How to think about AI company finances
OpenAI and Anthropic are using the standard tech startup playbook.
Earlier this week, I wrote an article arguing that there was no obvious AI bubble. I argued that AI companies are making massive investments in data centers due to surging demand for their services, and that demand is likely to continue growing in the next couple of years.
This prompted severa...
This analysis presents a compelling case for why AI companies like OpenAI and Anthropic might be justified in their current financial losses, framing them as part of a well-established tech growth strategy. The strongest version of this narrative is its emphasis on gross margins as a key indicator of long-term viability, distinguishing between companies that lose money due to scaling (like Amazon) and those with fundamentally broken models (like MoviePass). The use of a relatable coffee shop ana...