Comment by bandrami
12 hours ago
If they had high margins they wouldn't be issuing senior debt with a 18.5% coupon payment (and failing to fully subscribe it), nor would they need Elon to give them two months of free compute in order to appear profitable for a single quarter.
We were talking specifically about inference and I don’t think there any indication that their gross margins on the API tokens (if not the personal subscriptions) are negative?
Obviously they have R&D and other fixed expenses that make the company itself highly unprofitable but that’s only semi-tangential.
No I mean Anthropic has only claimed a profitable quarter based on xAI giving them two months of free compute, and both Anthropic and OpenAI are counting discounted revenue as actual revenue. They haven't found a way to sell inference for less than it costs them yet, and when they tried earlier this quarter their customers bailed.
Well again.. you are mixing up inference costs and their other mostly fixed expenses (in addition to sales and marketing)
Is there any indication that if they could sell X * N more tokens than now at the same (or even quite a bit lower) price they wouldn’t become profitable as a company?
> They haven't found a way to sell inference for less than it costs them yet
Based on what? I only see evidence to the contrary.