LLM companies (OpenAI, Anthropic, Google, xAI, plus Cursor and open-source) are on track for $200-400 billion in aggregate ARR by end of this year at high margins, proving strong ROI on AI infrastructure — currently being achieved on the strictest possible definition excluding the most profitable use cases.

Gavin Baker presents data that the private LLM industry (including Google) is heading toward $200-400B ARR with ~80% inference margins, demonstrating real returns even excluding GPU-driven improvements in ads and recommendations at Facebook, Amazon, and Google. ✦ AI generated

Gavin Baker · All-In Podcast · 2026-05-22 · original ↗

the success is extraordinary. It's undeniable. I think the fact that they are now, they were EBIT positive per the Wall Street Journal in the most recent quarter is a really important fact for kind of the whole AI narrative. Because now there's you could talk about circular funding, you could talk about ROI, and we could go look at the ROIC of the hyperscalers. But if OpenAI and Anthropic are at, call it $100 billion of ARR now with 80 percent-ish gross margins on inference, like the returns are there. And then if we add in, and they're growing really fast, if we add in Gemini, we add in Cursor, we add in XAI, we add in open source, you know, it's not hard to see 200, 300, $400 billion of ARR at the end of this year at high margins.

verbatim transcript · starts at 4:34