Eric Schmidt Says AI Is No Bubble and Points to Anthropic's Record Growth
Former Google CEO Eric Schmidt thinks people who call artificial intelligence a financial bubble are ignoring the fast growth of Anthropic. Critics keep warning that the technology industry is built on excitement rather than real value. But customers are spending large amounts of money on these new tools. Even so, keeping sales growing while spending billions on servers makes this race much more complicated than simply creating excitement about new technology.
Anthropic's revenue grows faster than Google's did in its early years
Speaking on the In Good Company podcast with Nicolai Tangen, Schmidt said Anthropic is growing its sales more than twice as fast as Google did when he was its CEO. Financial information reported by Reuters supports this growth, showing that sales in the third quarter rose above $16 billion. Bloomberg reported that Schmidt owns a 1% financial stake in the startup. That stake could be worth as much as $20 billion before the company is expected to sell shares to the public, according to Benzinga.
Huge computing costs and a major reported loss
Anthropic's sales have grown quickly, but training modern AI models requires very expensive computer equipment. Draft documents for its planned stock market launch, reviewed by Reuters, show that Anthropic spent nearly $9 billion on servers during just the first six months of the year. Large accounting costs that did not involve immediate cash payments, linked to financing that can be converted into shares, also pushed the company's reported net loss above $80 billion over the same period.
Free Chinese AI models threaten Western companies' market share
High server costs are not the only problem for Western AI companies. Free AI tools from China could also attract huge numbers of users around the world. Schmidt warned that Chinese models are about six months behind American rivals in their basic abilities. However, free tools could still become very popular in developing countries. If US companies lose the race to attract users worldwide, it could become much harder for them to turn people's interest into long-term paying customers.
In the end, the companies that survive this costly race will be the ones that turn fast sales growth into lasting profits. Early leaders in the industry have shown that people really want AI tools, but controlling the cost of computer equipment remains a serious challenge. The companies that learn how to turn visitors from around the world into loyal paying customers will lead the next stage of the technology industry.