1. And that marginal cost is large, much larger than the marginal cost of serving a Google Search query

2. The marginal cost is electricity until the hardware overflows. So it's continuous for electricity and a step function for hardware capacity.

Plus you don't address the core point. Frontier AI is capital intensive. A lot more capital intensive than regular software. The existing clouds supporting the entire internet (!!!!) were built for a fraction of the cost of AI infrastructure, and there isn't even an end in sight to this continuous hardware investment.

Let alone hardware refresh cycles.

AI is basically investment into roads.

Software used to be a magical place, closer to selling music albums but even better.

AI is a much worse business margin wise than regular software.