Roy: AI Infrastructure Will Top Out at 20-30% Margins, Not 70%
Ranjan Roy · AGI or Bust, OpenAI’s $1 Trillion Gamble, Apple’s Next CEO? · Oct 13, 2025 · at 36:46
Ranjan Roy analyzes the long-term unit economics of AI compute providers like Oracle compared to traditional software companies.
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“In reality, like, there's no reason that the margin profile should change over time. Like, maybe it starts to improve, but it's incremental. Maybe you get to 20, 25%. Maybe you squeeze out 30%. But in reality, like, this is a different business than the sleepy database, a company that was just churning out cash for so long that it really should call into question, I think, like, how, what the economics of all these companies are going to look like, and It's going to be different, and maybe it'll be fine. Like, maybe these will be retailer style businesses that are gigantic and operational, but it's not going to be 70% margin software businesses.”
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