That’s what they want you to think. This chart is especially egregious with calling it “cost of revenue” as if the other costs weren’t just as necessary for their revenue. If they stop R&D in 2027, they won’t have any revenue by 2028 because their models will be outdated and nobody will want to use them. R&D is simply cost of doing business.
I’m noticing the way that last year’s expenses get covered by this year’s revenue. Maybe they’ll try for some deal around that, and expect the bubble to last forever?
Oh definitely. I think it’s anthropic who have stated in multiple interviews that they break even on most of their models, it’s just that they keep spending exponentially more to train the next model. They and openai seem to be stuck in an arms race where switching to purely serving existing models to their existing clients just won’t work. I do wonder how accurate that assessment is on their part.
I find it interesting that according to these numbers, if they entirely stopped R&D and marketing, they would just about break even.
That’s what they want you to think. This chart is especially egregious with calling it “cost of revenue” as if the other costs weren’t just as necessary for their revenue. If they stop R&D in 2027, they won’t have any revenue by 2028 because their models will be outdated and nobody will want to use them. R&D is simply cost of doing business.
I’m noticing the way that last year’s expenses get covered by this year’s revenue. Maybe they’ll try for some deal around that, and expect the bubble to last forever?
If stopping R&D and marketing had no impact whatsoever on their future revenue.
Fat chance.
Oh definitely. I think it’s anthropic who have stated in multiple interviews that they break even on most of their models, it’s just that they keep spending exponentially more to train the next model. They and openai seem to be stuck in an arms race where switching to purely serving existing models to their existing clients just won’t work. I do wonder how accurate that assessment is on their part.
There’s also DeepSeek eating revenue that would go for those more “mature” models.
Words are cheap pre IPO. I don’t believe that for a second.