Can you cite your source on the claim that “inference is currently insanely profitable”? Everything I read suggests that openai and anthropic lose money on their plans.
My caveats were clearly stated… After capital expenditure, it’s just operational costs, where electricity & cooling are the big ones.
At that point, it is insanely profitable to serve. The cheap API prices on open weights models hints at the profit margins involved in the US (the frontier labs and hyperscalers don’t open their books for us), unsurprisingly)
Therefore, the longer they can serve existing and lower cost models at the current rates, the better for their bottom line. It’s just common sense in business.
It doesn’t mean the company as a whole is profitable. I expect we’ll see turmoil in the coming months and years, and the prize will be compute capacity, with electricity & cooling options.
I suspect it’s profitable in the abstract - and their accountants would be bad at their jobs if they couldn’t work out what utilisation rate you need to pay for the server runtime.
However how aggressively you amortise the cost of the training is the key, especially if you keep releasing new models every 6 months.
Can you cite your source on the claim that “inference is currently insanely profitable”? Everything I read suggests that openai and anthropic lose money on their plans.
My caveats were clearly stated… After capital expenditure, it’s just operational costs, where electricity & cooling are the big ones.
At that point, it is insanely profitable to serve. The cheap API prices on open weights models hints at the profit margins involved in the US (the frontier labs and hyperscalers don’t open their books for us), unsurprisingly)
Therefore, the longer they can serve existing and lower cost models at the current rates, the better for their bottom line. It’s just common sense in business.
It doesn’t mean the company as a whole is profitable. I expect we’ll see turmoil in the coming months and years, and the prize will be compute capacity, with electricity & cooling options.
I suspect it’s profitable in the abstract - and their accountants would be bad at their jobs if they couldn’t work out what utilisation rate you need to pay for the server runtime.
However how aggressively you amortise the cost of the training is the key, especially if you keep releasing new models every 6 months.