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> they (and MS) are recouping inference costs from user subscription and API revenue with a healthy operating margin. I tried to Google for more information.

by throwaway2037 2y ago

> they (and MS) are recouping inference costs from user subscription and API revenue with a healthy operating margin. I tried to Google for more information. I tried this search: <<is openai inference profitable?>> I didn't find any reliable sources about OpenAI. All sources that I could find state this is not true -- inference costs are far higher than subscription fees. I hate to ask this on HN... but, can you provide a source? Or tell us how do you know?

manquer 2y ago
I don't have any qualified source and this metric would be likely be quite confidential even internally. It is just an educated guess factoring costs of running similar/comparable models to 4o or 4o-mini per token, and how azure commitments work with OpenAI models[2], also knowing that Plus subscriptions are probably more profitable[1] than API calls. It would be hard for even OpenAI to know with any certainty because they are not paying for Azure credits like a normal company. The costs are deeply intertwined with Azure and would be hard to split given the nature of the MS relationship[3] ---- [1] This is from experience of running LibreChat using 4o versus ChatGPT Plus for ~200 users, subscriptions should quite profitable than raw API by a order of 3 to 4x, of course different types of users and adoption levels will be there my sample while not small is not likely representative of their typical user base. [2] MS has less incentive to subsidize than say OpenAI themselves [3] Azure is quite profitable in the aggregate, while possibly subsidizing OpenAI APIs, any such subsidy has not shown up meaningfully in Microsoft financial reports.
- throwaway2037 2y ago
  Sam Altman posted to Twitter: > Insane thing: we are currently losing money on OpenAI pro subscriptions! people use it much more than we expected. Ref: https://techstartups.com/2025/01/06/openai-is-losing-money-on-openai-pro-subscriptions-ceo-sam-altman-says/ https://techstartups.com/2025/01/06/openai-is-losing-money-o...
  - akimbostrawman 2y ago
    Next he will tell us how open OpenAI is

manquer 2y ago

I don't have any qualified source and this metric would be likely be quite confidential even internally. It is just an educated guess factoring costs of running similar/comparable models to 4o or 4o-mini per token, and how azure commitments work with OpenAI models[2], also knowing that Plus subscriptions are probably more profitable[1] than API calls. It would be hard for even OpenAI to know with any certainty because they are not paying for Azure credits like a normal company. The costs are deeply intertwined with Azure and would be hard to split given the nature of the MS relationship[3] ---- [1] This is from experience of running LibreChat using 4o versus ChatGPT Plus for ~200 users, subscriptions should quite profitable than raw API by a order of 3 to 4x, of course different types of users and adoption levels will be there my sample while not small is not likely representative of their typical user base. [2] MS has less incentive to subsidize than say OpenAI themselves [3] Azure is quite profitable in the aggregate, while possibly subsidizing OpenAI APIs, any such subsidy has not shown up meaningfully in Microsoft financial reports.

throwaway2037 2y ago
Sam Altman posted to Twitter: > Insane thing: we are currently losing money on OpenAI pro subscriptions! people use it much more than we expected. Ref: https://techstartups.com/2025/01/06/openai-is-losing-money-on-openai-pro-subscriptions-ceo-sam-altman-says/ https://techstartups.com/2025/01/06/openai-is-losing-money-o...
- akimbostrawman 2y ago
  Next he will tell us how open OpenAI is