The more I see of frontier lab economics, the less it seems like the earlier predictions on how they will grow hold.

This imbroglio looks like a point in the journey for a firm that is realizing it is not going to make money selling shovels during a gold rush, and that it has more to gain from just… being vertically integrated across an industry.

Open models have definitely hampered the ability to sell tokens at a premium, so mass market adoption is impossible.

But then take someone like Jane Street, for example. They self report making $30bn leveraging LLMs. It’s a defensible assumption that they are making profit on it.

Perhaps it’s more profitable for OpenAI/Anthropic to build their own funds. They have the capital, compute, they can afford to recruit teams and buy any IP/Data required.

This isn’t a fully fleshed out argument, but it is the first time it feels like the winds are changing.