Despite consumer hype, AI labs recognize that monthly subscriptions will never justify their massive valuations. The only viable path to profitability lies in securing large, unglamorous contracts with enterprises, government, and the military.

Anthropic's new AI model, Mythos, is so effective at finding and chaining software exploits that it's being treated as a cyberweapon. Its public release is being withheld; instead, it's being used defensively with select partners to harden critical digital infrastructure, signifying a major shift in AI deployment strategy.

When a private company creates a "digital skeleton key" capable of compromising critical national infrastructure, it fundamentally alters the balance of power. This moves the policy conversation beyond simple regulation and towards treating AI labs like defense contractors, with some form of government nationalization becoming a plausible endgame.

Leading AI companies, facing high operational costs and a lack of profitability, are turning to lucrative government and military contracts. This provides a stable revenue stream and de-risks their portfolios with government subsidies, despite previous ethical stances against military use.

The logical endgame for OpenAI, if it truly believes it will achieve AGI, is not to sell intelligence via APIs. Instead, it would be to hoard its most powerful models, make them exclusive to its own proprietary products (e.g., OpenAI CRM), and cut off competitors, thereby capturing all the economic value.

The US government's intervention with Anthropic's Fable 5 model signals a new era where AI labs will hold back their most capable systems from public release. This creates a consolidation of power, with only the labs and their chosen partners having access to true frontier capabilities.

OpenAI is lobbying the federal government to co-invest in its Stargate initiative, offering dedicated compute for public research. This positions OpenAI not just as a private company but as a key partner for national security and scientific advancement, following the big tech playbook of seeking large, foundational government contracts.

Because AI models can be easily downloaded, traditional regulation is ineffective. The logical endpoint isn't policy, but active 'algorithmic warfare' where proprietary models are used to launch offensive attacks to degrade or trick competing open-source and foreign state-sponsored models.

OpenAI's enterprise strategy for its powerful models involves a security narrative. They argue businesses must subscribe to their frontier "defense" AI to stay ahead of adversaries using capable open-weight models for attacks, creating a permanent security tax.