Comment by dist-epoch
12 hours ago
> if "labs are subsidising tokens on API pricing"
> SemiAnalysis estimates that Anthropic's current blended gross margin has risen to the mid-60% range, with the API business gross margin exceeding 80%
Of course, people will insist "they are lying", "why should we believe them, it's well known they subsidize API pricing", ...
https://newsletter.semianalysis.com/p/anthropic-3q26-profit-...
https://finance.biggo.com/news/02d45650-b569-4d12-b44d-8d6d8...
Agreed. My (somewhat educated) guess is that top labs have healthy margins on API pricing. But this release will add another 3rd party / clear of conflict datapoint in this estimation.
even deepseek, with their current (dirt cheap) price, can earn enough profit to cover the cost (hardware investment?) in 10 months.
Will the model even be competitive in 10 months though? Seems like models that reach top 20 on OpenRouter see 50% of all token spend by day 80, and 80% by day 180.
As long as the hardware can be used on newer models, hardware costs can be recouped running a future model.
But if they're hoping to recoup non-recurring engineering costs rather than just hardware costs, they do need to consider the useful lifetime of the specific model.
That numner blends in training or no?