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I assumed that Microsoft gave them discount and credits as investment, but the cost by itself is like any other big customer can get.
by hintymad 2y ago
I assumed that Microsoft gave them discount and credits as investment, but the cost by itself is like any other big customer can get.
- azinman2 2y agoOf course the cost isn’t near zero, but is the pricing “at Microsoft’s cost”? If it is, then them building a datacenter wouldn’t save anything, plus would have enormous expenses related to, well, building, maintaining, and continuously upgrading data centers.
- hintymad 2y agoGood point. I updated the assumption accordingly. I assume the cost of using Azure cloud after discount but before the credit will be on par with Azure's big customers. And given the scale of OAI, I suspect that the only way to be profitable is to have their own infra.
- adastra22 2y agoThe cost of vertically integrated inference isn’t zero either.
- lesuorac 2y agoWouldn't it be foolish for microsoft to give them a discount? Like you could discount say a 10B investment down to 6B or w/e the actual costs are but now your share of OpenAI is based on 6B. Seems better to me to give OpenAI a "10B" investment that internally only costs 6B so your share of OpenAI is based on 10B. Plus OpenAI probably likes the 10B investment more as it raises their market cap.