What is the cost of AI tokens? You can't just calculate cost of inference. There is a cost to train, there is a cost for staff to build it all, the money investors provided for it all. When you run a business, all those costs must be recovered. Sure, it takes $2 in material cost to make a pizza, but what's the cost of pizza? You have to take into account, energy, rent, staff, insurance, and profit too. Tokens/$ is subsidized if you are talking about APIs
replyThe big AI companies like OpenAI and Anthropic may have rushed into it too fast, and in effect wasted a lot of money on early model generations that never paid for themselves, early model architectures that were not cost-efficient, experiments that never panned out, etc.
replyThe AI pure-play companies like OpenAI and Anthropic are presumably in worst financial position, since others like Google, Microsoft, Amazon and Meta (also Alibaba, Baidu, Bytedance, Tencent, Xiaomi) have generally been more conservative and are treating AI as an incremental revenue source not a highly leveraged all-in bet.
they operate at a loss (they pretend to profit by excluding key costs in financial reports). they won't do it forever.
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