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There we go back to the original question: are subscriptions profitable, API pricing wildly profitable, and they just lose all that money on fixed costs like mo
by wongarsu 5mo ago
There we go back to the original question: are subscriptions profitable, API pricing wildly profitable, and they just lose all that money on fixed costs like model training; or do they actually barely make money on inference?
That's why talking about the profitability of inference without accounting for model training is interesting, because that is the deciding factor in whether more customers would help getting them in the green
- dminik 5mo agoWithout actual data I don't know. My gut feeling is that they overall lose money on subscriptions (and especially the free tier that accounts for 95% of all users). And make thin profit (~5%) on API pricing. But it's just that. A gut feeling.
- Forgeties79 5mo agoI don’t think it’s a gut feeling. It seems to be the consensus that subscriptions are still heavily subsidized
- anthonypasq 5mo agoits well reported that inference margins on api pricing are 30-50%
- dminik 5mo agoNo it's not. It's well speculated. Can you give a single source that says they have a 50% margin on inference?