Ed Zitron: Anthropic Is Bleeding Out (July 10, 2025)
AI and technology critic Ed Zitron explores the possibility that Anthropic’s pricing model is insufficient for long-term sustainability. His predictions are bleak for the company.
AI IDE Cursor recently upped their prices, passing along Anthropic’s prices increases of late May 2025.
What I have described in this newsletter is one of the most dramatic and aggressive price increases in the history of software, with effectively no historical comparison. No infrastructure provider in the history of Silicon Valley has so distinctly and aggressively upped its prices on customers, let alone their largest and most prominent ones, and doing so is an act of desperation that suggests fundamental weaknesses in their business models.
I do take some issue about how Zitron frames the price increases. I remember when Netflix effectively upped their prices by 60% when they split the streaming and DVD portions of their business. Rapid price hikes to happen in technology companies.
Nevertheless, there’s one much, much, much bigger problem: Anthropic is very likely losing money on every single Claude Code customer, and based on my analysis, appears to be losing hundreds or even thousands of dollars per customer.
The reality is that developers are quite adroit at pushing the limits of technology, finding clever ways to maximize what they get out of subscriptions. It seems like Anthropic needs more developers on their platform, particularly ones who aren’t very active programmers.