points by burnerRhodov3 1 day ago | 0 comments
The internal metric that they are using is they get $2 for every $1 in inference. So, if you discount model development costs, they are selling the tokens for more than it costs them to generate a token. And this is before they start integrating their advertisment networks into the model. They see something as high as $8-11 per $1 of inference once purchasing and advertisments are incorporated.
[–] cmiles8 1 day ago
[–] burnerRhodov3 17 hours ago
There's not enough ad money? What? lol. there will always be ad money as long as a click costs below my profit. Every single one of those companies you listed was excluded from the Ad system of the ones before it. They built their own.
[–] surgical_fire 1 day ago
> So, if you discount model development costs, they are selling the tokens for more than it costs them to generate a token.
If you discount my expenses I am actually swimming in cash too.
It is absolutely moronic to discount the value of developing the thing from the profitability of the thing. Models to depreciate with time.
[–] burnerRhodov3 17 hours ago
For sure, models definitely depreciate but so does CapEx. but you don't include CapEx, you have an amortization schedule over it's useful lifetime. However, when you start mixing CapEx and model depreciation, you get an interesting curve. As CapEx increases, model development is spread across multiple generations across that same CapEx. So, assuming you've amortized your CapEx, successive model generation eventually has a horizontal assimtote at OpEx and depreciation.
The real question is "Are frontier training costs growing faster than the productive lifetime value of the GPU infrastructure used to create those models?" Which is a hard question to answer and is something we'll find out it early 2030.
[–] bigstrat2003 1 day ago
Also, Anthropic is known to lie through their teeth to make themselves look better, so any claims that they make a profit on inference should be treated as false until proven otherwise.
In the “but they’ll slow down training and so will become more profitable” thinking is in big trouble given the pace of open models. They’ll then be even less competitive with free options and so even less reason to buy from Anthropic.