Its not subsidized, in fact, they probably have very healthy margins on Claude Code.
replyYeah. If you ignore the negligible fact that some investor may want a return on all that money that is going into capex I am pretty sure you can, Enron style, get to the conclusion that any of those companies have “healthy” margins.
replyWhy do you think that?
replyDeepSeek had a theoretical profit margin of 545 % [1] with much inferior GPUs at 1/60th the API price.
replyAnthropic's Opus 4.6 is a bit bigger, but they'd have to be insanely incompetent to not make a profit on inference.
[1] https://github.com/deepseek-ai/open-infra-index/blob/main/20...
> they'd have to be insanely incompetent to not make a profit on inference.
replyAre you aware of how many years Amazon didn’t turn a profit?
Not agreeing with the tactic - just…are you aware of it?
Because if you don't then current valuations are a bublle propped inflated by burning a mountain of cash.
replyThat's not how valuations work. A company's valuation is typically based on an NPV (net present value) calculation, which is a power series of its time-discounted future cash flows. Depending on the company's strategy, it's often rational for it to not be profitable for quite a long while, as long as it can give investors the expectation of significant profitability down the line.
replyHaving said that, I do think that there is an investment bubble in AI, but am just arguing that you're not looking at the right signal.
And that's OpenAI's biz model? :)
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