[1] Where "Bad Things" would be the typical interest, taxes, depreciation, amortisation plus the Anthropic specific employee compensation, LLM training (you know, for the LLM lab), revenue sharing agreements (which is a form of paying for infrastructure), etc.
For LLMs, marginal cost is just electricity
Assuming you meant to reply to me and not someone else are you saying under GAAP accounting standards Anthropic is a profitable business because under GAAP accounting their only expense is electricity?
(I see what happened you skimmed the conversation and didn't follow what was being discussed.)
2. The marginal cost is electricity until the hardware overflows. So it's continuous for electricity and a step function for hardware capacity.
Plus you don't address the core point. Frontier AI is capital intensive. A lot more capital intensive than regular software. The existing clouds supporting the entire internet (!!!!) were built for a fraction of the cost of AI infrastructure, and there isn't even an end in sight to this continuous hardware investment.
Let alone hardware refresh cycles.
AI is basically investment into roads.
Software used to be a magical place, closer to selling music albums but even better.
AI is a much worse business margin wise than regular software.
Non-punishment is also not a subsidy; again, words have meanings. Let's use the correct words.