Comment by tskj
6 days ago
Dario has publicly claimed each model has been profitable, even accounting for its training costs; it's just that each new model is exponentially more expensive to train than the last, so the income lags and it looks like the company is losing money overall.
Now, we can't know if this is true unfortunately, but it's not directly contradicted by anything that's known publicly at least. I thought it was an interesting way to frame it and makes the whole situation look marginally less bad.
A common extreme misconception is that inference is expensive and that providers are loosing a lot of money. Inference is extremely lucrative and profitable.
Inference is the phase where they make money. But the question is whether they can be profitable overall as training continues to balloon.
I think the case for this is pretty strong actually. Last year my company was maybe willing to pay $100 a month to Anthropic (per developer). Today we're all on the $300 plan without any hesitation. If Fable ever becomes available as the default model, I imagine my company would be willing to pay in the $500-$1000 range per month per developer.
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why are you listening to these idiots who have every incentive to spin the story as much as possible
FCFF = EBIT(1-t)-Reinvestment
I dont care about your gross profit - this kind of cash profit determines the value of operating assets.
Well yeah obviously they have to stop reinvesting more than they make at some point to become profitable. To be clear, I think what Dario was saying was that if you consider each model training + deployment as a company, meaning all expenses and taxes, it was still profitable.
Whether he's lying is another question, but seems unlikely.
Wow, you actually think any of those AI companies are profitable? Would you be interested in some bridges?
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