Techmeme Ride Home: Thu. 07/17 – AI Pricing
Host: Brian McCullough
Release Date: July 17, 2025
Brian McCullough delivers a comprehensive overview of today’s pivotal tech news, diving deep into the persistent growth in AI infrastructure, regulatory advancements in the cryptocurrency sphere, the financial health of leading AI companies, Microsoft’s challenges in the AI marketplace, and the transformative impact of AI on pricing strategies within the airline industry.
1. TSMC Earnings and the Ongoing AI Buildout
Timestamp: [00:04] – [09:00]
Brian opens the episode by highlighting Taiwan Semiconductor Manufacturing Company (TSMC)'s robust Q2 performance, signaling continued momentum in the AI sector. TSMC reported a 61% year-on-year increase in net income, reaching $13.5 billion, surpassing quarterly estimates consistently since 2021. Moreover, the company raised its sales growth guidance from the mid-20% to 30% for the year.
Brian McCullough ([01:15]): "TSMC's move underscores resilient demand for high-end chips from the likes of Nvidia and AMD, which is outpacing its production capacity."
This surge is attributed to sustained investments from major tech firms such as Meta and Google, fueling the expansion of AI-centric data centers. The positive outlook has bolstered stock indices, with NASDAQ futures and ASML shares seeing noteworthy gains.
Investment strategist Billy Long from Global X ETFs emphasized the positive implications of TSMC’s results:
Billy Long ([04:30]): "For investors, TSMC results again ease fears of an AI slowdown. Margins hold, demand outlook good generally reinforces the AI buildout is still well underway."
TSMC’s CEO also confirmed the high demand for AI-related orders, dispelling rumors of potential spending cuts by tech giants, while also cautioning about uncertainties related to Trump administration tariffs.
2. Milestones in Stablecoin Regulation
Timestamp: [09:00] – [15:00]
Brian transitions to the regulatory landscape of cryptocurrencies, announcing significant progress in the United States House of Representatives regarding stablecoin regulation. After initial setbacks, bipartisan support saw the House advance key crypto bills following extensive negotiations.
Brian McCullough ([10:45]): "A bill to establish a federal framework for stablecoins is likely to be the first to be passed in what would be a watershed victory for the crypto industry."
The primary bill seeks to create a standardized framework for stablecoins, which are essential for crypto traders due to their stability and lower transaction costs compared to traditional banking. Additionally, the House is considering legislation to define the regulatory boundaries for crypto products, distinguishing them from securities under the SEC’s oversight.
A third bill, championed by conservative lawmakers, aims to prohibit the Federal Reserve from issuing a digital currency, addressing concerns over governmental overreach in personal finances. This bill awaits Senate approval.
3. Anthropic vs. OpenAI: Financial Performance and Market Position
Timestamp: [15:00] – [22:19]
The discussion shifts to the competitive dynamics between AI firms Anthropic and OpenAI. Recent data indicates that Anthropic is gaining traction, with investors eyeing potential funding at valuations exceeding $100 billion, a substantial increase from the $58 billion reported four months prior.
Brian McCullough ([16:30]): "While OpenAI was reportedly blowing the doors off the place in terms of revenue growth, maybe some of their peers were not. This news suggests otherwise, at least for Anthropic."
Anthropic has showcased improvements in its profit-related metrics despite significant cash burn, raising $3.5 billion in equity financing in March and planning to secure up to $5.5 billion this year. The company recently rehired two former leaders from its coding product division, signaling strategic moves to bolster its market position.
Financial disclosures reveal Anthropic’s gross profit margins are nearing 70% from 60%, primarily driven by direct sales of its AI models and the Claude chatbot. However, revenue through cloud providers like AWS and Google Cloud presents challenges, with margins reported at -30% due to significant revenue-sharing agreements.
In contrast, OpenAI projects a more optimistic revenue trajectory, aiming for $50 billion by 2027, compared to Anthropic’s $35 billion (base projection of $12 billion). Despite higher revenue generation, OpenAI maintains more efficient operations with lower cash burn.
Brian McCullough ([20:10]): "Anthropic's revenue increased four times in the first half of the year to more than $4 billion in annualized revenue..."
Anthropic's Claude chatbot, especially the Claude Code variant, has seen substantial growth, with weekly downloads surging sixfold to 3 million and contributing over $200 million in annualized revenue.
4. Microsoft’s Challenges with Copilot and AI Products
Timestamp: [22:19] – [35:00]
Shifting focus, Brian examines Microsoft’s AI initiatives, particularly the struggles of its Copilot branded products in gaining market traction against rivals like ChatGPT.
Guill Lauria ([25:50]): "They have to win this, if they don't, someone else will."
Microsoft’s Copilot encompasses three main products: a coding assistant for developers, a workplace helper integrated into Outlook and Word, and a personal assistant aimed at enhancing user interaction with AI. Despite ambitious goals set by CEO Satya Nadella to achieve widespread adoption, the actual uptake has lagged behind expectations.
Brian highlights a Bloomberg report indicating that while Copilot’s mobile app has 79 million downloads, it pales in comparison to ChatGPT’s 900 million. The underlying issue stems from technical and strategic challenges, including integration limitations within Windows’ infrequent update cycles and stiff competition from established mobile operating systems like Android and iOS.
Mustafa Suleiman, leading Microsoft's consumer AI operations, emphasizes a user-centric approach:
Mustafa Suleiman ([30:15]): "Artificial general intelligence is not our mission. Products are our mission, and we are singularly focused on: Is it useful? Does it help? Is it supportive? Am I happy?"
Despite efforts to position Copilot as a personable assistant appealing to younger users, Microsoft's approach of embedding AI into existing tools without overhauling interfaces has limited its impact. Additionally, enterprises display a preference for ChatGPT, leading to internal debates over which AI solution to adopt.
Sensor Tower data reveals Copilot’s monthly active users grew by 76% between April and June to 23 million, yet its annual growth rate trails behind competitors.
5. AI-Driven Pricing: Revolutionizing the Airline Industry
Timestamp: [35:00] – [45:30]
In a thought-provoking segment, Brian explores how AI is set to overhaul traditional pricing models, using Delta Air Lines as a case study. Delta plans to leverage AI to individually determine 20% of its fares by year-end, with aspirations to eliminate static pricing entirely.
Glenn Howenstein ([37:10]): "Eventually we will have a price that's available on that flight on that time to you, the individual."
Partnering with Israeli AI firm Fetcher, Delta aims to refine its pricing strategy, enhancing profit margins by dynamically adjusting fares based on real-time data and consumer behavior. This AI-driven approach has already yielded favorable unit revenues, positioning Delta as a pioneer in personalized airline pricing.
Industry expert Gary Leff comments on the significance of Delta's transparency and early adoption:
Gary Leff ([40:45]): "Delta is the first major airline to speak so publicly about its use of AI pricing...and offer concrete metrics around its use in its recent earnings call."
Brian speculates on the broader implications, drawing parallels to other low-margin industries like groceries, where differential pricing could become prevalent. He envisions scenarios where consumers might experience personalized pricing in physical stores through app-based interactions, allowing for dynamic price adjustments based on individual purchasing power and preferences.
Jack Handy ([44:00]): "So, I read this and in the shower my mind started spinning...But I do think pricing like this is inevitably coming and it's probably coming sooner than we think."
However, this shift raises ethical considerations regarding fairness and the potential for economic disparities, akin to a reverse graduated tax system where wealthier individuals might subsidize lower-income consumers through higher personal pricing.
6. Host’s Commentary and Speculation
Timestamp: [45:30] – [End]
Brian wraps up the episode by reflecting on the transformative potential of AI in reshaping industries and consumer experiences. He underscores the dual-edged nature of AI advancements, offering unprecedented efficiency and personalization while posing new ethical and economic challenges.
Brian McCullough ([47:00]): "AI isn't just optimizing business operations, but fundamentally rewriting the rules of commerce and consumer experience."
Brian encourages listeners to ponder the imminent changes AI will bring, emphasizing the importance of staying informed and adaptable in a rapidly evolving technological landscape.
Conclusion
In this episode of Techmeme Ride Home, Brian McCullough effectively captures the dynamic interplay between technological advancements, financial performance, and regulatory developments shaping the AI landscape. From TSMC’s robust earnings and Anthropic’s competitive stride to Microsoft’s AI product challenges and the innovative application of AI in airline pricing, the episode offers a nuanced exploration of the current and future states of the tech world. Listeners are left with a keen insight into how AI continues to be a pivotal force driving change across various sectors.