Even the best product in the world can come from a company whose own valuation is too high.

Anyone is bearish on Nvidia today if the share price would be at a $10T valuation.

There's a difference between a good product and a good business. It's easy to see this is a great product but it's really difficult to see how it's a great business. All the traditional things we look for from great businesses seem to be absent here - they don't have network effects like facebook or uber, they don't have lock-in they way Apple has, and to a large extent they don't have the traditional economics of SAAS. They have a product that is interchangeable with 3 or 4 other companies, they have extremely high initial investment costs to train models, and it's not clear they can actually sell tokens for more than it costs to make them.

It's like the foundry business, an ever increasing cost of moving to the next node requires ever increasing scale which naturally kills off competition.

Citation needed?

I spend $0 on AI. My employer spends on it for me, but I have no idea how much nor how it compares to vast array of other SaaS my employer provides for me.

While I anecdotally know of many devs who do pay out of pocket for relatively expensive LLM services, they a minority compared to folks like me happy to leach off of free or employer-provided services.

I’m very excited to hopefully find out from public filings just how many individuals pay for Claude vs businesses.