Why are we still doing this?

In fact, let’s talk about that for a second. At the end of January, OpenAI CFO Sarah Firar said that “our ability to serve customers—as measured by revenue—directly tracks available compute,” messily suggesting that the more compute you have the more revenue you have.

This is, of course, a big bucket of bollocks. Did OpenAI scale its compute dramatically between hitting $20 billion in annualized revenue (to be clear, I have deep suspicions about these numbers and how OpenAI measures “annualized” revenue) in January 2026 and $25 billion in March 2026? I think that’s highly unlikely.

What about Uber? Uber is a completely different business to Anthropic and OpenAI or any other AI company. It lost about $30 billion in the last decade or so, and turned a weird kind of profitable through a combination of cutting multiple markets and business lines (EG: autonomous cars), all while gouging customers and paying drivers less.

The economics are also completely different. Uber does not pay for its drivers’ gas, nor their cars, nor does it own any vehicles. Its PP&E has been between $1.5 billion and $2.1 billion since it was founded. Uber’s revenue does not increase with acquisitions of PP&E, nor does its business become significantly more expensive based on how far a driver drives, how many passengers they might have in a day, or how many meals they might deliver. Uber is, effectively, a digital marketplace for getting stuff or people moved from one place to another [...].

In any case, there is no future for any AI company that uses a subscription-based approach, at least not one where they don’t directly pass on the cost of compute.

This is a huge problem for both Anthropic and OpenAI, as their scurrilous growth-lust means that they’ve done everything they can to get customers used to paying a single monthly cost that directly obfuscates the cost of doing business.

Let’s say that Anthropic and OpenAI immediately decide to switch everybody to the API. How would anybody actually budget? Is somebody that pays $200 a month for Claude Max going to be comfortable paying $1000 or $1500 or $2500 a month in costs, and have, at that point, really no firm understanding of the cost of a particular action?

First, there’s no way to anticipate how many tokens a prompt will actually burn, which makes any kind of budgeting a non-starter. It’s like going to the supermarket and committing to buy a gallon of milk, not knowing if it’ll cost you $5 or $50.

A fantastic, long essay on the financials of AI companies and the insanity we currently live in.