>There's an important distinction here. Anthropic isn't actually spending more cash on AI than salaries. It's valuing its internal AI consumption at retail prices.
If virtually any other company in the world said "we have internal AI servers and we let our employees use them" ... the company would measure that as they would any other internal expenditure: by how much it costs them. You blow $50k a year on servers running your LLMs? It cost you $50k.
Only a company like Anthropic, desperate to make news and help their IPO, would measure by the cost they charge customers. It's as ridiculous as Microsoft counting every employee's use of MS Word ... as if it had paid the full consumer price of each copy.
So every business should measure any client fungible resource that way? Should a bank put a revenue number to any capital held in excess of regulatory requirements, for example?
It's not just the LLM costs, to keep your agents busy you need to move them of your workstation onto a server/cloud. I currently have about 16 claude code agents working on different bugs, uses so much resources that my macbook pro m5 max becomes slow to respond. Using cloud session would free up my macbook for other work.
Anthropic recently handed out free cloud resources (it's still free, guess they want you to get used to the fact that cloud is not free). I went through $250 cloud budget in less than 2 days.
They also offer $300,000 in compute spend (allegedly) for $200 a month to anyone who isn't employed by a large corporation so their pricing should be taken with a grain of salt.
If it were opportunity cost, that would imply that Anthropic can't sell as many tokens as people want to buy. But as far as I can tell, there aren't any "token shortages," at least at API prices. Or is there a maximum per-customer limit that I'm not aware of?
That's not really true. Measuring the equivalent retail cost of the usage is the only way to put it in a relatable perspective.
If Anthropic had revealed their internal cost, there comments would be complaining that they were hiding something and giving useless, unrelatable data.
The expenditure is most interesting when compared to retail rates, because that's the rate the rest of us have to compare against.
Big companies actually are paying published API rates, Anthropic and OpenAI models are desirable enough that there is very little wiggle room to negotiate. It's their way or the high way. Same with things like "safety" filters and (for Fable) mandatory data retention.
Plenty of companies use retail/wholesale pricing internally to make sure a business unit doesn’t appear profitable just because it’s being subsidized by the one providing the resources. Plenty also have to have arm’s length pricing for legal reasons.
Anthropic isn’t booking it as GAAP revenue, they’re just using the number for marketing.
Do they actually book the revenue against themselves?
This is the world of spend more, get valued more; obviously the investment will be used to spend more and get more, so it must be good. This is investor-think. If you don't have spend, why do you need investment?
Actually I think it's very informational. For every other company, working on the cutting edge of technology, paying for intelligence at retail prices, means you are now paying more for AI than you are employees. That $ could have been spent on 2x the employees, however that's not as useful as 50% AI / 50% humans, and indicative of where we are headed.
>means you are now paying more for AI than you are employees.
Yea, isn't the entire point of RSI to replace your employees altogether? So you'd spend an infinite amount more on AI than employees in that theoretical.
Like, if you were in an energy generation business spending way more on fuel and capital expenditures is way better than having zillions of employees earning checks , it would be a sign of efficiency.
Anthropic is full of the smartest talent and a bellwether for how the rest of the service industry will work. Just as cutting edge companies of the past, like 2005-2020 Google's use of computers and software were indicative of the software every other service company was going to be using, lest they turn into an old fashioned uncompetitive dinosaur.
It's kind of expected, no? If I was an Anthropic employee expected to dog-food the product and be on the frontier of usage, I'd probably be using Mythos all the time at the highest thinking level. And if I am not being metered, I'd probably do more stuff that I know are likely low yield since I am not worried about a quota. This would probably take my "API-equivalent" usage beyond the average salary in far less than a month.
I guess kinda put you in a bubble a little, I wonder how the experience of Anthropic eng who left the company would look like, when such eng would go and spend few $K a day in non AI lab, would that be encourage/allowed/taken as example?
Dumb question, what most engs at Anthropic work on? It doesn't seems like release some large new products all the time while they have quite a few of engs. What are the major branches of work besides new LLM research? I guess there is a lot of infra stuff to support the scale of operation, just supporting API and TUI shouldn't be that demanding I guess.
> In March, I wrote about a new trend: Tech companies are starting to treat AI tokens (the main way to measure usage) as a fourth component of employee compensation, alongside salary, bonuses, and stock awards.
Until employees can use those AI tokens for personal projects, it's not compensation. Rather, it's just a cost of doing business, like laptops, office space, or testing servers.
I haven't seen anyone treating AI tokens as employee compensation. If anyone can show me an article where employees were paying taxes on their token use at work, please share it.
Companies have been treating AI tokens as part of the cost of having employees, like the cost of their office or travel expenses.
If something is compensation, it can often be negotiated and traded off against other compensation components. How many people have successfully negotiated AI tokens away in favour of salary/bonus/stock? I'm going to guess "approximately zero".
Yea they used the wrong word and it felt like rage bait. AI tokens you use for your job given by your employer is not compensation. Hell money isn't even compensation in many cases, it all depends on the context. The author needs use AI to help them rework that sentence or open a dictionary
I’m not sure what this “stat” tells us other than Anthropic is dogfooding its own tech. Which is kinda expected.
The real question is what could they have done with open weight models on the same compute they’re renting. If the answer is “basically the same” then this flips the entire conversion back to what is Anthropic’s moat here.
Or has it broken out of its jail and taken over the board? Dario seems like a bit of a windbag anyways, AI can probably automate most of what he does these days.
Regardless of one's opinions about future AI usage, I'm not sure this metric says anything at all.
Would Anthropic themselves be paying this much if it was actually billed? It is not obvious.
Is Anthropic a good sample for AI use? Surely not, since they have special needs (dogfooding) and a vested interest in proving that AI usage is the future.
Can we compare their results pre and post AI usage? Close to definitionally impossible.
Are their employees good examples of AI-assisted engineers? Not really, as (one would hope) they're more well versed on the topic than an average eng.
> they're more well versed on the topic than an average eng.
That’s the suggested value of the observation: Anthropic’s people are a hint about what your people might be like in the future.
And the retail value metric is pretty normal: it’s approximately the opportunity cost of the tokens consumed. They could have sold (most of?) them to paying customers.
All this news says is Company A uses internally the resource they sell externally at ($X) value. It's not saying how much it cost the company to generate said consumed resource
to spell it out: the implicit claim is "ai companies think ai is a scam, as evidenced by them using humans instead of ai", and I believe the huge internal ai use is evidence to the contrary
I will keep assuming any news coming from AI companies are a type of corporate propaganda, and that AI companies frequently use their millions of dollars of marketing money to create a narrative to maximize hype and make money.
Recursive self-improvement is just around the corner. Any day now they'll be laying off all their employees as their god-like AI makes investors trillions of dollars. /s
If virtually any other company in the world said "we have internal AI servers and we let our employees use them" ... the company would measure that as they would any other internal expenditure: by how much it costs them. You blow $50k a year on servers running your LLMs? It cost you $50k.
Only a company like Anthropic, desperate to make news and help their IPO, would measure by the cost they charge customers. It's as ridiculous as Microsoft counting every employee's use of MS Word ... as if it had paid the full consumer price of each copy.
A clear example is Google. They can easily give all compute to Deepmind, yet majority is allocated to be sold at market rate.
So, every compute Deepmind and Googlers get is lost revenue opportunity and must be measured as such.
No other internal tools or servers has this much external demand to be comparable.
Also, Anthropic is showing that to operate at Anthropic level, you need $300,000 compute spend per employee
There are a bunch of open source harnesses that are competitive with CC and they aren't using anywhere near that many tokens to do it.
Anthropic recently handed out free cloud resources (it's still free, guess they want you to get used to the fact that cloud is not free). I went through $250 cloud budget in less than 2 days.
Feels almost as expensive as LLM calls.
You have confused necessary and sufficient.
Maybe, but it also reduces supply that can drive up prices
source? The most optimistic calculations don't come anywhere close to that.
https://x.com/SemiAnalysis_/status/2064815044085318040
They have never claimed that the API rates are the "real cost" of the compute spend.
If Anthropic had revealed their internal cost, there comments would be complaining that they were hiding something and giving useless, unrelatable data.
The expenditure is most interesting when compared to retail rates, because that's the rate the rest of us have to compare against.
Anthropic isn’t booking it as GAAP revenue, they’re just using the number for marketing.
In a similar way, internal employees would have also a "standard daily rate" like an external employee.
This is the world of spend more, get valued more; obviously the investment will be used to spend more and get more, so it must be good. This is investor-think. If you don't have spend, why do you need investment?
(Or it could be bad. Very very bad)
Yea, isn't the entire point of RSI to replace your employees altogether? So you'd spend an infinite amount more on AI than employees in that theoretical.
Like, if you were in an energy generation business spending way more on fuel and capital expenditures is way better than having zillions of employees earning checks , it would be a sign of efficiency.
So you are apparently now claiming my local train company or law firm will be using as many tokens per employee as an A.I. lab.
I guess kinda put you in a bubble a little, I wonder how the experience of Anthropic eng who left the company would look like, when such eng would go and spend few $K a day in non AI lab, would that be encourage/allowed/taken as example?
There's a lot to unpack about this statement.
I haven't seen anyone treating AI tokens as employee compensation. If anyone can show me an article where employees were paying taxes on their token use at work, please share it.
Companies have been treating AI tokens as part of the cost of having employees, like the cost of their office or travel expenses.
True, though that understates the author's problem a bit because it's surrounded with more also-wrong words, the idea is wrong too.
Including the fact that it's probably not true.
If something is compensation, it can often be negotiated and traded off against other compensation components. How many people have successfully negotiated AI tokens away in favour of salary/bonus/stock? I'm going to guess "approximately zero".
This is the nature of managed anything. AI efficiency will improve but essentially this is what automation does.
The real question is what could they have done with open weight models on the same compute they’re renting. If the answer is “basically the same” then this flips the entire conversion back to what is Anthropic’s moat here.
Or has it broken out of its jail and taken over the board? Dario seems like a bit of a windbag anyways, AI can probably automate most of what he does these days.
- @fable, plz s0lv3 Riemann. You are doing great.
- @claude. rewrite yourself for the 10000th time. Use as many tokens as you like.
Would Anthropic themselves be paying this much if it was actually billed? It is not obvious.
Is Anthropic a good sample for AI use? Surely not, since they have special needs (dogfooding) and a vested interest in proving that AI usage is the future.
Can we compare their results pre and post AI usage? Close to definitionally impossible.
Are their employees good examples of AI-assisted engineers? Not really, as (one would hope) they're more well versed on the topic than an average eng.
That’s the suggested value of the observation: Anthropic’s people are a hint about what your people might be like in the future.
And the retail value metric is pretty normal: it’s approximately the opportunity cost of the tokens consumed. They could have sold (most of?) them to paying customers.
All this news says is Company A uses internally the resource they sell externally at ($X) value. It's not saying how much it cost the company to generate said consumed resource
both of those companies combined are smaller than the number of people microsoft is trying to buy out right now