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openai burns the boats - by Ethan Ding - mandates

substack.com · 1,827 words · saved by 1 readers

by mid-2025, anthropic had done the impossible. they'd taken 32% of the enterprise llm api market from openai. up from 12% just eighteen months earlier. inference was profitable for anthropic. not "path to profitability." not "unit economics positive." actually profitable, according to an interview with their ceo now if this is true for anthropic, this could also be true of openai — making a world where training models and providing inference, could see ec2-like margins over the long term then last week, openai dropped gpt-5 at $10 per million tokens at almost 10x cheaper than anthropic’s flagship and on par in performance benchmark, it’s openai’s declaration of its willingness to destroy the margins in “training and delivering” inference. so, why? to understand this, we need to first understand why disneyland makes parking free recommended reading: Joel Spolsky: https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/ Gwern: https://gwern.net/complement joel spolsky wrote about th

openai office, circa july 2025 by mid-2025, anthropic had done the impossible. they'd taken 32% of the enterprise llm api market from openai. up from 12% just eighteen months earlier. inference was profitable for anthropic. not "path to profitability." not "unit economics positive." actually profitable, according to an interview with their ceo now if this is true for anthropic, this could also be true of openai — making a world where training models and providing inference, could see ec2-like margins over the long term then last week, openai dropped gpt-5 at $10 per million tokens at…

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