The American voter is a fickle bitch

Nobody can figure out why, and all the people who used to be considered experts now just laugh at how stupid it was to even try. Some believe all those experts have gone insane… Others know they just got drunk.

If my daddy was a senator, would I get the high paying jobbie too?

Would they expect me to get my daddy to kiss their ass at his jobbie too in return for my jobbie?

I'm curious how fast Super Intelligence will disappear from the mouths of Fuckerberg, Bezos, Musk, Nadella, Huang, Benioff and the other fascist collaborators. If they keep using it, it's gonna follow them like a bad fart in an elevator.

This doesn’t really fit into a programming community, or a retro computing one. And I really wanted to share because this skit / documentary is surprisingly tasteful.

Residents in more than 30 localities across nine states voted for moratoriums, outright bans, and other measures, some in direct response to specific projects underway.

Every single vote presented was shot down. Hell yeah

Sorry, I was referring purely to the headline as the nothingburger. I agree there's plenty of information to consider.

I don't think the article deserves to be called a nothingburger. The numbers are truly wild and everything points to a bubble in AI. Sure, they managed to pull in $33Bn in revenue q1-q3 which is an impressive leap from previous year. But even when you take the large fair value adjustments out of the picture, they are still in the red on real operating profit and have always been so.

And with that backdrop they are projecting to spend an almost incomprehensible $895Bn more on compute and infrastructure. That insane number is not a guess or speculation, they said that's the value of purchase commitments and lease agreements. Where in the heck are those real dollars supposed to come from?

As a borrower or shareholder I would be rightly nervous about how realistic their revenue goals are when stacked against so much investment. When, if ever, can revenue match the spending? It seems unsustainable, but time will tell...

Rookie numbers! Fail harder!!

If a convertible note is redeemed in stock, where does the stock come from? Air?

What does the stock price have to do with their $900b commitments to buy products and services from other companies? My creditors don’t care how well I’m doing if I signed contracts. Revenue growth is slowing so how are they going to cover it while bringing loss after loss and their best idea for business is to lose money even faster?

The price of the apple matters because Anthropic is making claims how much they’re worth, based on how well they’re business is doing. If apples are overvalued then everyone is overstating that. And that means the business isn’t doing all that well. Hence, can’t have cake and it eat too.

There’s a reason derivative instrument valuation goes into PnL. It’s not even like counting nominal value of an option contract without physical delivery that some use to exaggerate value of such contracts, these are vanilla convertibles which can explode in their face in multiple ways.

They don't have to buy their own stock on the market. They can just not sell it in the first place.

If the stock drops in price, the value of the stock they owe will also drop in price. So, in that scenario they will not have $900B of commitments. But it's the same amount of stock.

If I own 10 apples and owe you 5, it doesn't matter if tomorrow apples cost $50 Trillion then 50 cents the next. I still owe you 5 apples either way, and I have plenty of apples to cover that debt to you regardless of how much the grocery store is selling them for.

Side note: plenty of IPOs are terrible investments a lose everyone money. They are risky investments.

Accountant echo chamber is my idea of fun times when it comes to responsible finance.

You can’t eat cake and have it too.

If Anthropic doesn’t own all stock they owe others they’ll have to buy it in the market. If it’s overvalued they’ll have to buy it at a price that will result in losses. If it’s not going to be overvalued then that means that anyone who buys into Anthropic on or after IPO is losing money. Not a good value proposition for buying Anthropic stock, no? And then there’s that $900bn of non-cancellable commitments.

Gotcha. Echo chamber it is then.

I think things are bad because Anthropic posted an over 100bn net loss per GAAP accounting standards. I think GAAP is cool because if you lie about anything that GAAP covers you go to jail. But maybe accountants didn’t know what they were doing when they agreeing upon those rules. Idk, man, maybe this company is just wildly unprofitable and the biggest missalocation of resources in the history of mankind?

No, it's not real money. In this case, convertable notes are loans backed by stock. That's why the debt is valued so highly. The notes are still for the same amount of stock, but the value of that stock is inflated beyond reason. Either way, Anthropic is not on the hook for the cash value of the stock, just the stock itself.

This debt is essentially noting that Anthropic does not own all of this stock on their books, but converting it into cash-value to do so. If someone were to buy the company, like via an IPO, it would be important for them to understand how much of the comapny's valuation is actually owned by the company vs other entities.

I've been providing actual information. Would you care to explain why this is a bad thing for anthropic and how this might lead to their bankruptcy? Or are we just here to echo chamber?

So derivative instruments are not real? You need to tell that to Lehman Brothers accountants. You could have prevented 2008 GFC! xD

It is literally not real money. It is the value of shares that anthropic owes to its lenders. In the event its market value crashes, so does the majority of that debt.

These notes can eventually convert into company shares. Anthropic's valuation increases dramatically. The value of the investors' conversion rights increases too. Accounting rules require Anthropic to recognise that increase as an expense. In other words, Anthropic's rising valuation can actually create a reported accounting loss. An important distinction: This is not necessarily money leaving Anthropic's bank account. It is a non-cash accounting adjustment reflecting the increased value of financial obligations tied to future shares. Think of it this way: You borrow money and agree that the lender can convert the debt into shares in your business. Your business becomes much more valuable. Those conversion rights become more valuable to the lender. You now have a larger accounting liability, even though you haven't paid the lender anything extra in cash. That's broadly what happened.

This is real money, hence it’s included in net PnL. All real companies have to count money like this for a reason. Isn’t Anthropic a real company?

The overwhelming majority of the deficit—$94 billion of the $104 billion—comes from a non-cash accounting adjustment. Early investors like Amazon and Google backed Anthropic using convertible notes (debt that turns into equity). Because Anthropic's estimated valuation skyrocketed toward $1.5T–$2T ahead of its IPO, accounting rules (GAAP) require the company to recalculate the "fair value" of those liabilities. In short: Anthropic looks deep in the red because the company became massively more valuable.

Manageable Operational Losses: When you strip out the funky non-cash accounting charges, Anthropic’s actual nine-month operating loss was only $1.26 billion. For a tech giant scaling this fast, an operating deficit of that size is well within normal territory.

In essence, their actual operational losses, the ones that determine if we get to celebrate them closing down, are literally 1% of the headline.

GAAP metrics like “net loss” are sensationalist, what a claim lol. These are the only numbers that can’t be bullshitted.

Nothing to see here, please return your attention to Annualised Run Rate that we extrapolated out of 15 seconds at the end of February.

It reported a $104 billion net loss during the period, though most of that was due to the change in fair value of convertible notes and derivative liabilities.

It's just accounting bullshit. Sensationalist headline, but a nothingburger.

I fear he might get off on knowing people want him dead. I know Trump does

100% this

Yeah but it's an AI company.

AI you hear!!!

The more an AI company loses, the more valuable the company.
Well, the higher the valuation, which is not the same as value. But nevermind that small detail...

In this particular case, here's a company that's bleeding cash faster than Alexei Romanov juggling box cutters with boxing gloves, and it's valued at... wait for it... $2tn 🥁

It would be hilarious if those fuckers didn't set themselves up to crash everybody's 401k's with them...