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points by VulgarExigency 1 day ago | 0 comments
Deepseek claim they are earning 38 dollars per GPU hour on inference. If you compare Deepseek Flash's off-peak pricing with Sonnet at API rates, Deepseek is 16x cheaper per 1M output tokens, and 13x to 33x cheaper for input, depending on whether or not it's a cache hit. Inference is very profitable.
[–] F7F7F7 1 day ago
There are moments where I have a 2 hour , 4 instances in separate Kitty/Ghost windows , Opus 5.5 hammering away on each - and only see a 1% increase on my Max x20. Then there are other days where 10 minutes of a single xH Opus doing 1/10th of the work will kill 2%.

Anthropic is super opaque with what inference costs at any given moment on the subscription and cache is just super inconsistent.

[–] overfeed 1 day ago
I wouldn't be surprised if they have some implementation of demand-based surge-pricing
[–] csomar 21 hours ago
A Claude/OpenAI sub is still cheaper than DeepSeek API pricing though. Also, I suspect Claude and OpenAI models to be way larger (probably in the 2-3T range) than that of Deep Seek.
[–] etempleton 1 day ago
Again, if you ignore training.

That is like saying selling hamburgers is profitable if you exclude the cost of beef.

[–] throwthrowuknow 1 day ago
Not the same. You could, and many will argue we already have, strong enough models that you wouldn’t need an upgrade. Web development is already there. The competition to train better models is about capturing more market share now.
[–] etempleton 1 day ago
Okay, I will play along. Anthropic stops training new models tomorrow. They start turning a profit. Yay! Except wait, they still have 450 billion in commits that cannot be cancelled and another 300 billion that apparently they can cancel under certain scenarios. But maybe that all magically goes away somehow; I don't know, Coreweave is feeling generous because they are doing so well, probably not, but this is the fantasy so I digress. So they have this really great product that people want and they can just sit back and make money. Except no one else is going to stop training. And not only that some random Chinese company you have never heard of is distilling their model and is going to come out with a clone version that is 99 percent as good in one year. And on top of that, every 6 months one of the big 5 competitors comes out with a new model that is better. Anthropic can't keep charging the same price so they lower their price and lower their price until they are back to break even. Now they have an inferior product and are not competitive anymore. There is no moat.

If under the scenario you outline where they don't need to upgrade then AI is commoditized and margins are razor thin. And that is fine. Great even! But it doesn't justify Anthropic's trillion+ dollar valuation.

[–] throwthrowuknow 20 hours ago
“The competition to train better models is about capturing more market share now.“
[–] etempleton 17 hours ago
Where is the moat? There is no cost of switching. Anyone or any company can bounce between AI with minimal cost of switching. So unless they find a way to keep users beyond, “our model is the best” user acquisition isn’t going to matter a whole lot.
[–] pestatije 1 day ago
No. Beef is electricity... you'd have to consider warehousing or indeed staff training, as training