This is what I believe is happening: 1. AI adoption has outpaced expectations relative to Moore's law. Silicon Valley startups typically price their services b

This is what I believe is happening: 1. AI adoption has outpaced expectations relative to Moore's law. Silicon Valley startups typically price their services based on anticipated future costs rather than current ones. While it was clear that AI inference costs would decline substantially, the rate of adoption was faster than projections, creating a gap where usage scaled faster than costs could decrease. 2. As companies like Cursor began recruiting talent from Claude, Claude responded by raising prices, recognizing that they were now competing directly with services built by their former employees.