When AI Revenue Eats Your Margins
The Price of AI
There is a simple model for how tech companies are supposed to work: you build a new product, demand spikes, and as you scale up, your margins expand. Operating leverage kicks in, and each new dollar of revenue boosts profits more than the last.
The past
AI's Unit Math Problem
$800 Billion Interest Payment
The unit math of AI is usually presented in terms of compute: teraflops, parameters, and tokens. But occasionally, someone does the math in terms of dollars, and the result is enough to make a CFO faint.
Last week, IBM CEO Arvind Krishna provided one of the
The Business Model of God
Programming note: ARPU will be off Monday, back on Wednesday.
OpenAI's Reality Check
The story of OpenAI's original business plan is already the stuff of Silicon Valley legend. Back in 2019, Sam Altman proposed a simple three-step process: build a God-like intelligence, ask it for a
Enterprise SaaS and AI Narrative
Programming note: We've just released our thematic report: Google's TPU and the New Economics of AI Deployment. It's an 18-page analysis deconstructing how Google is breaking Nvidia's monopoly on AI compute by exploiting the market's shift to inference. Access a
Google's TPU Yard Sale
Google's Chips vs. Nvidia's Margin
Google and Meta have long been fierce rivals in the world of digital advertising. They fight for every second of user attention and every cent of marketing budget. But in the basement of the internet—the data center—they are fast
Why Are Epic Games and Other Customers Leaving Amazon for Google?
For years, Amazon Web Services (AWS) has been the go-to utility for internet-scale computing—the place where businesses rent as much power as they need, on demand. But in the summer of 2025, that seemingly infinite supply hit hard limits.
Internal documents obtained by Business Insider reveal that AWS suffered