I’ll be honest, while I have my doubts about the match of interests and cohesion between an AI company and a JS runtime company I have to say this is the single best acquisition announcement blog post I’ve seen in 20 years or so.
Very direct, very plain and detailed. They cover all the bases about the why, the how, and what to expect. I really appreciate it.
Best of luck to the team and hopefully the new home will support them well.
But how is another company that is also VC backed and losing money providing stability for Bun?
How long before we hear about “Our Amazing Journey”?
On the other hand, I would rather see someone like Bun have a successful exit where the founders seem to have started out with a passion project, got funding, built something out they were excited about and then exit than yet another AI company by non technical founders who were built with the sole purpose of getting funding and then exit.
If that was genuinely happening here - Anthropic were selling inference for less than the power and data center costs needed to serve those tokens - it would indeed be a very bad sign for their health.
Those are estimates. Notice they didn’t assume 0% or a million %. They chose numbers that are a plausible approximation of the true unknown values, also known as an estimate.
This is pretty silly thing to say. Investment banks suffer zero reputational damage when their analysts get this sort of thing wrong. They don’t even have to care about accuracy because there will never be a way to even check this number, if anyone even wanted to go back and rate their assumptions, which also never happens.
I've seen a bunch of other estimates / claims of a %50-60 margin for Anthropic on serving. This was just the first one I found a credible-looking link I could drop into this discussion.
The leaders of Anthropic, OpenAI and DeepMind all hope to create models that are much more powerful than the ones they have now.
A large portion of the many tens of billions of dollars they have at their disposal (OpenAI alone raised 40 billion in April) is probably going toward this ambition—basically a huge science experiment. For example, when an AI lab offers an individual researcher a $250 million pay package, it can only be because they hope that the researcher can help them with something very ambitious: there's no need to pay that much for a single employee to help them reduce the costs of serving the paying customers they have now.
The point is that you can be right that Anthropic is making money on the marginal new user of Claude, but Anthropic's investors might still get soaked if the huge science experiment does not bear fruit.
> their investors might still take a bath if the very-ambitious aspect of their operations do not bear fruit
Not really. If the technology stalls where it is, AI still have a sizable chunk of the dollars previously paid to coders, transcribers, translators and the like.
They had pretty drastic price cuts on Opus 4.5. It's possible they're now selling inference at a loss to gain market share, or at least that their margins are much lower. Dario claims that all their previous models were profitable (even after accounting for research costs), but it's unclear that there's a path to keeping their previous margins and expanding revenue as fast or faster than their costs (each model has been substantially more expensive than the previous model).
It wouldn't surprise me if they found ways to reduce the cost of serving Opus 4.5. All of the model vendors have been consistently finding new optimizations over the last few years.
I've been wondering about this generally... Are the per-request API prices I'm paying at a profit or a loss? My billing would suggest they are not making a profit on the monthly fees (unless there are a bunch of enterprise accounts in group deals not being used, I am one of those I think)
but those AI/ML researchers aka LLM optimization staff are not cheap. their salaries have skyrocketed, and some are being fought for like top-tier soccer stars and actors/actresses
The bet, (I would have thought) obviously, is that AI will be a huge part of humanity’s future, and that Anthropic will be able to get a big piece of that pie.
This is (I would have thought) obviously different from selling dollars for $0.50, which is a plan with zero probability of profit.
Edit: perhaps the question was meant to be about how Bun fits in? But the context of this sub-thread has veered to achieving a $7 billion revenue.
The bet is that revenue keeps growing and unit economics turn positive (which you can't do if you sell a dollar, since no one will give you more than a dollar for it)
You are saying that you can raise $7b debt at double-digit interest rate. I am doubtful. While $7b is not a big number, the Madoff scam is only ~$70b in total over many years.
I am fairly skeptical about many AI companies, but as someone else pointed out, Anthropic has 10x'ed their revenue for the past 3 years. 100m->1b->10b. While past performance no predictor of future results, their product is solid and to me looks like they have found PMF.
Often it happens that VCs buy out companies from funds belonging to a fresh because the selling fund wants to show performance to their investors until "the big one", or move cash one from wealthy pocket to another one.
"You buy me this, next time I save you on that", etc...
"Raised $19 million Series A led by Khosla Ventures + $7 million"
"Today, Bun makes $0 in revenue."
Everything is almost public domain (MIT) and can be forked without paying a single dollar.
Questionable to claim that the technology is the real reason this was bought.
It's an acquihire. If Anthropic is spending significant resources, or see that they will have to, to improve Bun internally already it makes a lot of sense. No nefarious undertones required.
An analogous example off the top of my head is Shopify hired Rafael Franca to work on Rails full-time.
If it was an acquihire, still a lot less slimy than just offering the employees they care about a large compensation package and leaving the company behind as a husk like Amazon, Google and Microsoft have done recently.
From the acquirer’s perspective, you’re right. (Bonus: it diminishes your own employees’ ability to leave and fundraise to compete with you.)
From an ecosystem perspective, acquihires trash the funding landscape. And from the employees’ perspective, as an investor, I’d see them being on an early founding team as a risk going forward. But that isn’t relevant if the individual pay-off is big.
> And from the employees’ perspective, as an investor, I’d see them being on an early founding team as a risk going forward.
Every employee is a flight risk if you don't pay them a competitive salary; that's just FUD from VC bros who are getting their playbook (sell the company to the highest bidder and let early employees get screwed) used against them.
> Every employee is a flight risk if you don't pay them a competitive salary
Not relevant to acquihires, who typically aren’t hired away with promises of a salary but instead large signing bonuses, et cetera, and aren’t typically hired individually but as teams. (You can’t solve key man problems with compensation alone, despite what every CEO compensation committee will lead one to think.)
> that's just FUD
What does FUD mean in this context? I’m precisely relaying a personal anecdote.
> aren’t hired away with promises of a salary but instead large signing bonuses
Now you're being nitpicky.
Take the vesting period of the sign on bonus, divide the bonus amount by that and add it to the regular salary and you get the effective salary.
> aren’t typically hired individually but as teams.
So?
VC bros seem to forget the labor market is also a free market as soon it hurts their cashout opportunity.
> What does FUD mean in this context? I’m precisely relaying a personal anecdote.
Fear, Uncertainty and Doubt.
Your anecdote is little more than a scare story. It can be summarized as: if you don't let us cashout this time, we'll hold this against you in some undefined future.
> Now you're being nitpicky. Take the vesting period of the sign on bonus, divide the bonus amount by that and add it to the regular salary and you get the effective salary
These aren't the same things and nobody negotating and acquisition or acqhihire converts in this way. (I've done both.)
> Fear, Uncertainty and Doubt. Your anecdote is little more than a scare story. It can be summarized as: if you don't let us cashout this time, we'll hold this against you in some undefined future
It's a personal anecdote. There shouldn't be any uncertainty about what I personally believe. I've literally negotiated acquihires. If you're getting a multimillion dollar payout, you shouldn't be particularly concerned about your standing in the next founding team unless you're a serial entrepreneur.
Broader online comment, invoking FUD seems like shorthand for objecting to something without knowing (or wanting to say) why.
And the secretary, sales, project managers, etc who get left behind because the founders and key people were taken away? In an acquisition, they may still be let go. But they also would make money from their equity
You want those people specifically. To get them, you need to hire them for a lot more money than you pay your current folks. That causes a lot of resentment with folks and messes up things like salary bands, etc.
But since they own equity in the current company, you can give them a ton of money by buying out that equity/paying acquisition bonuses that are conditional on staying for specific amounts of time, etc. And your current staff doesn't feel left out because "it's an acquisition" the way they would if you just paid some engineers 10x or 100x what you pay them.
I left out the part that the motivations for the acquirers were not to save money or to be slimy. It was the only way to get around overzealous government regulators making it harder to acquirer companies.
The real risk is not that Anthropic will run out of money, but that they will change their strategy to something that isn't Bun-based, and supporting Bun won't make sense for them any more.
I admit, it is a good acquisition announcement. I can’t remember the last acquisition announcement that was kept for more than 1-2 years. Leadership changes, priorities shift…
One thing I like about this, despite it meaning Bun will be funded, is Anthropic is a registered public benefit corporation. While this doesn't mean Anthropic cant fuck over the users of Bun, it at least puts in some roadblocks. The path of least-resistance here should be to improve Bun for users, not to monetize it to the point where it's no longer valuable.
Very direct, very plain and detailed. They cover all the bases about the why, the how, and what to expect. I really appreciate it.
Best of luck to the team and hopefully the new home will support them well.