Comment by sedatk
12 hours ago
One month I could use Github Copilot fully with no disruptions. The next month, after pricing changes, I’ve run out of tokens in two days.
Such drastic changes tell me that pricing of tokens is arbitrary, and AI business is running out of money fast.
I think it's more a consequence of pushing for the biggest valuation/IPO. Rumoured profits on inference are north of 70%.
Taking SpaceX as an example, they have increased prices across all their consumer products over the past six months. But they definitely aren't short on money with Alphabet and Anthropic combined paying them over $2 billion per month.
Microsoft/GitHub lost out here as they were just repacking other people's products.
How is spacex not short on money when no one will pay them to use their models and they lose money every quarter? Sure they’re now transitioning to a data center provider away from actually being an AI company because they’re losing less money that way but it doesn’t sound like a strategic success
Inference can only happen after having invested in training and datacenter construction. Arguing about "inference profitability" sounds a lot to me like ignoring large cost centers of these comanies.
> Rumoured profits on inference are north of 70%.
Rumors are worth squat when they’re most likely put in motion by the people with a vested interest in this industry.
Let’s talk about profits when there’s real data from the IPO documentation.
> Rumors are worth squat
You can make some educated guesses and find out some limits on inferencing cost by looking at 3rd party providers on platforms like openrouter. You can get some median cost /tok for a given model size. Then make some educated guesses on SotA model sizes, and you can get an estimate on pure cost of serving a model. Error bars and all that, of course. But still a range, with some limits.
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SpaceX is increasing prices because they're trying really hard to get into the S&P 500.
The github example is also a bit of an outlier because they made a recent change to their pricing so that's why its such a drastic jump.
Also I mean prices in generally for all things are based on underlying factors, that doesn't make them arbitary (i.e. github executives using a random number generator for token pricing would be arbitary)