Outsourcing plus LocalAI will soon become more economical vs. Frontier labs

Re:Outsourcing plus LocalAI will soon become more economical... by dminik on Wednesday May 27, 2026 @09:29AM (#48294060)

Without 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.

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Re:Outsourcing plus LocalAI will soon become more economical... by Forgeties79 on Wednesday May 27, 2026 @06:59PM (#48301917)

I don’t think it’s a gut feeling. It seems to be the consensus that subscriptions are still heavily subsidized

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Re:Outsourcing plus LocalAI will soon become more economical... by anthonypasq on Thursday May 28, 2026 @11:58AM (#48310815)

its well reported that inference margins on api pricing are 30-50%

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Re:Outsourcing plus LocalAI will soon become more economical... by dminik on Friday May 29, 2026 @06:31PM (#48330181)

No it's not. It's well speculated. Can you give a single source that says they have a 50% margin on inference?

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