Apollo Economist: Nvidia's 41% Margins Rely on Model Makers' Negative 59% Burn
mkheck · x · 2026-08-12
Apollo's chief economist Torsten Slok put hard numbers on the AI industry's inverted economics: chipmakers are booking a 41% profit margin, while model makers like OpenAI and Anthropic run a negative 59% operating margin.
He highlights that the massive cash burn at model layers is funded by investors rather than customers. This means the profitability of the chip layer entirely depends on the least profitable model layer remaining financeable.
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