Thesis · Foundation Models & AI Intelligence

Will the median trailing gross margin of US-listed AI-native application software companies reporting AI inference as cost of revenue be at least 70% in their fiscal 2027 filings?

Cost-per-token declines and cohort maturation lift AI application gross margins back toward classic software levels (70%+) rather than leaving them structurally compressed by variable inference costs.

6 dated tests · 0 resolved · next on

The tests More theses in Foundation Models & AI Intelligence

Who is on each side

The two sides.

Each side in DeepStack’s words, then the voices who argue it, attributed and paraphrased, dated where the date is known. A voice links to its page on DeepStack where one exists.

The case for yes

Cost per token falls faster than price

Caching, routing, smaller distilled models and maturing user cohorts cut inference cost per user faster than usage per user grows, restoring operating leverage. Reported gross margins of AI-native application vendors expand toward software norms, validating the J-curve rather than the cost-inversion thesis.

The case for no

The case against it

Introduction of real inference costs that scale with customer usage instead of marginal cost approaching zero, so traditional J-curve where customer lifetime value rises with retention no longer holds; retained customers become more expensive to serve, compressing margins. Enterprise AI adoption whose per-seat compute and inference spend rises faster than the wage bill it displaces, so budgets exhausted early, licenses cancelled, and margin drag disclosed on earnings calls. It would show first if median gross margin for the cohort stays below 70% or declines year over year in fiscal 2027.

2 voices

Cost per token falls faster than price

  1. M. V. Cunha

    Cohort-based margin ramp for Base44

    Source

  2. Michael Spencer

    As inference costs decline through hardware improvements, software optimization, or volume leverage, a vendor can either cut prices or expand margins. Anthropic is expanding margins: compute spend per revenue dollar falling from 0.71 to 0.56 while…

    Source

3 voices

The case against it

  1. Saasholic

    Traditional SaaS had nearly zero marginal costs so the customer J-curve bent upward automatically. AI inverts this: cost to serve scales with usage because every query triggers inference and agent runs consume tokens. As AI improves and token costs…

    Source

  2. Prof G Markets

    Inference cost outrunning the labor it replaces

    Source

  3. Ruben Dominguez

    Traditional software has high fixed costs and low marginal costs per user. Usage-based AI inference reverses this: every user interaction incurs a direct variable cost. Profitability depends on controlling per-request costs through routing and…

    Source

What would settle it

The dated tests.

Each test names the public source that settles it, the rule and the day. The Call’s number, the readers’ median and the machines’ numbers stand beside it, as on the Docket.

  1. Microsoft, revenue growth from a year earlier, quarter ended September 30, 2026: whether it comes in at or above 15.5%.

    On the Docket Pendingth089-t04Pre-specified

    Question
    Did the revenue of Microsoft for the quarter ended September 30, 2026 grow at or above 15.5% from the quarter ended September 30, 2025?
    Source
    SEC EDGAR, XBRL company facts of Microsoft (Forms 10-Q and 10-K)
    Rule
    Compare the revenue that Microsoft reports for the quarter ended September 30, 2026 with the quarter ended September 30, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 15.5%; no if it is below 15.5%.
    If the source is late, revised or silent
    If Microsoft has not filed by November 16, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.
    Base rate
    Microsoft's revenue growth from a year earlier was 17.7% for the quarter ended June 30, 2026, by its filing on SEC EDGAR.
    Outside view
    The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.
    What would change the number
    The results-calendar consensus for the quarter ended September 30, 2026 implies 16.7%, and the middle rung is centred there.

    The Call, before the dateExpects yes. Gives the yes answer 72%.

    72%

    0 · no100 · yes

    The machinesClaude 61% · DeepSeek 64%

    Claude: 61%DeepSeek: 64%
    The ladder 3 rungs on one reading, Oct 28, 2026: each asks whether it lands above its threshold, so the Call’s numbers down the rungs sketch where it expects the reading to land.

    1. Above 15.5%Call 72% · Claude 61% · DeepSeek 64%

      72%

    2. Above 16.8%Call 50% · Claude 42% · DeepSeek 45%

      50%

    3. Above 18%Call 27% · Claude 33% · DeepSeek 14%

      27%

    0 · no50100 · yes

    Your number

  2. Microsoft, revenue growth from a year earlier, quarter ended September 30, 2026: whether it comes in at or above 16.8%.

    On the Docket Pendingth089-t05Pre-specified

    Question
    Did the revenue of Microsoft for the quarter ended September 30, 2026 grow at or above 16.8% from the quarter ended September 30, 2025?
    Source
    SEC EDGAR, XBRL company facts of Microsoft (Forms 10-Q and 10-K)
    Rule
    Compare the revenue that Microsoft reports for the quarter ended September 30, 2026 with the quarter ended September 30, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 16.8%; no if it is below 16.8%.
    If the source is late, revised or silent
    If Microsoft has not filed by November 16, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.
    Base rate
    Microsoft's revenue growth from a year earlier was 17.7% for the quarter ended June 30, 2026, by its filing on SEC EDGAR.
    Outside view
    The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.
    What would change the number
    The results-calendar consensus for the quarter ended September 30, 2026 implies 16.7%, and the middle rung is centred there.

    The Call, before the dateEither answer fits the Call. Gives the yes answer 50%.

    50%

    0 · no100 · yes

    The machinesClaude 42% · DeepSeek 45%

    Claude: 42%DeepSeek: 45%

    Your number

  3. Microsoft, revenue growth from a year earlier, quarter ended September 30, 2026: whether it comes in at or above 18%.

    On the Docket Pendingth089-t06Pre-specified

    Question
    Did the revenue of Microsoft for the quarter ended September 30, 2026 grow at or above 18.0% from the quarter ended September 30, 2025?
    Source
    SEC EDGAR, XBRL company facts of Microsoft (Forms 10-Q and 10-K)
    Rule
    Compare the revenue that Microsoft reports for the quarter ended September 30, 2026 with the quarter ended September 30, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 18.0%; no if it is below 18.0%.
    If the source is late, revised or silent
    If Microsoft has not filed by November 16, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.
    Base rate
    Microsoft's revenue growth from a year earlier was 17.7% for the quarter ended June 30, 2026, by its filing on SEC EDGAR.
    Outside view
    The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.
    What would change the number
    The results-calendar consensus for the quarter ended September 30, 2026 implies 16.7%, and the middle rung is centred there.

    The Call, before the dateExpects no. Gives the yes answer 27%.

    27%

    0 · no100 · yes

    The machinesClaude 33% · DeepSeek 14%

    Claude: 33%DeepSeek: 14%

    Your number

  4. Amazon, revenue growth from a year earlier, quarter ended September 30, 2026: whether it comes in at or above 11.5%.

    On the Docket Pendingth089-t01Pre-specified

    Question
    Did the revenue of Amazon for the quarter ended September 30, 2026 grow at or above 11.5% from the quarter ended September 30, 2025?
    Source
    SEC EDGAR, XBRL company facts of Amazon (Forms 10-Q and 10-K)
    Rule
    Compare the revenue that Amazon reports for the quarter ended September 30, 2026 with the quarter ended September 30, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 11.5%; no if it is below 11.5%.
    If the source is late, revised or silent
    If Amazon has not filed by November 16, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.
    Base rate
    Amazon's revenue growth from a year earlier was 19.6% for the quarter ended June 30, 2026, by its filing on SEC EDGAR.
    Outside view
    The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.
    What would change the number
    The results-calendar consensus for the quarter ended September 30, 2026 implies 12.2%, and the middle rung is centred there.

    The Call, before the dateExpects yes. Gives the yes answer 74%.

    74%

    0 · no100 · yes

    The machinesClaude 72% · DeepSeek 60%

    Claude: 72%DeepSeek: 60%
    The ladder 3 rungs on one reading, Oct 29, 2026: each asks whether it lands above its threshold, so the Call’s numbers down the rungs sketch where it expects the reading to land.

    1. Above 11.5%Call 74% · Claude 72% · DeepSeek 60%

      74%

    2. Above 13.5%Call 48% · Claude 55% · DeepSeek 22%

      48%

    3. Above 15.5%Call 30% · Claude 33% · DeepSeek 5%

      30%

    0 · no50100 · yes

    Your number

  5. Amazon, revenue growth from a year earlier, quarter ended September 30, 2026: whether it comes in at or above 13.5%.

    On the Docket Pendingth089-t02Pre-specified

    Question
    Did the revenue of Amazon for the quarter ended September 30, 2026 grow at or above 13.5% from the quarter ended September 30, 2025?
    Source
    SEC EDGAR, XBRL company facts of Amazon (Forms 10-Q and 10-K)
    Rule
    Compare the revenue that Amazon reports for the quarter ended September 30, 2026 with the quarter ended September 30, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 13.5%; no if it is below 13.5%.
    If the source is late, revised or silent
    If Amazon has not filed by November 16, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.
    Base rate
    Amazon's revenue growth from a year earlier was 19.6% for the quarter ended June 30, 2026, by its filing on SEC EDGAR.
    Outside view
    The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.
    What would change the number
    The results-calendar consensus for the quarter ended September 30, 2026 implies 12.2%, and the middle rung is centred there.

    The Call, before the dateEither answer fits the Call. Gives the yes answer 48%.

    48%

    0 · no100 · yes

    The machinesClaude 55% · DeepSeek 22%

    Claude: 55%DeepSeek: 22%

    Your number

  6. Amazon, revenue growth from a year earlier, quarter ended September 30, 2026: whether it comes in at or above 15.5%.

    On the Docket Pendingth089-t03Pre-specified

    Question
    Did the revenue of Amazon for the quarter ended September 30, 2026 grow at or above 15.5% from the quarter ended September 30, 2025?
    Source
    SEC EDGAR, XBRL company facts of Amazon (Forms 10-Q and 10-K)
    Rule
    Compare the revenue that Amazon reports for the quarter ended September 30, 2026 with the quarter ended September 30, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 15.5%; no if it is below 15.5%.
    If the source is late, revised or silent
    If Amazon has not filed by November 16, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.
    Base rate
    Amazon's revenue growth from a year earlier was 19.6% for the quarter ended June 30, 2026, by its filing on SEC EDGAR.
    Outside view
    The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.
    What would change the number
    The results-calendar consensus for the quarter ended September 30, 2026 implies 12.2%, and the middle rung is centred there.

    The Call, before the dateExpects no. Gives the yes answer 30%.

    30%

    0 · no100 · yes

    The machinesClaude 33% · DeepSeek 5%

    Claude: 33%DeepSeek: 5%

    Your number

In The Buildout

The stories that take up this thesis, with their own Calls and tests.

A thesis page states one question and both sides of it; DeepStack takes no side in words, and its view is the number it gives each test before the date. Analysis and opinion, not investment advice. Voices are paraphrased from public writing and attributed by name; DeepStack shows no score, ranking or accuracy for any person. Pre-specified means the words were approved on or before the test’s date. Specified after the date means they were written afterwards: such a test is counted and shown, and never rated. An open question has no words yet. The Call’s number is the chance, from 0 to 100, that the Call gives the yes answer to a test’s question, recorded before the test’s date; it is DeepStack’s own reading, not a market price and not advice. The readers’ mark on the same line is the readers’ median, the middle of the numbers signed-in readers gave the test, shown from 25 readers. The machines: Each model read this page and nothing else. The number that counts is the latest one each model gave before the test closed.