undefined

points

[-]

Based on what? There isn’t a lot evidence that’s the case..

Prices on OpenRouter for GLM and other large open models indicate that Anthropic/OpenAI must have pretty high gross margins even if their models are several times more expensive to serve.

It wouldn’t make sense for any provider to host large open models and then loss $10 on every $1 they make since they don’t have infinite VC money or any business model that would justify it.

by bandrami9 hours ago|

parent|

[-]

If they had high margins they wouldn't be issuing senior debt with a 18.5% coupon payment (and failing to fully subscribe it), nor would they need Elon to give them two months of free compute in order to appear profitable for a single quarter.

by wqaatwt6 hours ago|

parent|

[-]

We were talking specifically about inference and I don’t think there any indication that their gross margins on the API tokens (if not the personal subscriptions) are negative?

Obviously they have R&D and other fixed expenses that make the company itself highly unprofitable but that’s only semi-tangential.

by bandrami6 hours ago|

parent|

[-]

No I mean Anthropic has only claimed a profitable quarter based on xAI giving them two months of free compute, and both Anthropic and OpenAI are counting discounted revenue as actual revenue. They haven't found a way to sell inference for less than it costs them yet, and when they tried earlier this quarter their customers bailed.

by wqaatwt6 hours ago|

parent|

[-]

Well again.. you are mixing up inference costs and their other mostly fixed expenses (in addition to sales and marketing)

Is there any indication that if they could sell X * N more tokens than now at the same (or even quite a bit lower) price they wouldn’t become profitable as a company?

> They haven't found a way to sell inference for less than it costs them yet

Based on what? I only see evidence to the contrary.