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As intelligence becomes commoditized, Anthropic and OpenAI will be fine because they already have among the lowest costs per unit of frontier-quality intelligence, and being on the frontier positions a lab to dominate non-frontier markets as well.

Thompson's central economic argument: frontier labs' superior cost structure and head-start on capability mean they should thrive even as intelligence commoditizes, making fears about Chinese models overblown. ✦ AI generated

Ben Thompson · Stratechery · 2026-07-20 · original ↗

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Anthropic and OpenAI likely have among the lowest costs per unit of frontier-quality intelligence, thanks to model capability, serving scale, and token efficiency. They are serving models at a particular capability level for months before their competitors, and are simultaneously applying the best models to optimizing those costs.

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▦ Anthropic ▦ OpenAI

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Counterpoint · 1

Anthropic and OpenAI are raising and spending enormous sums to build the most powerful AI models just as competitors release comparable models far more cheaply, creating a price war at the worst possible moment—right as their IPO window opens.Alex Kantrowitz · Big Technology · conf 75%

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rebuts → Frontier AI labs are caught in a 'capex trap' where massive data-center and compute spending forces them into a 'toll road' business model that charges for every use of the model, and this won't survive competition from cheaper open alternatives like Chinese models.Zeve Farman · The Cognitive Revolution extends → Tokens are not a commodity, since different models need different amounts of tokens to reach a correct answer; what is actually fungible is the intelligence (the correct answer) that tokens produce, not the tokens themselves.Ben Thompson · Stratechery extends → Marginal costs are back in a big way for AI, both in the short-term implications of state-of-the-art free/cheap models and in the long-term structure of the industry.Ben Thompson · Stratechery