Source: The Pomp Letter
OpenAI, Anthropic, and their peers have raised over $250 billion collectively in recent years yet remain unprofitable, burning through capital at accelerating rates. Inference costs haven't dropped as anticipated, and enterprise adoption remains concentrated among early adopters. The economics break down if scaling compute requires exponentially more capital than revenue growth. Labs must either find dramatically cheaper inference pathways, secure trillion-dollar enterprise contracts, or face investor pressure to consolidate or pivot to lower-cost applications like agents and reasoning systems.