Validation is all about assets and future earning potential. Anthropic’s core assets are a model which is shown every day now to be only marginally better than something that’s free. So that asset appears to have very little value. Their future earning potential depends on folks not figuring out they can get a good-enough result for free, only paying for compute. And Anthropic doesn’t own compute, they rent it.

So the whole valuation is based on the idea that folks will happily pay this company a huge markup for inference over the actual cost of compute for a model whose valuation is rapidly tending to zero. Hence why potential investors are starting to freak out.

> Anthropic sells intelligence, and the most intelligent intelligence.

Most intelligent is a stretch, we don't know how the Chinese architectures would fare if they had the same compute availability as Anthropic and other US labs.

If we extrapolate and consider that they are behind due to artificial export restrictions, once they figure out how to build their own GPUs in a cost-effective/scaled-up way then the American labs' claim of having the best intelligence is at an enormous risk.

They already do a great job being resource constrained, imagine once this constraint is gone!

I mainly doubt the moat, not necessarily the usefulness. Why will customers stay with anthropic? Many cheaper models seem to catch up within 6-12 months, and there’s also other flagship providers that keep pace and compete on cost (oai, Google). Why should I believe that anthropic’s revenue is going to stay consistent, and not evaporate to other competitors?

This is a very competitive market. You can't command fat margins in a very competitive market.

Huh? If a Chinese open weights model comes out that is nearly as good, the valuation drops to very little.

If the justification for the valuation is "they sell intelligence", then their valuation should be $0. Because their product isn't the least bit intelligent, and routinely gets beaten by humans.