Comment by NitpickLawyer
6 hours ago
I'll be honest, I typed that message while having morning coffee, so it's just a quick reaction from my part, not a heavily researched article in a journal :)
But I do think that the median price where this settles will tell us something about the floor at which it is profitable to serve this model.
> DeepSeek, which hosts DS v4, profitably
I specifically mentioned 3rd party providers, because there can be an argument that model creators themselves are subsidising tokens to gather training data for the next model. In fact, ds are public about their gathering of data (at least on openrouter they're marked as such). So that 0.x price point for dsv4-pro is likely subsidised.
Based on the best available information, DeepSeek is pricing the API such that they can repay their infra capex over 10 months, while deprecating/amortizing the cost of said infra over 3 years.
For my product, I run GLM 5.2 and other models myself, in production, on rented hardware. Paying API prices would cost much more.
EDIT: You can now see several other third-party providers for Kimi K3 (Nebius, Fireworks). All charge exactly the same as the first-party. Does that mean that their costs are the same? Seems quite unlikely. It's simply not an efficient market, yet.
They need to get a license from moonshot to provide inference for K3. Probably have to follow the pricing set by moonshot as well.