Nilay Patel

Hello, and welcome to Decoder.

I'm Neil Apatow, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems.

Today, let's talk about the looming AI monetization cliff, and whether some of the biggest companies in the space can become real profitable businesses before they careen right off it.

My guest today is Hayden Field, who's our senior AI reporter here at The Verge, and she's been keeping close tabs on both Anthropic and OpenAI, and how those two companies in particular tell us a whole lot about the AI industry as a whole in 2026.

You've certainly heard a version of the monetization cliff story before.

Anthropic, OpenAI, and all the other big AI startups are built off the back of hundreds of billions in capital investment.

And they're linked to even greater amounts of forward-looking investment in data center build-out, chips, and other infrastructure spend.

At some point, that return has to pay off, the profits have to materialize, or the bubble pops.

Maybe AGI arrives, maybe the economy crashes, who knows?

If you've been listening to The Coder, you've heard me talk about this with tons of CEOs right here on the show, and a majority of them have hinted towards the bubble popping.

They think some companies will fail in spectacular fashion and others will succeed, but that the opportunities, and especially the money, are simply too big to ignore.

The AI industry is going to do this, whether we want it to or not.

The market depends on it.

And so these last few weeks have felt like a very important inflection point, as both Anthropic and OpenAI have started to react to the reality of needing to go public to make money.

The catalyst for all this change is the rise of AI agents, products like Cloud Code and Cowork, the open source OpenClaw, and OpenAI's Codex.

They've all radically changed how these companies are thinking about their resources.

And that's starting to affect how they behave, the products they support or suddenly kill, the restrictions they impose on customers, and the money they're willing to burn on the way towards your next big milestone.

That's because agents are valuable to customers right now, but agents also use far more compute.

And so the way people are using agents is burning tokens at a rate way faster than these companies anticipated.

and that's causing them to make hard decisions.