AI's Brokenomics
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A scathing critique of the economics underlying OpenAI and Anthropic's business models. The piece argues that both companies have been massively subsidizing user token consumption — allowing $200/month subscribers to burn up to $14,000 in tokens — while hiding the true cost of AI from enterprise customers. When token-based billing was introduced in early 2026, companies like Uber, Meta, and major banks quickly discovered they were spending far more than any measurable ROI could justify. Within three months, both OpenAI and Anthropic were already planning 'drastic' price cuts on an already-unprofitable service. The author also covers Anthropic's regulatory crisis over its Mythos/Fable models being shut down by the US government on national security grounds, and uses a KPMG report riddled with AI hallucinations as evidence that AI adoption is driven by FOMO and executive groupthink rather than genuine value. The conclusion is that generative AI lacks a viable business model, that training costs are ongoing and unavoidable, and that the entire industry is a subsidized grift propped up by venture capital and hyperscaler infrastructure.
