Stripe Buys OpenRouter for $7.5B & OpenAI Pauses Astra

So first up, Stripe agreed to buy a company most people listening have never heard of, reportedly for $7.5 billion.

Three months ago, it was worth $1.3 million.

This was a little wild.

I didn't have Stripe on my AI acquisitions list, but here we are.

So Stripe reportedly negotiating to buy a company called OpenRouter, which is probably not any company most of us listening here have heard of.

So let's go into what OpenRouter does.

OpenRouter, if you're developing an application on top of AI tools, OpenRouter is kind of like Stripe.

They describe themselves as the Stripe of the AI world, but they allow you to write the code once and then easily swap out to any of 400 different models in the back end.

So you wrote it with Chad GPT, you want it to run on Clodge or run it on Kemi K3, whatever, they don't care.

They'll sit in the middle.

So it's super easy for you as a developer to switch out what model you're using based on latest capabilities, cheapest costs, whatever it might be.

Yeah, I mean, OpenRouter, right now, so many people are struggling with the cost of running whatever their preferred model is, and AI costs are going through the roof.

So OpenRouter is this great sort of idea to just sort of seamlessly behind the scenes pick which model is going to get you the biggest bang for your buck, so on and so forth.

But I have to say, like, that to me feels like a likely short-term problem.

So for Stripe to place a $7.5 billion bet on OpenRouter being the solution to that problem, I was like, whoa, that's wild.

The valuation is sort of shocking.

The valuation is shocking.

I think the business model is going to be really interesting to see.

As you said, I think this is a bet that models commoditize.

I mean, if you only have one or two players and you do a direct deal and you work, you integrate with those two people.

If it's constantly switching and you're playing a cost game and using different providers, then something like OpenRouter makes a lot of sense.

Today, OpenRouter makes their money by charging developers a premium on top of the cost of the tokens that they're paying to the provider.

But you have to wonder, as all these companies are building out tens, hundreds of billions of dollars in data center infrastructure, if Stripe and OpenRouter become the place where all the developers are, they can charge on the back end to say, hey, give me a discount on the tokens because I'm going to send all my people over.

And so they can, I really wonder if they're going to switch the charging from the developer side and charging a premium on the tokens to charging for which backend either model or hyperscaler data center operator is going to get access to those tokens.

Like, okay, they want to run ChatGPT, which data center is going to serve it? They want to run, I got a K3 query over here, like which data center can give me the best price? And they're in a position to actually extract value from the people with all the cash right now.