Patel argues AI business transformation has severe upfront spend spike then major cost efficiency gains.
“Like you spike up on spend a lot for the one time and then you spike down a lot and your cost efficiency is way better.”
Patel reports Anthropic achieved profitability and positive free cash flow in April and May 2025.
“Anthropic is free cash flow positive, and they are profitable in q two. Even in April. In April, they closed April's books. They were profitable.”
Patel calculates $100B AI revenue requires $250B infrastructure with five-year depreciation at 50% margins.
“That $50,000,000,000 of COGS needs to burn on infra, which cost roughly with if a five if you're talking about five year depreciation, call it $250,000,000,000,”
Patel argues most AI value accrues to users, not to companies building or deploying AI.
“But most of the AI value that's been generated does not accrue to the companies building the AI or deploying it. It actually deploy it actually accrues to the user.”
Patel argues open source AI lacks software's feedback loops because reusing models requires significant compute and expertise.
“fundamentally, I would say that that's because open source AI does not have the same feedback loops as open source software.”
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https://x.com/dylan522p/status/2092723645164724225
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https://x.com/dylan522p/status/2090909375057859015
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https://x.com/dylan522p/status/2089933933203075349
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https://x.com/dylan522p/status/2090426718582706447
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https://x.com/dylan522p/status/2086333447556227503