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Both can be true simultaneously. American companies were comfortable with a high cost structure because it padded their revenue numbers. The government tried to
by conjecTech 2mo ago
Both can be true simultaneously. American companies were comfortable with a high cost structure because it padded their revenue numbers. The government tried to block out competitors through import/export controls, and it ended up backfiring by creating more efficient competitors. Very similar to our competition with Japan in the 80s. We'll see if we give the AI labs the kinds of sweetheart protectionism that US car makers got.
- phoghed 2mo agoCan you explain better how OpenAI, for example, would simultaneously subsidize tokens while overcharging for them? Not sure I get it.
- solarmist 2mo agoAs one example: Different access patterns. If you're using the app and have a subscription you get cheap tokens in the hopes you need more at which point you pay API prices which are much more expenseive.
- phoghed 2mo agoI agree with that. However, there’s much dialogue around subsidized tokens for business use too, that people paying for the tokens are also vastly underpaying vs the “real” cost. I certainly don’t know the answer to that. Maybe the Chinese companies are also doing it. Maybe nobody is doing it. Looking at reserved capacity cost for PTUs on azure, which I think they’d probably not subsidize but can’t be sure, I’m inclined to not agree with the vast undercharging for tokens hypothesis.
- solarmist 2mo agoBulk discounts are definitely a thing. Even established businesses do that. But the biggest discount people see is subscriptions. You get a few thousand dollars of work from a couple hundred dollars.
- pimeys 2mo agoWait, there's 13 providers for Kimi K3 in OpenRouter. I'm having a hard time believing every single one of them provides them without any profit. And this one is easy to calculate: take your monthly API spend to K3, then rent a stack of 8xB300 for a month and see how much it costs. I would say you're about to save 10-15k dollars per month if you have enough traffic compared to pay per token pricing. It's not very complex math, and the hardware of course is cheaper if you bought it last year and if you have extra GPUs waiting in your warehouse (depending on if you can produce enough energy cheaply).
- square_usual 2mo agoIt's simple, they aren't subsidizing tokens at all.
- Der_Einzige 2mo agoTrue for api pricing across the industry. Not as true for 200$ a month plans assuming you used every bit of it.
- pfisch 2mo agoI don't think that kind of protectionism will work with a digital asset. It is much more difficult to erect barriers when there are no physical goods and transportation across geographic borders is instant and free.
- conjecTech 2mo agoIt will likely be on the enterprise side if it happens. Hard to control supply, but if demand is concentrated to a few hundred entities, that's easy to do.