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They certainly are not providing these services at less than electricity costs. So if you are spending $20 a month on it, they are spending less than that on el
by danielmarkbruce 2y ago
They certainly are not providing these services at less than electricity costs. So if you are spending $20 a month on it, they are spending less than that on electricity. It's very low compared to any person in the first world's energy spend.
- LtWorf 2y agoHow do you know?
- danielmarkbruce 2y agoCommon sense, having been around cloud operations for a bit. The big cloud providers run gross margins around 30%. So if openai are using MSFT and getting a "good deal" maybe MSFT only get 20% GM. So, $1 of openai compute costs MSFT say $0.80. Of that cost of providing the service, something like 30-40% goes to electricity. So, lets say the electricity cost is $0.30 for $1 of OpenAI compute. (And that's probably a steelman, I think it's actually more like $0.20. ) There is about zero chance OpenAI are running their service at a 70% negative gross margin.
- LtWorf 2y agoDoesn't seem anything definitive to me.
- danielmarkbruce 2y agoNot definitive. But if you need a water tight argument to change your mind on something, you'll never change it.
- NoGravitas 2y agoActually, they probably are. OpenAI is projected to lose $5 billion this year in ChatGPT costs.
- MaybiusStrip 2y agoSpend, not lose. And it's mostly on training, not inference.
- kaoD 2y agoThey would need 250 million GPT Plus $20 subscribers to recoup a $5 billion expense. They're far from that even when we count the free users (which are likely 99% of the user base?) The math just doesn't work. They're hemorrhaging money as far as I can tell (not counting the Azure computing deal). We can only guess, but my guess is that inference is still a good chunk of their costs. That's why they're trying to get the mini/turbo models into a usable state. Even then, training is still an expense. And it's not like you can train and forget. Even if your model is already trained you still need to incorporate new knowledge over time.
- danielmarkbruce 2y agoRedo the math....
- deleted 2y ago[deleted]
- kaoD 2y agoOuch, $5b yearly of course!
- danielmarkbruce 2y agoMakes it seem more tenable huh. Honestly they could charge me $200 a month and I'd pay it.
- deleted 2y ago[deleted]