I can't read the original Chinese text, but if it's revenue, then you still can't say anything about profitability. Housing and powering one GPU should be way less than $38 per hour, so there should be a profit on inference. If that profit can cover training new models we don't know, but it would appear to not be the case.

For the past year or two I think it has generally been agreed that inference is profitable, but the LLM business as a whole is not.

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v9v 2 hours ago | parent | next [-]

I seem to recall the leaked Liang Wenfeng speech gave a figure of 8-12(?) months of inference recouping the training costs of the model.

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mathgeek an hour ago | parent | next [-]

I assume they need these models to stop being replaced in 1-2 months though.

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

Would that be due to the size of the models from DeepSeek or perhaps only for their distilled models? If it's for general purpose models that would crash the valuation of Anthropic and OpenAI, both who are struggling with profitabilitet to say the least.

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rustyhancock an hour ago | parent | prev [-]

It's really hard to unpick, for example, energy prices might be heavily subsidized for the Chinese models.

But it's clear that it's not the money burning pit I think it was just a year ago.

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benjiro29 an hour ago | parent [-]

China has a two tier energy system.

Consumer get the cheaper energy, while industry normally get the twice as expensive energy.

But for AI/Datacenters, there is a exception and they get the cheaper consumer level energy.

You need to take in account that the way China taxes is not the same as here in the West. And a lot more is put on the local governments regarding generating their own revenue (why there was so much building in China because those projects funded local government). A bit of a side topic lol. Its not so simple as they are making a loss on something because how its structured.

AI gets the cheaper tariffs then the rest of the industry, that is a fact. They simply have less energy profits on the AI energy. Now if you consider that subsidized or not, ... in both cases China is still making a profit.

What is overlooked is the massive amount of energy generation that China has and still keeps expanding. And that is a direct reflection upon why the prices for industry and consumers are so cheap. This buildout ironically had nothing to do with AI but was more about lower energy = cheaper industry production ... and a lot of buildout was also to build more independence from energy imports. They are not just throwing solar and wind turbines around like candy, the amount of reactors constructed and still under construction, ...

> China currently has 36 to 38 nuclear reactors under construction, maintaining the largest nuclear buildout in the world and accounting for roughly half of all global nuclear plant construction

So yea ... The AI in the west have a issue because it really does not matter if you cut China from Nvidia GPUs or advanced nodes, they compensate on the power level.

Edit: And a little extra, the irony is here in the West building nuclear is expensive as hell because we barely do one or two at the time. With a lot of lost expertise. China doing tons of them non-stop cuts down on the costs a lot.

	▲	mike_hearn 19 minutes ago \| parent \| next [-]
		China generates a lot of electricity but from what I understand prices aren't that much different to in the USA because of grid constraints.
	▲	ahartmetz 34 minutes ago \| parent \| prev \| next [-]
		>Consumer get the cheaper energy, while industry normally get the twice as expensive energy. Interesting. In Germany, industry gets the cheaper electricity...
	▲	rustyhancock an hour ago \| parent \| prev \| next [-]
		> China currently has 36 to 38 nuclear reactors under construction Wowza! Thanks for all the info really helpful to have insights into how it all works.
	▲	try-working 34 minutes ago \| parent \| prev [-]
		Sales tax in China is attributed to the place of production rather than the place of sale, which is why provinces want to produce as much as possible

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laylower 33 minutes ago | parent | prev | next [-]

What about sourcing the asset itself? It's like a factory is it not?

You pay for the asset (tenancy in a data center) and then you pay for housing, powering, cooling, etc.

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sylware 2 hours ago | parent | prev [-]

Unless the money of the investors is going somewhere else...