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Comment by rubiquity | Hacker News Reader

Investors of Amazon who are buying a false reality of AWS revenue growth.

How is it misrepresenting? Amazon didn't just give the money with one hand, and take it back with the other. They bought a stake in Anthropic, although no-doubt the bulk of that money will also come back as AWS revenue! Sounds like a double win for Amazon. There should also be a lot of future AWS revenue from inference, not just training.

I'm jealous of these companies that are able to invest in Anthropic, especially at current $18B valuation. FTX just sold 2/3 of their 8% stake in Anthropic at the same valuation, with the bulk of that going to a Saudi wealth fund, and some to Fidelity funds.

In comparison to Anthropic's $18B valuation, latest investment rounds in OpenAI are at $100B.

I'm curious which of these anyone here would prefer to invest in, at these valuations, if they were given a chance ?!

Having used Anthropic's products fairly extensively over the last few weeks, I would jump at the opportunity to invest in that company.

Claude 3 Opus has replaced ChatGPT for all of my use-cases to the extent that I'm probably going to cancel my GPT4 subscription. This is for web-based Python and JS work, so YMMV.

This is no different than investing in an internal effort.

No it's not, because Anthropic's profit is reported by Anthropic, not incorporated into Amazon's books.

Investing in an internal effort is an operational or capital expense that may do nothing if ineffective, decrease costs if effective, or create a revenue stream. These forced spending arrangements are revenue drivers. It is not the same.

It could be thought of as quantifying the investment. Investors don’t value internal investment at zero. A vague idea that there is more to come is why tech companies have large P:E ratios.

A stock’s valuation mostly consists of guesses about what the future will bring. Sometimes there are more numbers quantifying aspects of those guesses.

Revenue is supposedly about the present, though. If some of the revenue comes indirectly from AI companies spending Amazon’s money, it’s a little odd. Maybe not materially so, though, when total revenue is above $500 billion a year?

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