Ed Zittrain

They buy massive amounts of tokens in advance.

I think Anthropic, for example, if someone is going to do $50 million worth of tokens and it lasts over six months, they're going to take that money up front.

They're going to say, wow, in that month, because all ARR is, is month times 12 or 13, depending on how they do it.

So I think both OpenAI and Anthropic are inflating their numbers.

I actually think one or both of them is misleading investors, but that's something we'll find out about in the future.

I also fundamentally just don't see evidence outside of these two companies that anything's happening.

The largest company within this space was Cursor, and now they've been kind of sort of not really bought by Elon Musk.

Also, if there was so much demand, by the way, why did Elon Musk give up an entire data center to Anthropic?

There are enough signals here that suggest there is a fundamental weakness and

No real major business model here.

We still don't know Anthropic's true burn rate, but we do know that if all of the commitments from Amazon and Google come together in this $50 billion round, it's 30, it's 50, it changes every day, it seems, they'll have raised $108 billion in the last year.

What's going on?

Where is that money going?

And to whom is it going to other than Google, Microsoft, and Amazon?

So one of my simplest points as well is, other than Anthropic and OpenAI, why are there no other AI winners?

Why is everyone piddling around $100 to $300 million ARR, which is $10, $20, $30 million a month?

It's not actually that much for what is meant to be an industry-changing thingamajig.

And there are signs that the economics don't work, the biggest being that Microsoft, GitHub Copilot, by the way, one of the largest clients of Anthropic, is moving to token-based billing on June 1st, 2026.

They have been subsidizing tokens for their users to the tune of, I saw one person who spent $5,000 worth of API calls on a $39 a month program.

I think this problem is across the industry.