> Models are not free. Downloading them is free. Running them is not.

Is this really different from traditional software? Downloading postgres is free. Running it is not. You either buy hardware and assume the costs of owning and running that, or you pay to run it in the cloud.

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charlieflowers 4 minutes ago | parent | next [-]

But inference costs scale per task whereas platform services like postgres typically amortize across tasks. If you are selling tasks done by inference, then compute is part of your COGS and it scales per task.

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aurareturn 10 hours ago | parent | prev [-]

I think the point here is that it takes the same hardware to inference an open source model as OpenAI/Anthropic inference their models.

IE, a lower param OpenAI/Anthropic model can compete with a higher param open source model.

So even if you are an American company who downloaded Chinese models in hopes of saving in cost, you still have to beat OpenAI and Anthropic in $/task which is very tough to do over the long run.

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Gigachad 8 hours ago | parent | next [-]

The problem is these AI companies are running at a loss with the hopes of pumping the prices after everyone is hooked. Now they are locked in at selling API access at rock bottom price. The valuations won't hold.

	▲	elictronic 6 hours ago \| parent [-]
		It’s even worse. There operating costs are rising because of their own demand claims while those same rock bottom api prices are locked in. There being squeezed by their own stock pumping and SpaceX pretending to be an AI company is driving down the exit strategy. I’m guessing one starts going full Theranos and begins claiming full AGI or gets the US government to government cheese then hard. It’s going to be a few crazy months.

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pishpash 10 hours ago | parent | prev [-]

No they don't. Are OpenAI and Anthropic charging at cost, or wish to? No.

	▲	aurareturn 10 hours ago \| parent [-]
		If you have more efficient models, you can reduce price and grab market share or keep price and increase your margins. Over time, this compounds. More profits means more investments. More market share means more control.