Anthropic and Cursor both claim $1 billion in revenue, but that money largely overlaps. For multiple AI giants to coexist profitably, the total market needs to expand dramatically, or competition for the same dollars will become brutal.
I don't think that's going to stop then the interesting thing about that, there's a ton in answer to unpack but I just want to highlight the you have to be good sentence because when we're going to talk about all the oh what happens to sass and all that, I think Mike's big picture comment we should remember every time it turns out if you want to make a lot of money you have to be good. Right? And you have to compete with everyone else for the same dollars. And my guess is that will be a recurring theme. It's not impossible to succeed. Just quote unquote have to be good. There's such a lot of complexity here because you're right, you have the margin stacking. So a classic example is you look at Anthropic, it's doing a billion dollars in revenue. You look at Cursor, it's doing a billion dollars in revenue but it's pretty much the same billion dollars. So you have to think about the margin stacking. Then on the other hand you have to say to yourself if, say if Andropic hypothetical was doing $100 billion and all of it was through third party ISVs that were also adding value and getting more money on that, it would point to the end market would have to expand a lot. If everyone's going to eat and grow, you're going to have to buy into big TAM expansion. And you're right, software's growing nicely over the years. My guess is for this kind of growth you probably need more than the trend line of the last 20 years. You probably need some acceleration on top just because the numbers are so big. I mean if entropy goes from four and a half billion to and I'm not for a second thing, I think they will. It's just like their number to 150 bill. In a world where Microsoft does 200 bill you're basically saying to a rounding error and Tropic is another Microsoft. OpenAI is another Microsoft and that's two more Microsofts which are pretty voracious mounts to feed out of the same pile of cash. There better be more money coming or it's going to get pretty short around here.
