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Comment by GiorgioG | Hacker News Reader

This is Enron-level fraud. What would Ford/GM/Toyota's gross margins be without the cost of manufacturing vehicles?

That's a bit hyperbolic. It's closer to using EBITDA as your "earnings" and bucketing model costs in a rapid depreciation model (which is fair, I'd assume a model is good for more than just 1 year...

It's gross margin. Not including training in gross margin is perfectly reasonable.

The models don’t exist without training. I don’t see how excluding the training cost from the thing they are selling(inference) is perfectly reasonable and not just an accounting trick.

If I am building a widget and have a widget factory that cost money to build and operate, is it reasonable to only use the cost of shipping my widgets to my buyer as the costs for my gross margin?

Generally speaking, IDK about Anthropic specifically, they don't train purely from scratch though. A good chunk of the setup is reused previous models can serve as a basis for the next model. Plus there are methods that also use the previous model as a warm start.

Just taking a wild guess, but I'd assume the .5 releases are built on the previous and the Majors (3, 4, 5) are more extensive retrains?

That’s maybe a reasonable argument but it’s not one Anthropic is making.

If the article is to be believed they aren’t including their training costs.

Also lol at reporting it as above 80% without accounting for the revenue sharing as well.

I bet anyone’s finances look great if you just start ignoring all the money they owe.

> I bet anyone’s finances look great if you just start ignoring all the money they owe.

Lol and truth.

> If the article is to be believed they aren’t including their training costs

In this metric. Revenues aren't a scam because they don't include costs.

We're getting a partial picture. But concluding adversely based on selective disclosure that isn't in control of the person disclosing doesn't make a lot of sense. Especially when it's a compelling narrative.

This concern trolling on behalf of people that can't read to the end of a sentence, about a conversation that they aren't even part of.

Anthropic is clear on what they are communicating. If every message had to be dumbed down to the level of the least attentive person to run across a message third hand, we could communicate and nothing but grunts.

I would like them to communicate something else though (ie reveal what their training costs are, how much revenue share they have and with who) so I could have some idea of their actual profit margins. They're not public yet so they're within rights to withhold that, but it does mean this isn't very useful information for a lot of questions one might have?

> would like them to communicate something else though

Then wait for the S-1. They aren't communicating internal financials to you.

Sure, it leaves many people with unanswered questions.

I wish all companies would provide me with their confidential information.

I find it fascinating that so many people default to Indignant outrage and critique because they want more

> models don’t exist without training. I don’t see how excluding the training cost from the thing they are selling(inference) is perfectly reasonable

Planes and cars take a lot of capital to develop. That's a fixed cost. Building them consumes labour and resources. Those are variable costs. It's useful to know the slop of the variable-cost function.

Unfortunately, just stating that something is reasonable does not make it true.

More similar to if they took out the cost to design the cars and all the many levels of corporate overhead they have in the form of middle management.

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