Simon Wu · 18 August 2026 · Operating Insight

Gross Margin Isn’t Telling You What You Think It Is

Simon Wu, Partner @ Cathay

Gross margin in AI companies masks widely different business models and accounting treatments—compute allocation, forward-deployed engineers, and cost classification choices mean two companies with identical reported margins may have fundamentally different unit economics and pricing power.

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Topics: AI (Horizontal) · Enterprise Software

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