model providers listed on the stock market. You'll probably be shocked that it's not a double digit multiple of revenue.
And then, if you really want to have a proper model, isolate the AI revenues of SpaceX and other hyperscalers, then we can argue that you have a model worth something.
> You are benchmarking against an outlier stock with a cult following (Elon Musk) and diversified sources of revenue
So in this case, diversified revenue is a drag on SpaceX because all the non-AI revenue is growing considerably slower.
But your point about Musk is taken. Cerebras went out in May, and despite being a hardware company is trading at 37x sales. Palantir trades at 78x, CrowdStrike at 50x, Cloudflare at 47x, etc. Anthropic is growing significantly faster than any of those companies. I'm not making the case that Anthropic will/should trade at any of those, just that Anthropic trading in the range of the P/S of SpaceX would not be crazy, and it would not require Musk to be involved.
> A valuation based on comparisons has to have more than 1 peer to compare against
Yes, the best peers are "public pure play frontier model providers trading in the US." There are none. SpaceX is closest, despite not really being a frontier provider and definitely not a pure play. But you are correct that investors will use a basket of stocks. It is silly to suggest SpaceX will not be in that basket.
You absolutely can make an AI doomer basket to model Anthropic. Use "real infrastructure companies" as the connective tissue since AI wants to be infra. In your basket put Caterpillar, Kroger, The Southern Company, AT&T, Comcast, and ExxonMobil. You can absolutely make the argument that Anthropic should trade more like them than like CrowdStrike or Cloudflare, that is a coherent position. Then based on that infra peer group, calculate a valuation. I think this model will be much less accurate in the near term than a model that uses other high-growth tech companies.
Price discovery is part of the fun of IPOs! The doomer model could be right, the stock value could collapse toward irrelevance as fast as the exchange's circuit breakers will allow!
> So in this case, diversified revenue is a drag on SpaceX because all the non-AI revenue is growing considerably slower.
Your argument is like saying that having gearbox in a car is a drag on speed, why not remove it? Just take out the transmission and the windshield while you're at it too.
> Cerebras went out in May, and despite being a hardware company is trading at 37x sales. Palantir trades at 78x, CrowdStrike at 50x, Cloudflare at 47x
None of those companies are AI labs, you're just cherry picking random expensive stocks and doing the whole price/sales nonsense again. All of them have positive shareholder equity (Anthropic has shareholder deficit).
> But you are correct that investors will use a basket of stocks.
That's your approach, I was just quoting it.
> You absolutely can make an AI doomer basket to model Anthropic. Use "real infrastructure companies" as the connective tissue since AI wants to be infra. In your basket put Caterpillar, Kroger, The Southern Company, AT&T, Comcast, and ExxonMobil.
At this point you're either being silly or arguing in bad faith. Your best case scenario is for Anthropic to trade like a stock with cult-like following and your worst case scenario is for it to trade like a ketchup stock. Completely ignoring the most obvious tech companies that are traded publicly and also provide models of their own. This conversation became so absurd that it's not worth answering anymore.
The mental gymnastics you're doing here are appalling.
Someone on a different forum fed the S-1 in Fable and it said "Shows a massive “loss” on paper, but that’s mostly an accounting effect from the company’s value going up"
Stock markets made a whole lot more sense before the internet and broad interconnectivity. It was really only one of the reliable ways for companies to broadly raise money to grow and expand. Now everything just feels like a mixture of gambling and pump and dump.
Like is there going to be anybody, whatsoever, who's genuinely aiming to go long on Anthropic? It just feels like this massive collusion that 'everybody' is in on where we all know it's going to crater but the whole game is to pump it as much as possible and just try not to be the last guy holding the bag.
Obviously LLMs are going to revolutionize the world, and they arguably already have, but there are open weight models available for free with frontier level performance, and the price to run these models keeps plummeting which, in turn, is already driving token costs down. Like many things now a days, this is all highly entertaining, yet absolutely insane.
Did they get it right? I'm geniunly curious because from my point of view the only company to get AI right so far is Microsoft. This is from the point of view of an EU energy company married to Microsoft services mind you, but Microsoft is the only AI company which actually sells AI to us in a manner that can be considered useful. 7 months ago I thought Copilot (the m365 one, not the github one) was useless. Now I think the chat part is as good as what you'll get on the smaller subscriptions to ChatGPT or Claude, and it's Cowork is very good.
Obviously it's not like having Claude Code or similar, but those would be very hard to run legally and safely in EU regulated industries like us in energy production. You could run Codex but it would require your IT department to have yet another place to manage security and software integrations. Which is a fairly big issue when you have around 1 IT staff member per 300 employees, and an organisation which will buy five different sharepoint solutions for the same problem.
Microsoft sells something that seamlessly integrates into everything else you buy from them. It's easy to manage credit spending and when I say that I don't mean that it's easy to set it up. It's easy to track and budget so the right departments pay for it. It can read your emails, your onedrive, your loop, your sharepoint, your powerbi/fabric and anything else you have access to. Sure it's annoying to be confronted with a point you've made 7 months ago (like how you think Copilot is utter trash) and since changed opinions on it's frightingly good at finding relevant stuff, even in some obscoure legal document on your intranet.
I assume that Anthropic and OpenAI makes money of this somehow, but for the most parts our users wouldn't care if it was the GPT and Claude models or Mistral or Deepseek. Which is why I asked if they had really gotten it right.
The company I work for has a plan B to switch to alternative, self-hosted models if providers pull off strange moves, such as drastic pricing changes. We have already switched from one provider to another once, and we do not want to get burned again. We do not reverse engineer, just regular development.
No I mean being responsible for the implementation and continued good functioning of something Kevin was responsible for before he quit. So uh self-hosting in a corporate context sure
If we go for anecdotal examples that are not representative, then in my case, Bitwarden passkey use ends in an endless loop with most websites. Import and export is still a promise or "coming soon." In the case of hardware keys, two devices are needed. I was a proponent of passkeys, but big players screwed that up, like every single shared "standard".
I work for a typical software product company, and along with most of my colleagues, I clearly see that the curve is so steep that our software development process has already changed tremendously and will be different next year, and probably completely different in the following years. The revolution is real, undeniable, and the old days are gone. Some companies adapt to changes more slowly, some faster. LLMs, agents and harnesses are just a part of the bigger picture.
Those are just entertainment products, both the game and the streaming service. They can be skipped. In the end, price dictates popularity. If it is cranked too high, it will not sell. There is nothing new here.
The gaming industry competes with free social media and is losing tremendously, so Microsoft's steps actually do not make much sense. I think they will just give up at some point as they cannot create a portfolio of games and services that is profitable enough for them.
Why? I really enjoyed the book, over-colorized, probably written to be made into a movie. He never portrayed SBF in a good or bad light, but he showed the mess SBF and his companions made.
Lewis wrote about and gave plenty of interviews outside of the book about how incredibly inciteful SBF was... basically up until the moment of his arrest.
I got the impression of an "Elizabeth Holmes is wonderful" vibe from those interviews, showing how people perceived SBF. The overall image of SBF from the book is pretty bad, but it's never stated directly.
reply