Who Owns the Generative AI Platform? ↗
yesEditorial Notes
The essential read for anyone building AI cost models or unit economics projections. a16z analyzes where value accrues across the generative AI stack and finds a counterintuitive pattern: infrastructure vendors (especially Nvidia) capture the most value, while application companies face 50-60% gross margins because inference costs consume 20-40% of revenue. For technical leaders, this reframes AI product economics fundamentally — your AI feature isn’t a software feature with near-zero marginal cost, it’s a service with real per-query costs that scale with usage. The article provides concrete benchmarks for cost structure planning that you can hand to your CFO with context. Compare these macro-level economics with the per-token pricing from Anthropic and OpenAI (covered in other paths) to build a complete picture from unit cost to gross margin.