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> But the big labs have claimed they are profitable on inference. As the accountants say, profit is an opinion, but cash flow is a fact. Like, if these compan
by disgruntledphd2 2mo ago
> But the big labs have claimed they are profitable on inference.
As the accountants say, profit is an opinion, but cash flow is a fact.
Like, if these companies are profitable on inference (depends on how you count training expenses I suspect), then they shouldn't need to raise more money.
For reference, Anthropic appear to have raised about $130bn, which is a lot. Assuming that OpenAI have raised about the same.
Even to get a 2x return on this investment they'd need to start making about $50bn per annum (profit, not revenue) for 10 years. That's Google level net income, on a very very different business (google's business is much more capital efficient).
I personally find that very unlikely, but we'll see I guess.
> a detailed analysis of capex spend and amortization
This is kinda irrelevant unless they are making money (which the hyperscalers are, and the pure play model companies are not).
- npilk 2mo agoYes, discussion like this is why I'd love to see a deeper analysis of the full value chain. Right now it's mostly speculation (beyond 'gee, everyone sure is spending a lot of money'). Obviously more detailed data isn't easily available to report on, but I'd like to know: - What are the labs spending on compute specifically to serve models? Are they really profitable "on inference" of existing models? If so, how long is the payback period to recoup their training costs for those existing models only? If not, how much would prices need to rise to be profitable? - How much capex have the hyperscalers invested in just the compute being used to serve those existing models? Are they making money "on inference" when accounting for just that amortized capex? If so, what are the margins like? - What share of hyperscalers' AI revenue is from training vs inference? (Presumably training is more dependent on VC investment and inference is more self-sustaining.)
- disgruntledphd2 2mo agoI would like to know all of these things too, hopefully the S-1 from either OpenAI or Anthropic will tell us more.