It’s a rabbit hole but if you have some time it’s fascinating to look into the sentiment of investing in China vs the rest of the world. Because the numbers are so unreliable, investing is considered about the same as gambling in China. You’re more likely to lose a lot of money than win, and there is no way to accurately predict strong from weak companies based on their reported financials. Occasionally senior leaders will sentence the leader of very large failed company to death to attempt to maintain confidence, but it’s not working. This is one of the reasons for the housing bubble. There just aren’t stable investing opportunities in China.
API usage being profitable is completely plausible, but almost nobody pays API prices for Claude and GPT, nor would they be able to afford them if the subscription suddenly stopped existing.
In both places I've worked at in the past two years (F500), subscription plans were banned due to data privacy concerns. Everyone _had_ to use the provisioned API tokens (even if they had a personal subscription)
Other providers also charge similar prices (who are obviously not subsidising anything) for running DeepSeek models on their own infrastructure.
OpenCode Go sort of provides a "subscription" which will let you use DeepSeek but they're extremely transparent about what they're offering.
Also these third-party providers are running magnitude smaller models than what Anthropic and OpenAI's power users expect from them. Yes the average chat message isn't being routed to the 1+ Trillion param model but people running CC or Codex on Ultra probably are. Those are objectively more expensive.
I am not an AI denier, I use it and I find it very useful. That said I can disagree with the current economics of the industry and their business model.
Its difficult for people to accept this because many want the model producers to succeed badly.
SOrry folks...
Most of the cost is depreciation on the GPUs and the HBM.
The one number you need to figure out is how much it costs you to buy that GPU and HBM, then how many tokens you can sell from it over its lifespan which is generally amortised over 2 years.