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Why Big Tech is Suddenly Paying Up for Startups

When The Information broke the news that OpenRouter was in talks to sell the company last month, a shock wave rippled across Silicon Valley. My phone lit up with bankers asking me if I had also heard that there had been a record nine suitors for the company, which helps customers switch between different AI models and centralize billing. I got the sense that at least two people I called about the deal turned around and placed their own bids as soon as I hung up.

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Community Commentary

Donald ValentinaConsigliere
on… When Andreessen Horowitz Has a Sticky Situation to Solve, It Calls ‘The Wolf’
Fascinating. More like this please.
Zachary MagdovitzPartner, Co-FounderLorimer Ventures
on… When Andreessen Horowitz Has a Sticky Situation to Solve, It Calls ‘The Wolf’
Favorite read in a while.
Paul BaierCEOGai Insights
on… Anthropic and OpenAI’s Share of AI Startup Revenues Rises to 89%
The key question is weather profit concentration follows the same pattern as this revenue concentration. Apple, Microsoft and Google all has declining margin cost, so scale drove profit concentration. I assume this will occur in these market, but this hasn't yet been the case (likely token price increases by OpenAI and Anthropic next year post IPO will help).
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