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I analyzed OpenAI API profitability in summer 2024 and found inference for gpt-4 class models likely pretty profitable, ~50% gross margins (ignoring capex for t
by ddp26 1y ago
I analyzed OpenAI API profitability in summer 2024 and found inference for gpt-4 class models likely pretty profitable, ~50% gross margins (ignoring capex for training models): https://futuresearch.ai/openai-api-profit https://futuresearch.ai/openai-api-profit
- otterley 1y agoThat’s a little like saying you can compute the profitability of the energy market by looking only at the margins of gas stations. You can’t exclude all the outlays on actually acquiring the product to sell.
- lazide 1y agoSure - but is there any doubt in that example that gas stations are making a profit? And unlike gasoline, once models are trained there is no significant ongoing production cost.
- otterley 1y agoModels aren't static. In order for them to remain relevant, they have to be constantly retrained with new data. Plus there's a model arms race going on and which will probably continue for the foreseeable future.
- lazide 1y agoFair point - though various distilling and retraining tricks do reduce the cost quite a bit. It’s not like everyone is doing all the work they had to do from scratch, every time.