Georgi Winters

🦔Microsoft canceled its internal Claude Code licenses this week after token-based billing made the cost untenable, even for a company with effectively infinite cloud resources. Uber's CTO sent an internal memo warning the company burned through its entire 2026 AI budget in just four months. American AI software prices have jumped 20% to 37%, and GitHub (owned by Microsoft) is dropping flat-rate plans for usage-based billing across its products. My Take The AI subsidy era is ending in real time. The same company that put $13 billion into OpenAI and built the Azure infrastructure powering most of Anthropic's compute just looked at the bill from a competitor's coding tool and decided it was not worth paying. That is not a productivity failure on Anthropic's end. Token-based pricing is forcing every enterprise customer to confront the actual cost of running these models at scale, and the number turns out to be far higher than the flat-rate experiments suggested. This ties directly to my Gemini Flash post yesterday. Anthropic, OpenAI, and Google all raised effective prices in the last six months. Enterprises that built workflows assuming AI costs would keep falling are now watching annual budgets evaporate in months. Two outcomes look likely from here. Either enterprises scale back AI usage to fit budgets, which slows the revenue ramp the labs need to justify their valuations ahead of IPOs, or the labs cut prices and absorb the losses, which makes the unit economics worse at exactly the wrong moment. Both paths land in the same place, the numbers stop working, and somebody has to take the writedown. Hedgie🤗

US02Y going higher..

FED SIGNALS RATE HIKES BACK ON THE TABLE Federal Reserve Governor Christopher Waller said the Fed may raise rates again if inflation stays high amid rising energy prices tied to the Iran war. Waller said rate cuts are no longer more likely than hikes and called for removing the Fed’s “easing bias.” The Fed kept rates unchanged in April, but inflation concerns continue to grow.

IRAN DENIES REPORT OF NEW URANIUM ORDER A senior Iranian official denied claims that Supreme Leader Mojtaba Khamenei issued an order requiring enriched uranium to remain inside Iran, calling the reports “enemy propaganda.” The official said no new directive has been issued, reaffirming that Iran will continue downblending the material domestically. The issue, he added, will be addressed in the next round of talks.

U.S. TWO-YEAR TREASURY YIELDS UP 6.6 BPS AT 4.106%