Comment by tempaccount420
9 hours ago
This is not priced at inference cost.
My guess: it's the price at which they make more money than if they rent the TPUs to other companies.
The Gemini team has had trouble securing enough TPUs for their user's needs. They struggle with load and their rate limits are really bad. Maybe at a higher price, they have a better chance at getting more TPUs assigned?
The cost at such they could rent out the TPUs, i.e. the market rate, is the inference cost.
Just because you are vertically integrated doesn't mean you get to discount the one business units products to the other. Doing so discounts the opportunity cost you pay and is just bad accounting.
Basic business principle, you charge what people are willing to pay not what it costs.
Look up “double marginalisation”.
Depends on if you have spare capacity I think. They have minimal competition so they might be maximizing profit by charging prices higher than what clears all their supply.