Tokens do reflect the provider's cost though - each token output required them to execute the model once, normally incurring a fixed amount of compute per token.

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janilowski 13 hours ago | parent | next [-]

I am not sure if pricing actually reflects inference costs

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janalsncm a day ago | parent | prev [-]

Providers amortize the compute across a batch.

If yours is the only request in the batch it will cost them one full pass through the model.

If yours is one of 1024 inputs in the batch the per token cost is 1024x less.

	▲	HarHarVeryFunny 12 hours ago \| parent [-]
		Apparently hardware depreciation is the dominant cost rather that operational cost (electricity etc), and this is occuring at a fixed rate per the planned replacement lifetime. So, the cost to provide the service is essentially fixed regardless of load, but the revenue they are generating is variable. In practice most GPU's are going to be capacity-maxxed since the providers sell cheap batch APIs that they queue to keep the machine loaded. They'd be losing money over a given time interval if revenue generated during that interval wasn't greater than depreciation (etc), but it seems that will rarely happen.