He's an interested party. His investments are worth a lot more if he says that tokens are sold at a profit. I don't understand how anyone would trust him?

▲

wqaatwt 6 hours ago | parent [-]

There are plenty of various providers on OpenRouter serving very large Chinese models like GLM for a fraction of what OpenAI/Anthropic. Presumably they are making a profit.

It’s unlikely that Claude is proportionally that bigger and more expensive to serve so profit margins on inference must be pretty decent

▲

sarchertech 5 hours ago | parent [-]

Do we know they are making a profit though? They could be subsidizing use to build market share the same way. They might not have billions, but at the volumes they are selling maybe they’ve got the cash to do it.

Even if they are “profitable” how many Uber drivers are “profitable” because they aren’t correctly calculating asset depreciation. Maybe these guys are doing the same thing.

Maybe it’s a lot of people who already had GPUs for crypto mining, and they’ve moved over to this, so that if they need to grow and buy new GPUs the costs would dramatically grow.

▲

mvanbaak 5 hours ago | parent | next [-]

also, it's very much possible that the chinese companies get heavy investments from the state. Since it's very hard to get this info we have no idea wether they really make a profit or not.

▲

throwaway-away 4 hours ago | parent | next [-]

I agree, and find that very plausible. I mean, for the CCP a few billions to subsidize domestic AI companies is a tiny investment with a potential huge payoff. It prevents (or at least make it harder for) US companies to build a monopoly on LLM tech and it could help popping the bubble which would weaken the US economy. In fact, if I remember correctly, the AI infrastructure build-out is what is keeping the US from a technical recession.

▲

wqaatwt 2 hours ago | parent | prev [-]

The R&D is of course subsidized but a lot/most(?) of these inference providers are not Chinese

	▲	sarchertech an hour ago \| parent [-]
		If the Chinese companies are subsidized anyone who wants to compete with them has to match their price.

▲

wqaatwt 2 hours ago | parent | prev [-]

> subsidizing use to build market share the same way

To an extent maybe, but that market is almost entirely commoditized already. Besides Cerebras and maybe Groq (which already charge a slight premium) all the other providers are more less interchangeable.

> Maybe it’s a lot of people who already had GPUs for crypto mining

I’m not sure the type of GPUs that were most popular for crypto are at all useful for LLMs?

	▲	sarchertech an hour ago \| parent [-]
		>interchangeable If there’s a few providers subsidizing, that’s the price ceiling. Everyone who wants to compete has to subsidize. Now if this market had been operating for years, I’d say that it’s likely all these companies are profitable or close to it. But the market is so new and there’s so much hype, I find it very plausible that none of these guys are making a profit and they all hope to just hang in until all the subsidies go away. > I’m not sure the type of GPUs that were most popular for crypto are at all useful for LLMs? There’s some overlap. I’ve definitely read about people repurposing.