You could say the same of Dropbox. Or Gmail.

A service like Gmail or Dropbox with low storage is close to free to operate. Same thing with iCloud - 50 gigs a month is what, 1 dollar? How is that possible?

Because 50 gigs is next to nothing, and you only need a rinky dink amount of compute to write files.

YouTube, on the other hand, is actually pretty expensive to operate. Takes a lot of storage to store videos, never mind handling uploads. But then streaming video? Man, the amount of bandwidth required for that makes file syncing look like nothing. I mean, how often does a single customer watch a YouTube video? And then, how often do people download files from Dropbox? It's orders of magnitude in difference.

But LLMs outshine both. They require stupid amounts of compute to run.

True, although I don't think Dropbox or Gmail's operating costs to support those free users are anywhere near those of OpenAI.