And at that cost they're still not profitable. It's going to be a bumpy road ahead...

arrowleaf an hour ago | parent | next [-]

I thought they are making a profit on API pricing? A quick Google shows somewhere between 50-70% margins on API inference.

	▲	bakugo 43 minutes ago \| parent [-]
		API pricing is almost definitely profitable, but at this point I assume it's a small minority of their inference traffic compared to subscription usage, and unlikely to make up for the rest of their expenses on its own.

▲

arikrahman an hour ago | parent | prev | next [-]

Meanwhile I can do all that and more with reasonix harness for Deepseek with a cache hit rate of 99%. And that's with unsubsidized American providers like cloudflare or Digital Ocean

▲

swalsh 21 minutes ago | parent | prev | next [-]

I think profitability is a matter of accounting. Inference is where money is made, but training is where money is spent. We keep getting new models every few months, but frankly the old models are still quite usable. I suspect labs will soon start specializing in expert models per use case so they can increase the lifespan of individual models, and change the profitability per model.

	▲	CuriouslyC 8 minutes ago \| parent [-]
		That's not the only reason to go to expert models. The more different domains you try to stuff in there, the more parameters the model needs to keep things coherent and not overload tokens in a way that induces errors. For example, if a model trained only on biology text sees "sonic hedgehog" there's no ambiguity, and this compounds for all the things that are "overloaded," in the training corpus, which turns out to be quite a bit.

▲

tyre an hour ago | parent | prev | next [-]

People keep saying this but from what we’ve seen, Anthropic models are marginally profitable and earn back their costs over their lifetime. The company is burning money building the next versions and other ventures (e.g. verticals), but the models themselves have been profitable.

	▲	gamblor956 43 minutes ago \| parent [-]
		They're EBITDA profitable, not GAAP profitable.

▲

an0malous an hour ago | parent | prev [-]

What’s the blast radius of this bubble popping? It’s all private investment still right?

	▲	bhewes an hour ago \| parent [-]
		Two thirds of most of the DC builds are not compute. So it's a CRE play the last leg holding up that mess.