Comment by bandrami
16 hours ago
My long-term prediction for the sector is that frontier models will be so expensive that they will only be available for grant-funded projects at research institutions, like supercomputer clusters were 25 years ago.
16 hours ago
My long-term prediction for the sector is that frontier models will be so expensive that they will only be available for grant-funded projects at research institutions, like supercomputer clusters were 25 years ago.
Why? Well it depends, most evidence is suggesting that Anthropic and OpenAI are making a lot of money on inference so the question is whether its more profitable for them to sell 100X tokens for Y, or 1X tokens for 100Y. In most industries with high fixed costs and low variable costs and unlimited scalability (like LLM providers) the first option ends up being much more profitable
Literally nobody is making money on inference
Based on what? There isn’t a lot evidence that’s the case..
Prices on OpenRouter for GLM and other large open models indicate that Anthropic/OpenAI must have pretty high gross margins even if their models are several times more expensive to serve.
It wouldn’t make sense for any provider to host large open models and then loss $10 on every $1 they make since they don’t have infinite VC money or any business model that would justify it.
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