Prices are moving inference to highly profitable, oAI seems to have solved their training problems, and they're currently competing nicely with Anthropic on the coding side. I'd wait, too -- why fight this stuff out in public when you can stay private and have your big competitor deal with all the public company concerns? There's plenty of capital available in the private markets for them right now.

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nwah1 an hour ago | parent | next [-]

Given that they paused signups for their 20x Max plan, your assessment seems overoptimistic.

Their new Broadcom chips seem cool, and they had a nice model release with Astra. But, that doesn't mean they've solved the profitability question during an era of rapidfire open-weight model releases, extreme memory shortages, and intense political pushback.

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vessenes 34 minutes ago | parent | next [-]

I think that implies they're seeing unusual new subscription demand, yes? That's how I'd read it, not least because I worked through four resets this week on Astra, which is un unbelievable amount more inference than I've wanted from openAI really ever, and the highest ratio vs. claude since opus 4 at the very least, probably farther back.

I think there are few moats in the engineering use case, and a single new model can absolutely drive compute demand.

	▲	deepwoods 10 minutes ago \| parent [-]
		High demand is great, but it doesn't say anything about your margins. If anything, it is probably a weak negative signal that they are pausing signups but not raising prices. In most markets, the answer to excess demand is to raise prices. If you can't meet demand and you can't raise prices, you're a sitting duck waiting to get your lunch eaten by somebody who can absorb that demand. And this is not the kind of market where people will just wait patiently for a differentiated product to be come available.

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NewJazz an hour ago | parent | prev [-]

I agree with some of your points, but wouldn't memory shortages actually work in OpenAI's favor? Part of the reason for the shortage is them prepurchasing hardware, so higher prices for memory and other chips would make self-hosting and competing inference providers less competitive.

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vb-8448 26 minutes ago | parent | prev | next [-]

Debt cost is high since some time, going public probably is just cheaper.

Anyway, any evidence for "prices are moving inference to highly profitable" because they are still selling $20 for $1 with their subscriptions.

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gamblor956 19 minutes ago | parent | prev | next [-]

Companies that plan to go public don't push back their IPO dates if things are going well. It's a universal sign that the finances aren't in order when a company pushes back its IPO multiple times.

OpenAI and Anthropic are barely profitable on a "unit" basis when ignoring the costs of marketing and other COSS expenses. They're definitely not profitable on an EBITDA or GAAP basis or they'd already have IPO'd.

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dofm an hour ago | parent | prev [-]

> Prices are moving inference to highly profitable

I hate to wave the Wikipedian protester sign, but...

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vessenes 34 minutes ago | parent [-]

Sorry, I don't understand what this means. What does it mean?

	▲	dofm 25 minutes ago \| parent \| next [-]
		Sorry, yes, all the other replies are right and I was just being a bit mischievous.
	▲	klik99 23 minutes ago \| parent \| prev \| next [-]
		I believe he's saying "Citation Needed" - It does seem the opposite is true, while maybe token cost is going down, frontier models use a lot more, so it's no an accurate gauge of cost. Trying to find any chart of token cost, I found this which looks like inference cost is going up: https://tokenpriceindex.com/ . Of course frontier models are becoming far more useful, but if you're claiming prices are becoming highly profitable then are you saying this increasing price is actually able to cover server costs now? My understanding it was still sold at a loss. And token price increases have turned major companies off the hyper use they tried out early in the year, using it more sparingly. I don't doubt it'll be a solid business, but it's not shaping out to be the hugely scalable business openai promised.
	▲	Octoth0rpe 27 minutes ago \| parent \| prev \| next [-]
		They are referencing xkcd 285: https://xkcd.com/285/ IE, please provide a citation for the claim.
	▲	andrewflnr 28 minutes ago \| parent \| prev \| next [-]
		https://xkcd.com/285/
	▲	papa-whisky 29 minutes ago \| parent \| prev [-]
		I'm assuming it means "citation needed".