> Anthropic has told shareholders that its adjusted operating income will be positive for a second straight quarter, the Financial Times reported on Sunday, citing multiple people with knowledge of the matter.

Note this claim is about „operating profit“, which commonly is the revenue - operating expenses (COGS, rent, payroll). This does not include RnD cost.

>Anthropic's gross margins are above 80% before accounting for revenue shared with distribution partners, including Amazon (AMZN.O), and the cost of training its model, the newspaper said.

Gross margin is typically (revenue - COGS) / revenue. Thus, both statements above seem generally in line with commonly accepted accounting standards.

I believe this is a new accounting method called “phantasmagorical accounting.”

Andy Fastow would be envious.

The way I read it, they are convincing the investors that they can fool the larger population convincingly. At the end of the day the investor term is misnomer for big institutional investors, given that these people are managing other people money where they always make out a certain percentage of fees despite the outcome.

I think the latter half of your post is missing

I still question it. It's very light on details by just casually dropping they have 80% margins. I smell bullshit on this.

It is certainly not above them to play accounting tricks to pretend to be anywhere near profitable.

If you create a machine that can turn a dollar into 5, you don't dillute ownership of the machine, you use your fabulous profits to expand production. Anthropic, on the other hand, raises money like crazy, and seems desperate to IPO.

Might be because most hit their maximum growth but need to keep growing indefinitely or risk becoming a “mature” company?

Any business where people are looking at a screen should probably sell ads.

Because consumers don't care much about ads and prefer them to even minor cost differences.

But isn't he taking all the costs into account, that created the experience? Rather than just literally the inference/serving infrastructure? Bananas way of calculating things if so, doesn't match reality at all.

isn't that when the training costs are actually accounted for?

Zitron is worthless–lying about numbers and not correcting the record when you're called out means you aren't trustworthy. Worse than that if you directionally agree with him, which I do.

Is it really capex though? New models are being constantly trained, released at least quarterly, while old ones become obsolete. Training costs vary, but never disappear.

This also includes revenue sharing with distribution partners, which should probably be in COGS.

Isn't training necessary for the end-product? How is it not a cost to generate the output if you can't generate the output without having done the training? Seems more like saying that a car is profitable product when you don't have to account for the steel that its made from. Seems completely disingenuous.

Ok, but a more honest comparison here would be removing the cost of hiring architects and hiring lawyers to draft contracts, not all the per-house costs.

source?

Listed at the end of my post.

this seems false.

Source showing this in accordance with GAAP (Generally Acceptable Accounting Practices)?

> If they were GAAP profitable they either wouldn't be sharing or would be IPOing already

They'd be in their quiet period...

I cynically wonder how much of this "pacing" is a mutual decision to reduce training expenditure costs as OpenAI and Anthropic plan to IPO.

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