Comment by _aavaa_
11 hours ago
Unlikely, api pricing includes a healthy profit margin (as near as we can tell from the outside) which they wouldn’t charge themselves.
11 hours ago
Unlikely, api pricing includes a healthy profit margin (as near as we can tell from the outside) which they wouldn’t charge themselves.
> healthy profit margin (as near as we can tell from the outside)
Ugh we still don't know if this is true and it's nearly impossible to calculate without a full understanding of the real CAPEX cycle. Stop spreading these rumors until we know for sure.
SemiAnalysis estimates their profit margin to be 70%. To be losing money on inference implies that their costs are almost 4X higher than SemiAnalysis has calculated. That's not credible.
I don’t see how they could credibly estimate inference costs without knowing the model size.
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The token price seems like a poor measure.
Building the LLM that could do this work in 11 days cost multi billions.
The economics probably only make sense if LLMs prove to be a benefit to almost everyone in a way we can all accept.
Otherwise this cost a lot more than we’d otherwise pay. It was incredibly fast though. But we all know: cost, speed, quality. Pick two.
And which they could not charge anyone for. Unless these were extra resources that would otherwise go unused it cost them the amount they could have charged for them. Normally I would expect most businesses to make reasonable tradeoffs when it comes to how to allocate resources. I’m not convinced that any of the AI providers should be given that benefit of the doubt.
I don't think Anthropic is turning a profit ;)
Whether on net they turn a profit as company overall is neither here nor there.. My point is that they are selling API tokens at a profit (or if being pedantic, then at a price higher than the cost to serve them ignoring research costs). And that that price is got a healthy margin which they don't charge themselves.
Because of the ongoing training costs. They are certainly making a healthy profit margin on inference.
Never really a sound argument.
It's like having new solar panels installed every week. Sure you're "profitable" on the $0.20/kWh you're selling your "free" energy at when you ignore the cost of the solar panels you're buying every week.
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Neither did Amazon for it's first 25 years ;)
Amazon didn't make a profit because they were reinvesting money into starting new lines of business.
Basically there was a choice between taking the money, and growing. They chose growth.
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I think you're missing the point of the comment you responded to, lol.
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