What's the endgame once the dust settles? Is it going to be a utility like water or electricity and the cheapest offer will prevail, in which case margins will be crushed? Or is Anthropic (or some other big AI lab) going to swallow everything and become the Google Search of LLMs, with everybody else fighting for scraps?
Or is it local compute, models becoming more efficient and hardware becoming cheaper (again) and companies hosting their own AI clusters like they would run SAP?
I think there is a plausible path where this valuation actually works out, but it's a narrow one IMO. I also want to acknowledge that I personally would prefer if it wasn't the case and a more distributed, open model prevailed.
[–] jacquesm 3 days ago
[–] usrusr 3 days ago
Not all of them. Only those who outspend all the others and then you never really hear of any others. It's like the most basic requirement for the job.
[–] jacquesm 3 days ago
[–] bix6 3 days ago
Isn’t that what it takes though? Doesn’t startup culture celebrate this attitude?
[–] jacquesm 3 days ago
Some do, unfortunately. But that's not all of them.
[–] mexicocitinluez 3 days ago
[–] dwaite 3 days ago
[–] butlike 3 days ago
[–] jacquesm 3 days ago
[–] falseprofit 2 days ago
There is still a chance for something like this to happen with AI, no?
[–] hypfer 3 days ago
I think this might genuinely going to become a problem for them in the long run. People just absolutely hate their guts. That's a very strong motivator to do everything possible to get rid of them.
We'll of course see in 5-10 years if the doom PR will work out, but that always was a rather high-risk gamble, and it already looks like it might not.
There is a significant amount of businesses and people that are very willing to switch to literally anyone else just out of spite alone.
[–] BoxOfRain 3 days ago
My country has no frontier models; since I've no national grounds to support one provider over another, a strong degree of provider diversity is an obvious benefit to me. I also think a highly competitive global market is a good thing for mankind in general, any hegemonic power having a monopolistic or oligopolistic position in AI provision is probably the 'bad ending' for most of us since it represents an enormous concentration of democratically unaccountable power regardless of the power which 'wins'. I'd argue it's rational, not spiteful to favour provider diversity on those grounds.
[–] unrented7977 3 days ago
I really don't see any situation where local AI doesn't absolutely eat the big labs' lunch. They can't compete and the only way it makes any sense for them to exist is if the government somehow tries to ban local AI, which likely wouldn't work in the first place.
[–] jacquesm 3 days ago
[–] simias 3 days ago
Someone like me who spends a lot of time in the anglosphere puts faces on companies like OpenAI or Anthropic. I doubt that's true for most people, especially outside of the USA. They're just big companies, like 3M, DHL or Toyota. Who knows what the management of these companies think of the future of humankind?
I would expect than personality-driven rejection of American tech from abroad nowadays is driven mainly by Trump and, to a much lesser extent, Musk. Everybody else is just "some guy" to 99% of the population.
[–] hypfer 3 days ago
Decisions in tooling are not made by the 99% of the population, but a subset that is likely a lot more tuned-in to all this. After all, that is kinda their job so that they can make good decisions
[–] marcus_holmes 3 days ago
[–] simias 3 days ago
Our modern capitalist societies are, at the very least, amoral.
[–] hypfer 3 days ago
And back then, the world was very different. ZIRP, cryptocurrencies, infinite highs, peak social media. All that stuff
[–] mschuster91 3 days ago
German here, every stupid utterance of at least the orange clown makes national headlines here. Frankly I wish our populations were more exposed to the utter buffoonery of the rest of the American wannabe elites, maybe people would then not go and type their deepest fears into ChatGPT.
[–] atomicnumber3 3 days ago
So I'm doing what I can - I only use local models for 100% of my personal coding. (And their capability is amazing! Qwen 3.8 Flash Next leaves me wanting for nothing at this point.)
And I know open weights aren't enough. I'm ready to support open training if/when we get around to that. I hope once hardware prices ease, we can see homelabbers building small AI hosts (small by homelab standards yknow. So let's say 512GB host ram and 1-2 32GB cards, though i hope we also start to see AI cards with lots of vram but less compute cores). Then maybe we can do folding@home style distributed training.
In a time when software freedom is perhaps more threatened than ever, I'm happy to see that information still WANTS to be free, perhaps even more than ever. Look at how easy it is to distill claude! Despite, presumably, anthropic working very hard to prevent it.
[–] marcus_holmes 3 days ago
In theory, things will become even more free, because you can copy whatever code you like, it's all in the public domain because it was all written by an AI (or enough of it was that a court will decide that copying the whole code base is fair).
And the ability of AI's to reverse-engineer binaries means that even hiding the code won't be enough.
Companies may write T&Cs that try to cover some of this, but they'll still have lost the biggest protection they have.
So, in theory, we move to what the FOSS movement have always wanted: all the code available, all the time, with anyone able to change whatever they like about the software they run.
Somehow I don't think anyone is going to be happy about this, though.
[–] jacquesm 3 days ago
[–] natebc 3 days ago
[–] jacquesm 3 days ago
https://jacquesmattheij.com/beware-gpu-scammers/
Crazy times!
Congrats on getting rid of the debt, that's really a great feeling.
[–] jhartwig 3 days ago
[–] kentm 3 days ago
[–] atomicnumber3 3 days ago
I really want to build something less scuffed, but, yknow. So I'm making do atm.
[–] eichin 3 days ago
[–] jacquesm 3 days ago
[–] hintymad 3 days ago
[–] cyanydeez 3 days ago
[–] lotsofpulp 3 days ago
Is engineering the factories that make the hardware not nuclear engineering? Even if not, considering there exists only 1 supply chain in the world capable of making them, it seems pretty revolutionary. And that moat seems pretty big, given that it hasn't been crossed for many years.
[–] ridruejo 3 days ago
[–] skippyboxedhero 3 days ago
In the long-term, the marginal cost of a request is zero so prices will plunge and a lot of the fixed investment will get stuck. The difference between the cost of training a model/infra and serving a request from that model is a clear problem for economics.
What happens with Anthropic specifically is less clear because they, as every company in the same position in the last 150 years has done, are going to push for regulation. A lot of the risk has also been shifted onto neoclouds. The value of the customer relationship is, however, effectively zero. A core part of their strategy has been to build stuff out like CC to differentiate that but, ultimately, that won't work.
The other strategy they have employed is trying to get other companies to stop training new models. Again, seems unlikely to work.
There is no scenario in which they become Google search outside of government intervention. Obviously this is a key part of their strategy now but at best, this will only work in the US and Europe (I would actually say they are much further along in Europe where there is a strong tendency towards corporatism and centralisation of power, they could be "Europe's AI").
[–] jacquesm 3 days ago
[–] 0xDEAFBEAD 3 days ago
https://www.astralcodexten.com/p/ai-safety-is-not-a-corporat...
[–] petcat 3 days ago
The risk is that USA and China will come together on a joint "AI non-proliferation" agreement in the same way that nuclear technology became restricted by the countries that already had the capability. This will lead to a de facto techno-colonization of the rest of the world just between themselves.
This was a topic of discussion at Trump and Xi's AI summit just last month.
[–] jacquesm 3 days ago
[–] petcat 3 days ago
[–] jacquesm 3 days ago
One of the largest legal services partnerships here in NL just launched their local DC so they can maintain confidentiality. Do you think they are 'running hobby models on 5 year old GPU clusters in the basement'? Or does a couple of racks of GB300's sound like maybe they know what they're doing after all?
[–] petcat 3 days ago
This is all on the horizon. We are only barely scratching the surface and right now it is largely hobbyist having fun with it, but we already see the potential of the AI revolution and where it is going.
[–] qwytw 3 days ago
[–] speleding 3 days ago
With each query OpenAI and Anthropic get more context about their users. When I compare answers between AIs the ChatGPT answer often includes useful things it inferred from earlier conversations. Losing that context could be a meaningful barrier for a customer to switch to a cheaper service.
[–] jacquesm 3 days ago
Not unless they break their own TOS. The temptation must be very large to do so and is probably why those settings keep mysteriously shifting back to 'yes, I give all my data to you to do with as you please'.
[–] sfblah 3 days ago
[–] jacquesm 3 days ago
[–] redanddead 3 days ago
[–] jacquesm 3 days ago
[–] rayiner 3 days ago
[–] Tuna-Fish 3 days ago
The only ways to fight this is trying to either: 1. Block it by cutting off access, which is pretty tough because it basically means you cannot offer unmonitored access which is a no-no to a lot of customers, and even then the workload looks very similar to actual real workloads and if the company doing the distilling is a bit sneaky and using intermediaries etc it's almost impossible to stop, or:
2. Try to use IP law to block the practice, which is pretty gross given how they got the data in the first place, and so far no court has supported them on this. And even if they can make it illegal, it won't actually help because there are countries that see having top-tier AI as a national priority and will actually support their companies breaking laws to get there.
People misunderstand why Anthropic is being so stingy about granting access to their top models. It's not some kind of marketing ploy, they know that if they release them fully openly then there will be a Chinese open-weights model in 3 months that is just as good. Also the reason why they try to hide chain-of-thought and the probability distributions.
[–] anon373839 3 days ago
I don't think the evidence supports this claim. All the important capability gains now come from RL rollouts in real environments. You can't fake that by generating text from a teacher model. Anthropic makes a lot of noise about how China is distilling their models, but all Chinese labs can access is text outputs. They can't even get the logits. Now, compare all of the recent US open-weights models that are far behind the Chinese frontier. Why haven't they simply "distilled" all of those powerful open weight models that are available to them?
[–] cmiles8 3 days ago
[–] jacquesm 3 days ago
[–] butlike 3 days ago
Isn't this somewhat akin to a model learning from its own inputs? Doesn't that behavior lead to model collapse? Either the model is trained on pristine data, in which case it stagnates, or it's distilled from another model, which leads to model collapse.
[–] sfblah 3 days ago
[–] jacquesm 3 days ago
[–] the_sleaze_ 3 days ago
Pardon me? You cannot be serious...
https://media.defense.gov/2026/Sep/08/2003992823/-1/-1/0/CSA...
[–] jacquesm 3 days ago
Independent verification from non-aligned entities would be a minimum for something like this. Note how in spite of all of the claims not a single lawsuit has been filed.
[–] tehjoker 3 days ago
You cannot believe intelligence agencies when they do not offer proof. Their job is to provide (reputationally but not factually) authoritative story lines that protect big business interests from competition overseas. Sometimes they protect US business by bombing their competitors.
[–] koolba 3 days ago
It’s going to be hard for companies to justify paying $1000s per month to frontier providers when they see what’s doable with open versions.
[–] htrp 3 days ago
[–] user43928 3 days ago
Isn't the first open model that likely surpasses original Mythos from February this week's Kimi K3.1 Pro?
Nothing compares to September's Opus 5.5 yet.
Now the question is whether Anthropic is preparing another phenomenal upgrade with Fable 5.5, or if the progress eventually slows down and competitors catch up.
[–] potatototoo99 3 days ago
[–] user43928 3 days ago
I've rarely heard the opinion that for heavy agentic work, Opus wasn't noticeably better.
[–] freakynit 3 days ago
Top models, capable of discovering and inventing stuff, held back from public, and available only as for-rent research service (or whatever the relevant bureaucratic term is) to big corporations and government agencies like NASA, DARPA, NSF, NIST, DOE, etc. only.
I have a feeling that we, the public, will stop getting access to more intelligent models starting next year.. i mean, not the incremental ones, but, major ones.. like the one you got going from opus 5 to opus 5.5.
[–] marsten 3 days ago
Look at the defense industry: The Big 5 contractors (Boeing, RTX, General Dynamics, Lockheed Martin, Northrop Grumman) capture most of the discretionary military budget, and the largest of them is in the $300B valuation range (Boeing, which has substantial non-government revenue). Fine businesses but nowhere near Anthropic's valuation.
Bottom line, the government doesn't have deep enough pockets.
[–] aylmao 3 days ago
In fact, I'd assume this direction has been widely discussed and considered at Anthropic. I think Fable's release was an experiment to test this.
The biggest risks though are China and Moore's law. In the short term, if you don't offer a competitive model as the market grows, you fall behind in marketshare. Anthropic's edge is that it's offering is still better than Chinese offerings. If they offer anything less than that, something not better but just comparable for example, they lose on price. In the long term, as computing capacity continues to increase, local models potentially pose the same challenge.
So there's plenty of pressure for Anthropic to keep widely offering the best model they can.
[–] m11a 3 days ago
[–] program_whiz 3 days ago
[–] visarga 3 days ago
[–] neutronicus 3 days ago
[–] blackmesaind 3 days ago
[–] YawningAngel 3 days ago
[–] neutronicus 3 days ago
[–] jacquesm 3 days ago
[–] freakynit 3 days ago
[–] ashkankiani 3 days ago
At this point, the best guess is he plans to deflate the currency to make the debt worthless.
[–] GolfPopper 3 days ago
That might be the best possible intended outcome, but it also seems unlikely that Donald Trump and his government are involved in anything so far-sighted. Just look at the man's public behavior over the last year; either he is an incredible actor, or this is not a government where anyone in power cares about anything beyond the Big Man's whims of the moment and their personal benefit.
[–] ashkankiani 3 days ago
There's also the incompetence of the ones with the longer term plans making whatever is played out more inscrutable. Although they have actually implemented a significant portion of project 2025.
I personally think it's really funny how if you were to try to reverse engineer his motivations based on the actual outcome, then the most likely answer is that he's a joint Chinese-Russian spy based on how much they've benefited from his elections.
[–] jacquesm 3 days ago
[–] stickfigure 3 days ago
The world is going to be very different in another two years.
[–] celticninja 3 days ago
fuck trump and republicans. and yes whatever goodwill you had built up over the last 60 years was up and away like a fart in the wind when you elected a corrupt pedophile for the second time. And it cant be built back, ever. No one trusts you no to pull the rug if we became reliant on you again. What we will have though is a relationship with allies built on equality rather than one main player calling the shots.
[–] panta 3 days ago
[–] jacquesm 3 days ago
[–] jacquesm 3 days ago
[–] npc99 3 days ago
Not even just from Chinese models, but from companies/labs like Mercury
[–] eurieq 3 days ago
E.g I know people in high finance who switched - they don’t need frontier for many tasks - Anthropic is getting jack all revenue from them.
If the tech improves massively - Anthropic still gets nothing - since firms will want on-prem or cloud offerings that ensure zero data leakage / IP.
You lot haven’t played this out.
[–] npc99 3 days ago
[–] pantalaimon 3 days ago
We've seen businesses moving everything to the cloud before AI, we'll see more of that as regulatory requirements are increasing.
[–] tancop 3 days ago
[–] yxhuvud 3 days ago
[–] sandworm101 3 days ago
Given the trillion-dollar spend, the theory is that every many woman and child in the western world will devote a substantial portion of their income (like 5-10%) towards some sort of AI subscription.
or...
That doesn't happen. All the AI investments go south and every man woman and child in the western world will devote a substantial portion of their income (like 5-10%) to bailing out an economic system that went all-in on AI. Either way, the money has already been spent.
[–] GolfPopper 3 days ago
The already shaky economic system (and associated political systems) can't take the strain of every man woman and child in the western world devoting a substantial portion of their income (like 5-10%) to LLM fallout, and we end up with a collapse scenario of some sort. (Which, to be clear, is near-certain to be worse than either of the above.)
[–] realusername 3 days ago
It's a lose/lose situation here for Anthropic (and OpenAI) whatever happens.
[–] mbesto 3 days ago
It's very possible given the current environment that LLMs go the way of airlines. Low margin businesses that are essential to world economics with heavy price competition.
[–] gnarcoregrizz 3 days ago
[–] jacquesm 3 days ago
[–] throwaway85825 3 days ago
There are tons of private datasets where a model will be fine tuned to provide useful domain specific responses.
[–] jacquesm 3 days ago
[–] throwaway85825 3 days ago
[–] mattm 3 days ago
[–] jacquesm 3 days ago
[–] throwaway85825 3 days ago
[–] jacquesm 3 days ago
[–] user43928 3 days ago
I am under the impression that curated training pipelines are driving the gains, not utilizing random usage data in nefarious ways.
[–] rbtprograms 3 days ago
i keep thinking how crazy it is we went from ChatGPT releasing in 2022 to multi-trillion IPOs 4 years later. the industry still hasn't agreed on how to generally use anything. crazy times ahead.
[–] rkuodys 2 days ago
In LLM world model provider has the opportunity to understand and use the information you value as a company. Append this with regulatory requirements and local, even if less able models, are the way to go
[–] pianopatrick 3 days ago
For certain AI use cases, AI will be like a utility. For other user cases you need to pay a premium for the frontier. For other use cases AI will be local.
Even in the industries you mention (water and electricity) you have all sorts of businesses. Like people selling water in fancy cans for a large markup or batteries vs wall power.
[–] dvfjsdhgfv 3 days ago
Of all scenarios, based on the data we have now, this seems to be the least likely one.
[–] esseph 3 days ago
Already happening, which is requiring a lot of enterprise DC power retrofits.
[–] celticninja 3 days ago
[–] koe123 3 days ago
[–] oddIdentities 3 days ago
This
[–] butlike 3 days ago
[–] aylmao 3 days ago
So like electricity, where most people will probably just use the network, but a few will opt to invest upfront and generate their own.
It's just like a utility with the slight difference that it can be sold at a distance without significant cost for transportation, in many ways it is the ultimate digital good. Unlike Spotify copyright is not an issue, unlike your electricity, gas, internet or water company there is no last mile problem. Unlike Google there are a ton of qualified contenders already (Google had to be better than Altavista, which wasn't hard, but they were so much better they managed to lock up search for long enough to cement their position).
Anthropic has none of the advantages and all of the disadvantages. On top of that all AI companies seem to be run by megalomaniacs.