7 ms·

Its not subsidized, in fact, they probably have very healthy margins on Claude Code.

by eldenring 7mo ago

phi-go 7mo ago
Why do you think that?
- noosphr 7mo ago
  Because if you don't then current valuations are a bublle propped inflated by burning a mountain of cash.
  - cies 7mo ago
    And that's OpenAI's biz model? :)
  - falcor84 7mo ago
    That's not how valuations work. A company's valuation is typically based on an NPV (net present value) calculation, which is a power series of its time-discounted future cash flows. Depending on the company's strategy, it's often rational for it to not be profitable for quite a long while, as long as it can give investors the expectation of significant profitability down the line. Having said that, I do think that there is an investment bubble in AI, but am just arguing that you're not looking at the right signal.
- johndough 7mo ago
  DeepSeek had a theoretical profit margin of 545 % [1] with much inferior GPUs at 1/60th the API price. Anthropic's Opus 4.6 is a bit bigger, but they'd have to be insanely incompetent to not make a profit on inference. [1] https://github.com/deepseek-ai/open-infra-index/blob/main/202502OpenSourceWeek/day_6_one_more_thing_deepseekV3R1_inference_system_overview.md#statistics-of-deepseeks-online-service https://github.com/deepseek-ai/open-infra-index/blob/main/20...
  - DANmode 7mo ago
    > they'd have to be insanely incompetent to not make a profit on inference. Are you aware of how many years Amazon didn’t turn a profit? Not agreeing with the tactic - just…are you aware of it?
    - arexxbifs 7mo ago
      Amazon was founded in 1994, went public in 1997 and became profitable in 2001. So Anthropic is two years behind with the IPO but who knows, maybe they'll be profitable by 2028? OpenAI is even more behind schedule.
      - poisonborz 7mo ago
        How much loss did they accumulate until 2001? Pretty sure it wasn't the 44 billion OpenAI has. And Amazon didn't have many direct competitors offering the same services.
    - johndough 7mo ago
      Did Amazon really not turn a profit, or apply a bunch of tricks to make it appear like they didn't in order to avoid taxes? Given their history, I'd assume the later: https://en.wikipedia.org/wiki/Amazon_tax_avoidance https://en.wikipedia.org/wiki/Amazon_tax_avoidance Anyway, this has nothing to do with whether inference is profitable.
      - DANmode 7mo ago
        It has everything to do with whether they make profit on paper, vs give away the farm via free tier accounts, free trials, and last but not least: subsidized compute to hook entire organizations………
  - computerex 7mo ago
    American labs trained in a different way than the Chinese labs. They might be making profit on inference but they are burning money otherwise.
elzbardico 7mo ago
Yeah. If you ignore the negligible fact that some investor may want a return on all that money that is going into capex I am pretty sure you can, Enron style, get to the conclusion that any of those companies have “healthy” margins.

Its not subsidized, in fact, they probably have very healthy margins on Claude Code.

phi-go 7mo ago

Why do you think that?

noosphr 7mo ago
Because if you don't then current valuations are a bublle propped inflated by burning a mountain of cash.
- cies 7mo ago
  And that's OpenAI's biz model? :)
- falcor84 7mo ago
  That's not how valuations work. A company's valuation is typically based on an NPV (net present value) calculation, which is a power series of its time-discounted future cash flows. Depending on the company's strategy, it's often rational for it to not be profitable for quite a long while, as long as it can give investors the expectation of significant profitability down the line. Having said that, I do think that there is an investment bubble in AI, but am just arguing that you're not looking at the right signal.
johndough 7mo ago
DeepSeek had a theoretical profit margin of 545 % [1] with much inferior GPUs at 1/60th the API price. Anthropic's Opus 4.6 is a bit bigger, but they'd have to be insanely incompetent to not make a profit on inference. [1] https://github.com/deepseek-ai/open-infra-index/blob/main/202502OpenSourceWeek/day_6_one_more_thing_deepseekV3R1_inference_system_overview.md#statistics-of-deepseeks-online-service https://github.com/deepseek-ai/open-infra-index/blob/main/20...
- DANmode 7mo ago
  > they'd have to be insanely incompetent to not make a profit on inference. Are you aware of how many years Amazon didn’t turn a profit? Not agreeing with the tactic - just…are you aware of it?
  - arexxbifs 7mo ago
    Amazon was founded in 1994, went public in 1997 and became profitable in 2001. So Anthropic is two years behind with the IPO but who knows, maybe they'll be profitable by 2028? OpenAI is even more behind schedule.
    - poisonborz 7mo ago
      How much loss did they accumulate until 2001? Pretty sure it wasn't the 44 billion OpenAI has. And Amazon didn't have many direct competitors offering the same services.
  - johndough 7mo ago
    Did Amazon really not turn a profit, or apply a bunch of tricks to make it appear like they didn't in order to avoid taxes? Given their history, I'd assume the later: https://en.wikipedia.org/wiki/Amazon_tax_avoidance https://en.wikipedia.org/wiki/Amazon_tax_avoidance Anyway, this has nothing to do with whether inference is profitable.
    - DANmode 7mo ago
      It has everything to do with whether they make profit on paper, vs give away the farm via free tier accounts, free trials, and last but not least: subsidized compute to hook entire organizations………
- computerex 7mo ago
  American labs trained in a different way than the Chinese labs. They might be making profit on inference but they are burning money otherwise.

elzbardico 7mo ago

Yeah. If you ignore the negligible fact that some investor may want a return on all that money that is going into capex I am pretty sure you can, Enron style, get to the conclusion that any of those companies have “healthy” margins.