Yeah. 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.
That'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.
Having 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.
Yeah. 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.
Why do you think that?
DeepSeek had a theoretical profit margin of 545 % [1] with much inferior GPUs at 1/60th the API price.
Anthropic'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...
American labs trained in a different way than the Chinese labs. They might be making profit on inference but they are burning money otherwise.
> they'd have to be insanely incompetent to not make a profit on inference.
Are you aware of how many years Amazon didn’t turn a profit?
Not agreeing with the tactic - just…are you aware of it?
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Deepseek lies about costs systematically. This is just another fantasy.
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Because if you don't then current valuations are a bublle propped inflated by burning a mountain of cash.
That'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.
Having 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? :)