There is absolutely no evidence to support this.
I want to see their S-1s, then we can fight.
In my opinion, it’s a profitable kind of service. They probably don’t pay the public prices for the cloud GPUs though.
Or, as I would say if I were Bugs Bunny, “Duck Season”
Obviously this is an extremely rough calculation. I can even be off by a factor of 10 and it's still a pretty good return.
Training is akin to the cost of building the software/product. Inference is selling the product.
Analysts like Semi-Analysis have done a lot of modeling and estimates on the topic.
But two can play this game: There is absolutely no evidence to support that API prices do not have profitable unit economics.
Typically the burden of proof is on the one making the claim.
They have some of the best publicly available analysis on these topics. The full details and numbers are hidden behind the institutional accounts which are priced for investors (not something you sign up for personally) but they're generous with what they send out in their newsletter.
If you're not familiar with resources like this I could understand how you'd assume that the providers are hemorrhaging money on inference costs, because that is that story that gets parroted around spaces like Hacker News.
You could ignore all of that, though, and go check OpenRouter to see how much providers are selling high parameter count models. They're not entirely at the level of the SOTA models, but the biggest open weight models are not that far behind in complexity either. They're being sold an order of magnitude cheaper than what you pay for the APIs from the major players. We don't know exactly how big the major models are, but it's unlikely that they're more than 10X more compute intensive from the leaks we do have.
The cost of AI inference has been a heavily analyzed topic. I trust the professional analysts much more than the casual Hacker News commenter claiming they’re losing money per token because they’re repeating what they heard some other Hacker News commenter say
nobody needs to prove their suspicions
I suspect the API prices are already served with profitable unit economics. The SOTA API prices are much higher than the costs for other providers to run very large open weight models.
The monthly subscription plans were being offered at a discount to generate interest in these models.
We're not entering a period of billing AI at cost. We're entering a period of exploring how how the prices can go before losing too many customers.
Products and services aren't sold at cost. They're sold at the price the market will bear. It takes some experimentation to find that equilibrium point where you make more profit per customer but don't lose too many customers.