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Ed Zitron
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Ed Zitron
Callzone Media hello and welcome to a special exclusive episode of Better Offline. I'm your host Ed Zitron. Better Offline As a result of discussions with sources and documents viewed of the amounts billed on Amazon Web Services I am for the first time in history able to disclose how much AI firms are spending on aws, specifically Anthropic and AI coding company Cursor, its largest customer for API services. I can exclusively reveal today how much Anthropic spent on AWS for the years 2024 and from the beginning of 2025 through the end of September 2025. And from what I can see, the compute spend may vastly exceed what has previously been reported. Furthermore, I can confirm that through the end of September 2025 Anthropic has spent around 100% of their revenue in 2025 on Amazon Web Services, spending $2.66 billion on comp $2.55 billion in revenue. Go to the newsletter I sourced the whole goddamn thing. And if I'm honest, this piece is the culmination of several months of articles about how Anthropic's business tactics have made me turn the screws on their biggest customer. I can exclusively reveal today as well as many other numbers in the newsletter. The cursor's Amazon Web Services bills doubled from $6.2 million in May 2025 to $12.6 million in June 2025 and have stayed inflated since Anthropic increased the costs with the launch of Priority Service Tiers, an aggressive rent seeking measure. I need to be clear, I cannot 100% guarantee that's what did it. I'm going to hedge my bets very hard on that, but it certainly bloody well seems that way. It's my gut instinct. I'm not going to say it declaratively, but I'm going to show you why I believe this. And I admit I struggled with how to turn this into an episode because the newsletter, which is on my free feed, is a series of numbers and analyses that if I just read them aloud would sound extremely dull and at times be quite hard to follow. It's not something that naturally plays well for radio. So instead of giving you the audible version, I'm going to give you the Cliff Notes and speak to a degree of vindication I feel on reading these costs. So let's start with a number. $1.225 billion. That's how much Anthropic spent on Amazon Web services in the third quarter of 2025. They spent $829.7 million in Q2 2025 and $610 million in Q1 2025. Oh, and one other number, they spent $1.35 billion on AWS in 2024. So yeah, just in another way. Talking of their 2025 numbers, anthropic spend on AWS doubled over the course of 3/4 now, a little backstory about Anthropic that's necessary to understand this fully. Anthropic was originally invested in by both Google and Amazon. According to the New York Times, Google owns around 14% of the company, and analysts estimate Amazon owns somewhere between 15 and 18%. And both have, in not so many words, said that they the main or primary compute partner for Anthropic. It's unclear how much Anthropic spends on Google Cloud, but Semianalysis believes they're a big client, and that's about as much detail as I can get from anywhere I've really looked. In any case, Anthropic is spending effectively every dollar they make on Amazon Web Services, and Amazon appears to be booking this as revenue, though I can't directly confirm that, though I do know these numbers are cash. They're after credits, though. In the recent months, Anthropic has lowered the amount of revenue they're spending on it to 86.2% in Q3 2025, which is an improvement from Q2 2025, where they spent 106% of their revenue, and Q1, where they spent 175% of what they made on Amazon Web Services. It's quite horrifying when you say it out loud. Now, if you're thinking that because these numbers are quite close, that this might suggest that Anthropic's costs are improving, think again. Anthropic's Amazon Web Services costs have a habit of massively spiking. For example, their AWS bill leapt from $183.7 million in August 2025 to $518.9 million in September 2025. That's 135 million goddamn dollars. And my hunch is it's because they have a massive problem where Claude code users are each costing them thousands of dollars despite only paying 100 or $200 a month. There's also the nasty matter of Google Cloud. Anthropic's Amazon Web services bill is $2.66 billion from January through the end of September, as I said. And that is pretty close to $2.55 billion in revenue, which is but if Anthropic spend on Google Cloud was only 25% of what they spent on AWS, its compute costs would jump to $3.33 billion through the end of September. Way more than it brings in. If it's half of what they spent on Amazon Web Services, this becomes a $3.99 billion compute bill and if they spend the same amount, the bill becomes $5.3 billion. And again, that's just through the end of September. Another note, Cursor spend on Amazon Web Services is comparatively small, but includes some spend on Anthropic's models because Amazon is and I believe that the reason that they do this, because they do directly pay Anthropic, like they actually send money directly to them, is because Amazon offers significant discounts in some cases for running models through their service. I think it's their bedrock service and my source confirmed that this was the case, though I could not get granular data on what exactly Cursor's spend was on Amazon. Like I can't say, oh they use this model or that model Now Cursor spends most of their compute money directly with Anthropic, as well as every other model developer whose models they use. AWS is a small piece of the puzzle, and while small, its spending data provides evidence of how much this shit actually costs, Though I also concede that some of the money Cursor spends with AWS likely goes to the non AI part of the business like file hosting and other tech infrastructure. Nevertheless, the timing of the massive jumps in Cursor's aws bill from $6.2 million in May to $12.6 million in June directly correlate with the massive changes made to their product, increasing the costs on any users that wanted to use Cursor in the way they had in the past by making them face costs of serving models on a per million token basis. I've written about this a lot by the way. It's hard to describe in detail because it's going to take forever, but around mid June Cursor had to change everything because mysteriously they had to stop spending so much money with their customers. Their customers are burning a hole in their pocket, and I think we can kind of see why. Cursor's costs have also never come down, spiking to a high of $15.5 million in June, dropping to a still high $9.6 million in August, only to spike again to 12.9 million DOL in September. Though I cannot declaratively state that this is exactly what happened, Cursor's costs doubled immediately following the addition of Anthropic service tiers in late May 2025, which require an upfront commitment of token spend and token throughput and when Cursor announced the launch of their $200 a month ultra plan amidst massive product changes, they cited how it was and I quote, made possible by multi year partnerships from OpenAI, Anthropic, Google and Xai and that their support was instrumental in offering this volume of COMPUTE at a predictable price.
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Ed Zitron
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Jacob Goldstein
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Ed Zitron
Now really, I'm being as fair as I can. Another factor might be that the new Claude 4 models were significantly more expensive. It's entirely all of these things are true. I just want to make sure I cover my bases because I do not know for sure, but the timing. The timing man. And another thing. You know what? Anthropic also launched a week before service tiers, a competing product to Cursor called Claude Code. One that they could run with as little restraint as they'd like to drain as many monthly customers away from Cursor, who is also their largest customer buying Anthropic models through their API. Real fucking mystery, right? If it quacks like a duck wears a T shirt that says duck and Claude tells you, you're absolutely right, that's a duck. When you upload a Picture of it, it's probably a fucking duck, but I obviously can't say for sure. I need to be explicit here with what happened, though. Anthropic supplied access to their models to a company Cursor and then released a product claude code that did exactly the same thing as that company cursor, turning it both into a customer and a competitor, in the process creating a massive conflict of interest, as not only did Anthropic have an incentive for that customer or competitor to fail, though, they also needed their compute revenue, which is kind of a bugger. Anthropic also had the means to make this failure happen in the most painful and expensive way possible by worsening the terms in which that competitor acquired the compute it needed to function. Could be a coincidence, I guess. And when I say compute, I mean tokens. Just. I'm reading a script. Okay, one of you is gonna email. Anyway, I'm not gonna turn this into a massive, sprawling episode about this company. I wanted to give you the raw information so you can go and read the detailed analysis I did. It's free, by the way, don't worry. But now I want to talk about how all this made me feel, because that's what makes this show unique and I think is the appropriate way of coming at this. I'm going to be honest, I find what it looks like, and I'm hedging my bets again. Anthropic did to Cursor. Truly disgusting. Cursor hit $500 million in annualized revenue in the same month that they then saw their costs double, dramatically reducing the value of their subscription product at the apex of their success. Yes, Cursor is an unsustainable AI company I know. And like all of these companies, has no path to profitability. Anthropic should have always charged sustainable rates, even if it meant that it wasn't possible to build a big company based on their models. Sadly, we don't live in that universe. And while you could make the case that startups like Uber didn't at first charge sustainable rates, I'd argue that the reason why its initial rates weren't successful was because of the steep upfront cost of customer acquisition, which is a problem that could be solved through the lifetime of the customer. And Uber had the means to gradually ratchet up the costs of rides or more shittily reduce the cut that they pay to drivers in a way that wouldn't be immediately painful. Furthermore, Uber never had a fuel problem. What Anthropic has is a fuel problem. They have a Compute problem for the amount that they're paying to run their goddamn services. Cursor is also Anthropic's largest customer, and the timing of priority tiers to coincide with the moment when they were growing fastest is a suspicious and potentially disgraceful move. While you could describe it as a necessary step in the direction of sustainability, that plausible excuse is undercut by the overall timing of the movement. One cannot ignore how close the launch of these tiers were to the launch of Anthropic's clawed code, a product that lacks Cursor's flashy front end but performs similar functions, all subsidized by Anthropic's massive hoards of venture capital and its chummy relationships with hyperscalers like Amazon and Google. The thing is, even with these moves, anthropic still spent $1.04 on Amazon Web services for every dollar they made through the end of September 2025. And that's for just 2025, by the way. Their costs increased linearly with their revenue. And while they've improved when they spent remarkable 227% of their revenue on AWS in January, they still spent 88.9% of it on AWS in September. Now, if you're worried, hearing how close these numbers before, like I said, means they're somehow approaching profitability. Good Lord, no, I'm repeating myself, I realize. But I really need you to come away with this reality in your brain. These digital Mr. Beans very likely spend comparable sums on Google Cloud and likely another billion or two on salaries data. And I don't know that $1.5 billion settlement with all the authors that they just agreed to. This company absolutely fucking sucks. I don't care if you like Claude Sonnet or Claude Opus, I don't give a fuck. Claude Opus and Claude Sonnet are not worth burning billions of dollars a year in cloud costs fueling an environmentally destructive, plagiarism charged pseudo company that would roll over and die within months if it didn't constantly get fed billions of dollars a year. What are you going to tell me? They're going to turn this ship around? They're going to make some sort of autonomous AI coder? You know that's bullshit. Every goddamn one of you boosters knows that. Total bullshit. I'm sure Sonnet 4 better than Sonnet 4, but what does that actually mean? Anthropic raised $20 billion this year. Do we give them more next year? I've heard reports that they're actually targeting $20 billion in annualized revenue. So $1.67 billion a month in revenue by the end of next year. It's an absolute fucking joke. But the only thing funnier than that joke is that it will likely cost them $25 billion to make that fictional money. And where, pray tell, is that coming from? And why?
Ed Helms
Why?
Ed Zitron
What is so remarkable about this company that gives them a free pass to burn $2.66 billion on AWS in fucking nine months? I'm not talking about your cynical oh, Amazon is booking its revenue. Crony capitalism's here. Answer. I'm not. I'm not. I'm talking about the scientific or technological reasoning for keeping Anthropic alive. And yes, I feel exactly the same way about OpenAI. What possible achievement does Anthropic have that warrants this needless endless sprawling financial destruction? Why are we rewarding a company business practices for making a product that loses more money the more money it makes? I'll even try and see this through the eyes of an AI booster. Damn, all I'm seeing is blue and yellow anyway. And even from here, the only reason to keep Anthropic alive is because you see these companies as sports teams. You see Dario Amadei as the equivalent of Dan Campbell or Gregg Popovich. You root for them and their causes because you think that if they win, you as a fan will be rewarded. You don't think too hard about what it is that Claude Sonnet or Claude Opus do, and you find enough ways that this is somewhat kind of useful to you, and you use those reasons to justify the proliferation of a wasteful and destructive technology. What exactly happens here? Anthropics AWS bills are not really going down. They've normalized in an 88 to 95% range and they're clearly going to stay there. And if your argument is they'll go down, your argument is quite literally nuh. Go read semi analysis for 17 hours and come up with some demented GPU based argument about inference max scores, pretend like you give a shit, come up with a real argument against mine because I am working harder at this than you are. And if you believe otherwise, you should ask yourself why the guy who said Sam Altman's no it loads refused cash dump in a premium newsletter got this scoop and you did not. But that actually leads me to a key question. How long do we hand Anthropic and by extension OpenAI billions of dollars? And for the first time in your goddamn life, it's time to ask what if I'm right? What if these companies are incapable of becoming profitable. What if there really is no massive demand for generative AI? Do you really think Anthropic will make $1.6 billion a month sometime in 2026? Do you really think that? And even for Amazon, it's kind of shitty. Wow. Couple billion on $105 billion of capex. I might have even said this later in the script, but just thinking about it makes me feel a little crazy. And look, I get there's a middle ground here where people say that there's some sort of use case that sort of works for AI, where you hit it hard enough or write good enough prompts or whatever, that you like it for search, that you brainstorm with it, that helped you pick out a hat, that you used it to solve some sort of problem once. And I just want to ask you how much are those anecdotes really worth to you? How impressed with these things are you? Would you pay double, triple, quadruple? Would you pay on a metered basis where those little flights of fancy cost you a few cents, then 10 cents, then a dollar? Because that's how much it costs to provide these services and at some point you're going to be made to pay for it one way or another.
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Ed Zitron
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Jacob Goldstein
This is Jacob Goldstein from what's yous Problem? Business software is expensive. And when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory to accounting. All linked and talking to each other. Check out Odoo at O D O o dot com. That's O D O o dot com.
Ed Helms
Hey everyone, Ed Helms here and hi.
Ed Zitron
I'm Cal Penn and we're the hosts of Irsay, the Audible and I Heart Audiobook Club.
Ed Helms
This week on the podcast, I am sitting down with Jenny Garth, host of the iHeart podcast. I choose me to discuss the new Audible adaptation of the timeless Jane Austen classic Pride. And this is not a trick question. There's no wrong answer. What role would I play?
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Ed Zitron
I can see you as Mr. Darcy.
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Ed Helms
Okay, that's really sweet. I appreciate that. But are you sure I'm not the dad? I'm not Mr. Bennett here. Listen to Earsay the Audible and iHeart Audiobook Club on the iHeartradio app or wherever you get your podcasts.
Ed Zitron
Advertising won't be the answer. By the way, the literal only company to try advertising in large language models is an AI search engine company called Perplexity. And they just paused accepting new advertisers too. And I quote adweek rethink how ads fit into its AI search experience. They made $20,000 in 2024 in advertising revenue. Are we supposed to be impressed that Perplexity made enough revenue to buy a second hand Toyota Corolla? There are people making more money than that slinging fucking Herbalife. And this is literally the exact company that should have succeeded based on any kind of ads will fix everything argument. And they couldn't even buy courtside tickets at the NBA playoffs. The costs are increasing linearly with revenue and I fucking proved it. I am open to any compelling arguments that can explain how this ever changes. And my God if you say trainium I will absolutely lose my shit. Chips aren't fixing this. And by the way, if your answer is that anthropic will make some sort of theoretical ultra powerful large language model or invent AGI, you are a goddamn mark. You are being conned. Look, join me. I'm serious. There's no harm in being wrong. I've been wrong tons of times in my life. Being wrong and admitting you're wrong is an act of bravery. Shit, I actually kind of get it. This stuff feels, if you let it, like it's doing something for you, even though interacting with it is actually draining you because you're constantly having to find ways to make it do what you want it to do to the point that when it actually does something for the first time, it almost feels magical. You feel very powerful despite the fact that you have been put to work to make automation work. That's not how automation is meant to work. And sure, there are software engineers out there who have, like any good software engineer, found a way to take the useful parts of LLMs and use them too. To quote Carl Brown of the Internet of Bugs, make the easy things easier. Then there are the ones that are spending more time than they would building software, prompting LLMs and rewriting claw MD files and thinking that because things sort of worked after they hit enter that they're privy to a great becoming. And there are the victims, of course, of vibe coding startups, companies that sell the outright lie that somebody who cannot read or write software can write secure, effective and functional software. Look, I'm serious. Join me. If you're an AI booster, I don't care. Everybody is welcome. In reality, I don't care who you are. I don't care if I've called you a booster and given you a verbal swirly a hundred times. Now is the time to accept that this software is Too expensive, too destructive and too wasteful to continue backing it. I'm not even saying you have to say fuck AI or shun chatgpt like you're an Amish teenager that looked at porno. But it's time to be loud and direct that these products are not worth the egregious and perpetual annihilation of billions of dollars every fucking year. I don't even know if this means you have to stop using them. I don't want you to, but I don't like what are we gonna do? These things are not gonna go away because you stopped using Claude. They're gonna go away because you stop talking about them. They're going to go away because they cost too much and their pay pigs stop paying them. What I am advocating for is for everybody to openly discuss that the amount of money it costs to run these companies is at odds with what they have built, are building and will build in the future. Nothing they are building is moving towards superintelligence or AGI. No combination of Amazon, Trainium or Google TPUs is going to usher in the birth of the machine. God. The products they make are at best and in inconsistent moments kind of cool, but a hundred times more often mediocre, unreliable and outright ridiculous. Even if you really get a lot out of these models, do you think that these companies should be allowed to burn billions of dollars every year? How much do you think they should be allowed to burn and how much is too much for you? It's time to start having this conversation and having it publicly. Especially as clammy Sam Altman bloviates about building 250 gigawatts of data centers in seven goddamn years at the cost of one third of America's entire fucking economic output in 2024. Anyway, this has been a big day for me, so I'm gonna leave it there. It's a huge scoop. I'm grateful that I get to do this every day. Grateful for you listening. I'm grateful for you reading. I hope you've enjoyed this episode and thank you as ever, for supporting my work. Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matosowski. You can check out more of his music and audio projects@matosowski.com m a t t o s o wski.com you can email me at ezetteroffline.com or visit betteroffline.com to find more podcast links and of course, my newsletter. I also really recommend you go to chat. Where's your Ed to visit the Discord and go to R betteroffline to check out our Reddit thank you so much for listening. Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, Visit our website coolzonemedia.com or check us out.
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Ed Zitron
This is an I heart podcast.
Host: Ed Zitron
Network: Cool Zone Media / iHeartPodcasts
Date: October 20, 2025
Episode Theme: A revealing, data-driven exposé into the staggering cloud computing costs behind Anthropic, one of the leading AI firms, and the business and ethical implications for the entire generative AI ecosystem.
In this special, investigative episode, Ed Zitron presents exclusive data on Anthropic’s actual spending on Amazon Web Services (AWS)—pulling back the curtain on the real economics underlying the most-watched generative AI companies. Zitron dissects confidential cost figures, explains why they matter for the future (or demise) of AI startups, and interrogates the murky, rent-seeking business tactics employed by tech power players like Anthropic, Amazon, and Google.
On the absurdity of costs:
“These digital Mr. Beans very likely spend comparable sums on Google Cloud and likely another billion or two on salaries … This company absolutely fucking sucks. I don't care if you like Claude Sonnet or Claude Opus, I don't give a fuck.”
—Ed Zitron, [17:00]
On Cursor’s predicament:
“Cursor hit $500 million in annualized revenue in the same month that they then saw their costs double, dramatically reducing the value of their subscription product at the apex of their success.”
—Ed Zitron, [15:12]
On business model futility:
“The only thing funnier than that joke is that it will likely cost them $25 billion to make that fictional money. And where, pray tell, is that coming from?”
—Ed Zitron, [17:52]
On AI ad revenue hype:
“Are we supposed to be impressed that Perplexity made enough revenue to buy a second hand Toyota Corolla? There are people making more money than that slinging fucking Herbalife.”
—Ed Zitron, [25:39]
On the AI industry’s supposedly heroic narratives:
“No combination of Amazon, Trainium or Google TPUs is going to usher in the birth of the machine God. The products they make are at best and in inconsistent moments kind of cool, but a hundred times more often mediocre, unreliable and outright ridiculous.”
—Ed Zitron, [30:16]
| Timestamp | Segment Summary | |---|---| | 02:26 | Ed Zitron introduces the exclusive AWS spend revelations. | | 04:30–08:40 | Details and analysis of Anthropic’s costs; deep dive into Cursor’s surging AWS bills and service tier impact. | | 13:26 | Explains Anthropic’s product/partner conflict with Cursor. | | 15:00–17:47 | The business model critique: lack of profitability, compute cost scaling. | | 18:34 | Asks what scientific or technological achievement justifies the ongoing investment. | | 25:39 | Explains why ad-based model is a non-starter for generative AI. | | 29:00 | Final call to action for honest public conversation on value vs. cost in AI. |
Zitron is direct, unsparing, and often caustic—combining sharp economic analysis with dark humor and explicit exasperation at tech industry excess. He acknowledges hedging certain inferences with “I can’t say for sure,” but ultimately delivers a scathing indictment of business models predicated on endless subsidized growth.
If you want the raw numbers and detailed breakdowns, Ed Zitron recommends reading his newsletter, freely available—he’s happier giving away this scoop than seeing the tech establishment paper over the structural rot.