Premium: AI Isn't Too Big To Fail
anthropic openai startup
| Source: Mastodon | Original article
A new premium analysis released this week argues that the AI sector’s rapid expansion does not make it immune to collapse. The report, authored by venture‑capital analyst Maya Løken, estimates that the industry generated roughly $65 billion in revenue in 2025 – a figure that, crucially, reflects top‑line sales rather than profit. Løken breaks the number down: about a third stems from OpenAI and Anthropic’s contracts with hyperscalers and niche cloud providers such as CoreWeave, while a “billions” flow from VC‑backed startups that have yet to achieve sustainable cash flow.
The study’s headline claim – “AI isn’t too big to fail” – is backed by a series of case studies. Netflix’s recent use of generative AI to insert a complex, cost‑prohibitive scene into a series illustrates how even deep‑pocketed media giants are still experimenting with fragile, unproven pipelines. Parallel research from Fast Company shows that two‑thirds of frontline workers struggle to adopt AI tools, and that trust deficits routinely derail rollouts. Small‑business surveys echo the same pattern: more than 20 % of new firms fold within a year, and many cite AI‑related cost overruns as a contributing factor.
Why the argument matters now is twofold. First, investors are pouring capital into a landscape where revenue growth masks thin margins and heavy reliance on a handful of cloud providers. Second, policymakers are beginning to scrutinise the systemic risk of a sector that could see a wave of bankruptcies if funding dries up or if regulatory constraints tighten.
Looking ahead, analysts will watch the upcoming earnings reports of OpenAI’s and Anthropic’s cloud partners for signs of margin pressure, while venture firms are expected to tighten due‑diligence on AI‑only startups. Regulators in the EU and the US have signalled intent to tighten oversight of AI‑driven services, a move that could accelerate a market shake‑out. The next quarter should reveal whether the industry’s size can indeed shield it from the classic cycles of boom and bust.
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