The world is using 300T token a day. Barely anyone is using AI. This number would grow 30x. If there is anything, Google, OpenAI, Anthropic are undervalued by a great deal.
Structurally they’re in a terrible position on what’s unfolding now with the completely collapse of model valuations. With truly “open” models gaining more and more momentum models are basically worth nothing and “token” prices are collapsing to the cost of compute. That doesn’t leave anything on the table for the Anthropic and Open AI’s of the world.
Is that potential source of revenue? Maybe but folks are verbally very negative on AI ads.
Is that a viable business plan for Open AI? No.
Google search ads are highly converting because they are camouflaged.
OpenAI ads are nothing of the sort!
Honestly, having written that out... I'm not sure that's an outcome that's generally avoidable.
Do I think it's dystopian and shitty? Yes. Doesn't mean it ain't gonna happen and doesn't mean it's not the right move for the business.
It's not just kids in my observation.
If I'm searching for red widgets, it's a fairly strong indicator I'm way more likely than the average to want to BUY red widgets, so a well-placed ad for redwidgets-cheap.com didn't feel hostile.
Now when it's "I am clearly searching for red widgets but you want to railroad me into blue doohickeys because they're paying more per click", you're one step above a Taboola chumbox.
I think the only way out for Anthropic is to buy a few neoclouds as they go under, but even then it's a coin flip as to if they survive the next 3 years.
Where they quite reasonably might be making a loss is their marginal costs + amortised fixed costs (training).
I predict that eventually the training expenditure is going to slow down. At that point, the large commercial providers are likely hoping they can keep inference demand up, and recoup their investment.
The driver for the training is an arms race between providers and open weights labs. But several dynamics could play out:
* Models will be seen as good enough, with only fine-tuning required, for most use cases, and demand for expensive training of foundation models drops off, stopping the arms race. * Most of the participants cannot raise capital due to lack of market confidence in them, and there is a 'winner takes all' dynamic with the remaining provider, who can then raise costs.
I personally think the first end game is more likely than the second.
> I predict that eventually the training expenditure is going to slow down. At that point, the large commercial providers are likely hoping they can keep inference demand up, and recoup their investment.
The big labs can't do this that's their edge over open models. The stickiness is critical for them to keep up. They might try again but it's going to finish badly.
Right now the market is expecting something a lot more than "sells a lot of tokens" out of these things to justify their valuation.
Adobe sits on a treasure trove of:
- Copyrighted multimedia
- Years of telemetry on content creation
Zeiss sits on decades of data:
- Medical imaging, and surgical footage.
- Silicon waffer inspection.
These embody a training corpus that is de facto (lawfully) out of reach of the crawler scrapper approaches of Google/Meta/OpenAI/Anthropic (even if they pirate the seas for torrents like before).
Neither Adobe or Zeiss are an AI power house but the barrier to entry has also dropped with all the movement in the field.
At current prices, it makes sense to self host, but if the price goes down and the demand grows across different verticals, there is room for this business.
https://www.businessinsider.com/companies-hoarding-unused-ai...
Like most “scarcity” scenarios things flip from under supply to massive oversupply real quick. Remember during COVID when lumber got stupidly expensive and then almost overnight folks couldn’t give wood away.
Point is, the number of tokens is a silly metric to proxy these companies' growth.
Anthropic could be super profitable right now if they stopped developing new models. But then they'd quickly fall behind because there's not much of a moat. Maybe the only ones who will survive this are huge companies like Google with separate incomes who can swallow the cost of staying on top.
And these are quite old cards by now. But yeah "all of OpenRouters traffic" is gonna take more than a rack
https://recipes.vllm.ai/deepseek-ai/DeepSeek-V4.1-Flash?hard...