Enterprise Weekly #527: Defensibility in AI, New Agentic Systems Drop, and More
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In the age of AI, defensibility remains the big question for many startups.
This week, news surfaced that AI coding giant Cursor is operating with negative gross margins despite doing more than $500M in annualized revenue.
To put their challenging unit economics in perspective, every time developers use Cursor to generate code, the company pays the piper. In this case, it’s consistently footing a large bill to Anthropic and the company’s costs are greatly exceeding the $20 monthly subscription for its Pro plan.
This comes at an interesting time where Anthropic’s Claude Code is gaining traction and even instituted weekly rate limits for Claude Pro and Max.
While both Cursor and Claude Code are experiencing tremendous usage, power users are driving disproportionate compute costs for both companies. These customers pay the same subscription price as everyone else, but use the product so heavily that it throws the unit economics out of balance.
Reading between the lines, Cursor’s outsourcing its LLM capabilities, arguably the most valuable part of their product, to its biggest competitor, putting themselves in a very tricky situation. As the code editing space heats up, we’re wondering if Cursor can build their own model that competes with Anthropic, or if they’ll forever be at the mercy of the research lab overlords.
Whether you’re Cursor or Anthropic, delivering AI at scale is far from cheap and growth comes at a cost. Sooner rather than later, this will have to be reflected in prices. Cursor’s existential risk of relying on third-party models comes at a cost, while Anthropic needs to spend a significant amount on compute to serve that inference. OpenAI has notably 15x’d their compute since 2024, and Sam Altman has said that they’re planning on doubling compute in the next few months.
That being said, innovation in the infrastructure layer has always helped bring improvements in efficiency and democratize use-cases that were previously cost-prohibitive. Speaking of agentic infrastructure, our teammates Priyanka and Proby just released the July edition of their State of Agentic Systems newsletter, where they dive into advancements in context engineering, agent planning and delegation, and model training. Give it a read!
📚 Read more news:
WSJ: OpenAI’s Rocky GPT-5 Rollout Shows Struggle to Remain Undisputed AI Leader
TechCrunch: Perplexity’s bid for Google Chrome could be just the beginning
VentureBeat: Gartner: GPT-5 is here, but the infrastructure to support true agentic AI isn’t (yet)
Bloomberg: CoreWeave IPO Investors Sitting on Big Gains Get Chance to Sell
WIRED: Inside Dylan Field’s Big IPO—and His Even Bigger Plans for Figma
🧵 Read more threads:
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