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It's also unclear wherever the subscription price is the real cost, or the API. I suspect it's closer to the sub price and anthropic is just milking their API
by ffsm8 1mo ago
It's also unclear wherever the subscription price is the real cost, or the API.
I suspect it's closer to the sub price and anthropic is just milking their API users, but that's something you'd only know from the inside
- deleted 1mo ago[deleted]
- HeatrayEnjoyer 1mo agoOpen weight SOTA models are not greatly cheaper than Anthropic and providers don't have to cover training capex.
- ElFitz 1mo ago> and providers don't have to cover training capex. How so?
- sethaurus 1mo agoWith an open-weights model, anyone with the hardware to run the model can act as a provider. The median provider pays nothing for the model, so they do not contribute to the cost of training it.
- ElFitz 1mo agoAh! Makes sense. Thanks!
- HeatrayEnjoyer 1mo agoProviders like Fireworks offer inference, they're not training their own models. Yet training is the most expensive part, inference is easy profit.
- ElFitz 1mo agoAnd even the ones who trained it can’t afford to offer it at a price covering their training capex, since any good open-source model will see other providers selling inference without any training expenses to cover. Didn’t see it, but it’s obvious in retrospect. Thanks!
- bonoboTP 1mo agoCosts also have to include the amortized training costs. But the API price is likely simply regular supply and demand, charging as much as the market will pay. Corporations are dropping insane amounts because it's still peanuts for many industries. Software has just been ridiculously cheap before AI. So high prices are still low for companies if it eases some bottlenecks.
- HWR_14 1mo agoThe costs only have to include amortized training costs if you are trying to be profitable overall. Having positive unit economics and VC subsidized fixed costs is pretty standard.
- Geezus_42 1mo agoWhat happens when the VCs decide to stop dumping more money onto the fire?
- HWR_14 1mo agoPositive unit economics means that inference as a business continues regardless. The VC's no longer dumping money in means no more training new models.
- bonoboTP 1mo agoNot if there is competition who does train newer and better models.
- jfaat 1mo agoBy lighting VC (public soon) money on fire...
- byzantinegene 1mo agothis would never work if the core business model requires your flagship product to be best-in-class.
- drawnwren 1mo agoGenerally speaking, B2B prices are rarely supply-and-demand priced in the usual sense. YC has advised startups in the past that it's easier to sell a single $100k customer than 100 $1k customers. It would also be relatively surprising to learn that i.e. the Chinese providers are OOMs better at inference than OAI/Anthropic (like their prices would imply if they were in a perfectly competitive market).
- bonoboTP 1mo agoChinese prices aren't really OOM cheaper. Deepseek recently did a big price hike too.
- drawnwren 1mo agoFair, I hadn't looked recently. It looks like currently kimi is either 1/2 or 1/4 Ant pricing depending on whether you think Opus 5 is usable or not. (Deepseek is still an OOM though)
- ronsor 1mo agoThe one thing I trust is that Chinese prices aren't overinflated. They're almost certainly closer to the actual cost of inference + training amortization than what Western labs are offering. DeepSeek's price hike is mostly driven by increased demand, for example. It's not about losses so much as they don't have enough infrastructure and need to reduce demand somehow.
- dragonwriter 1mo ago“It's also unclear wherever the subscription price is the real cost, or the API.” There is no “real cost” other than the cost actually charged.
- selcuka 1mo ago> It's also unclear wherever the subscription price is the real cost, or the API. Define cost: Is it only the inference cost to the provider, or do you also consider training costs as well? If it's the latter, how would you estimate the number of total tokens that will be sold for the current model (so that we can calculate marginal cost)?