Anthropic and OpenAI Have Begun The Subprime AI Crisis

AI companies like Anthropic and OpenAI are operating at massive losses while subsidizing their services, creating what's termed a 'subprime AI crisis.' Anthropic expects to lose $3 billion in 2025 despite $4 billion in revenue. The popular AI-powered coding tool Cursor has grown rapidly to $500 million in annual recurring revenue, but its success depends on these loss-making AI models. As AI companies eventually raise prices to achieve profitability, dependent services and startups may face unsustainable costs, potentially triggering industry-wide disruption.