YHK - yet another hacker news clone

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)

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

In a similar way, internal employees would have also a "standard daily rate" like an external employee.

Anthropic isn’t booking it as GAAP revenue, they’re just using the number for marketing.

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.

Plus electricity

As an example, as I understand it, if a hotel chain allows an employee to stay in one of their hotels for free when they go on vacation, the tax value of that benefit is what they would have charged someone for that hotel room, not how much it increased the hotel's costs to have one more hotel room full — which is generally almost nothing.

Of course, the IRS does agree with you when it comes to expenditures that are for the employer's benefit, rather than the employee's. If it didn't, almost all companies would have negative profits from the IRS's point of view.

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

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".

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.

Many companies used to brag about about how nice the laptop or office was as a way of convincing people to work there. Often in the same breath as compensation.

But compensation is only one component of cost.

So I think this guy is confused about what it costs to have an employee and what the employee gets out of it. Possibly intentionally.

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?

And I’m sure more than that. But there’s obviously plenty to work on, and they’re not at the point they can just Claude their way through it.

Now spend 0.5x their salary on AI, and they become 5x productive compared to no AI.

Now spend 1.1x their salary on AI, and they become 20x productive compared to no AI.

It's still obviously worth it to spend the 1.1x. But it is truly remarkable that the biggest cost of hiring a knowledge worker is no longer their salary, but their AI usage.

There is no implication here that employees are being replaced by AI spend, as long as all of the productivity is generating profit. The AI usage still needs a knowledge worker to direct it in ways that it can't direct itself, so you still need the employees.