Comment by andrewmutz
5 days ago
Both can be true. They can be charging what the market will bear, and still be charging less than their costs of running it.
5 days ago
Both can be true. They can be charging what the market will bear, and still be charging less than their costs of running it.
There is no way I'm believing DeepSeek can charge less than $1 USD for their pro model while Opus costs over 25x more, yet their price is less than the cost of running it?
It would seem strange, if they were operating in the same economy, but they don't. DeepSeek operates in an economy with a high degree of central planning.
China subsidizes strategic industries, and they have heavily done so with AI. And DeepSeek specifically has said they have no commercialization plans.
For example: https://www.boc.cn/aboutboc/bi1/202501/t20250123_25254674.ht...
DeepSeek is not the only provider of inference for their models. Chinese subsidies likely do explain DeepSeek's ability to provide inference cheaper than other providers, but even a US provider like DeepInfra can serve DeepSeek 4 Pro at $1.30/M in and $2.60/M out. Unless American labs are doing something wildly inefficient, it feels safe to assume Anthropic has some profit margin on inference at API prices.
1 reply →
> There is no way I'm believing DeepSeek can charge less
Why not? Hetzner charges WAY less than AWS too. Can you not believe that?
That's the point. Hetzner is presumably covering their costs, so it's a safe bet that AWS is profitable.