The proverbial "50B" is investment in next year's model. The current model cost under "30B", and therefore "is profitable". It is a bet on scaling, yes, but that's been common throughout the industry (see, eg, Amazon not being profitable for many years but building infrastructure)
> If every year we predict exactly what the demand is going to be, we’ll be profitable every year. Because spending 50% of your compute on research, roughly, plus a gross margin that’s higher than 50% and correct demand prediction leads to profit. That’s the profitable business model that I think is kind of there, but obscured by these building ahead and prediction errors.
The proverbial "50B" is investment in next year's model. The current model cost under "30B", and therefore "is profitable". It is a bet on scaling, yes, but that's been common throughout the industry (see, eg, Amazon not being profitable for many years but building infrastructure)
Also see the Dario interview with Dwarkesh:
> If every year we predict exactly what the demand is going to be, we’ll be profitable every year. Because spending 50% of your compute on research, roughly, plus a gross margin that’s higher than 50% and correct demand prediction leads to profit. That’s the profitable business model that I think is kind of there, but obscured by these building ahead and prediction errors.
(a lot more at the link)
https://www.dwarkesh.com/p/dario-amodei-2?open=false#%C2%A70...
Except the rumors are they subsidize even the inference, not that they have capex in training.
The maths shows inference is very profitable. Look at how Google/AWS/Azure change the same rates as Anthropic does for running Claude models.
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