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This is a good counter argument. But you have to note that this is after OpenAI cut Luna costs by 80%. If you compare launch pricing, Qwen probably comes out ah

This is a good counter argument. But you have to note that this is after OpenAI cut Luna costs by 80%. If you compare launch pricing, Qwen probably comes out ahead on a cost-performance basis.

jrflo 22d ago
The luna cost cuts were real though, not a one time promotion or something, due to some optimization (probably distillation?) that openai did.
- QwenGlazer9000 22d ago
  Was it? Given the timing, I think they A. shat their pants since Deepseek flash just came out with insane pricing before the price hikes, and B. Anthropic is really struggling in model tiers below opus. It was smart for them to cut prices regardless of whether they had 80% efficiency gains or not
- throwaw12 22d ago
  what if it was because of quantization and they haven't released the new benchmarks for it? Anything which changes the model needs new benchmarks I guess to compare with other models, otherwise you can benchmark Fable, and distill it to student model and keep claiming this is the Fable model
  - dannyw 22d ago
    ARC Prize has retested Luna after the discount and validated identical performance. (Also, quantization isn't inherently bad or damaging when done properly, e.g. QAT). These APIs are used heavily by enterprises at scale; with lots of performance telemetry, live evals, etc. You can't really silently nerf API models at scale without people noticing. Of course, what I said doesn't apply to non-API consumer sub models; there's many documented and officially confirmed instances of under-the-hood "juice/effort" adjustments. (Juice = a number your effort tier maps to underneath the hood; much like Inkling's effort=0.00 to 0.99).
- mattalex 22d ago
  You assume that openai's inference is profitable and that they aren't just trying to bolster revenue before their IPO. The only indication that openai is profitable comes from openai (whom I wouldn't trust with any statement, especially when it comes to profitability). In fact there is evidence that inference is not profitable simply because the rate of losses doesn't seem to reduce as revenue increases: if inference had great margins, we would expect that as revenues increase, the amount of spend on training reduces as a fraction of total expenses. Since the loss-making fixed costs shrink as a fraction compared to the profitable inference, we should expect profitability to rise with total revenue. However, all leaks of openai's numbers seem to suggest the opposite: as revenues increase so do the losses.
  - hluska 22d ago
    I don’t pay OpenAI’s bills - I pay what they charge me. Their cost accounting isn’t relevant to a user.
    - aaa_aaa 22d ago
      Argument was that open ai cannot be profitable with this. But sure, use it while you can.
      - mediaman 22d ago
        You can make the other argument that China subsidizes the price and that they can't be profitable at this pricing level. From an industrial strategy standpoint, they already do this for many other industries with huge subsidized state loans. So we can go round and round on this, each with our made-up objections about how it's temporary or unrealistic or impossible or whatever, or we can just accept the prices as listed and use that to guide our economic decisions.
        aaa_aaa 22d ago
        Private companies cannot play that game too long. Profit from current state of AI is a mirage and sooner or later stuff will hit the fan.
Almondsetat 22d ago
>If you compare launch pricing Why?
nl 21d ago
Why would anyone car what the launch price is? Comparing launch pricing is just an odd thing to do.
- rohansood15 21d ago
  Because labs can learn to optimize inference post launch, plus can move to use bigger/better clusters depending on demand. It is not impossible to imagine Qwen cuts prices further with QAT/MTP-like improvements.
  - nl 21d ago
    Or they could move from highly subsidized models like the Deepseek 4 launch pricing. Launch price is just like any other price. It's just a price. It's impossible to guess what might or might not happen. Compare the price now.

This is a good counter argument. But you have to note that this is after OpenAI cut Luna costs by 80%. If you compare launch pricing, Qwen probably comes out ahead on a cost-performance basis.

jrflo 22d ago

The luna cost cuts were real though, not a one time promotion or something, due to some optimization (probably distillation?) that openai did.

QwenGlazer9000 22d ago
Was it? Given the timing, I think they A. shat their pants since Deepseek flash just came out with insane pricing before the price hikes, and B. Anthropic is really struggling in model tiers below opus. It was smart for them to cut prices regardless of whether they had 80% efficiency gains or not
throwaw12 22d ago
what if it was because of quantization and they haven't released the new benchmarks for it? Anything which changes the model needs new benchmarks I guess to compare with other models, otherwise you can benchmark Fable, and distill it to student model and keep claiming this is the Fable model
- dannyw 22d ago
  ARC Prize has retested Luna after the discount and validated identical performance. (Also, quantization isn't inherently bad or damaging when done properly, e.g. QAT). These APIs are used heavily by enterprises at scale; with lots of performance telemetry, live evals, etc. You can't really silently nerf API models at scale without people noticing. Of course, what I said doesn't apply to non-API consumer sub models; there's many documented and officially confirmed instances of under-the-hood "juice/effort" adjustments. (Juice = a number your effort tier maps to underneath the hood; much like Inkling's effort=0.00 to 0.99).
mattalex 22d ago
You assume that openai's inference is profitable and that they aren't just trying to bolster revenue before their IPO. The only indication that openai is profitable comes from openai (whom I wouldn't trust with any statement, especially when it comes to profitability). In fact there is evidence that inference is not profitable simply because the rate of losses doesn't seem to reduce as revenue increases: if inference had great margins, we would expect that as revenues increase, the amount of spend on training reduces as a fraction of total expenses. Since the loss-making fixed costs shrink as a fraction compared to the profitable inference, we should expect profitability to rise with total revenue. However, all leaks of openai's numbers seem to suggest the opposite: as revenues increase so do the losses.
- hluska 22d ago
  I don’t pay OpenAI’s bills - I pay what they charge me. Their cost accounting isn’t relevant to a user.
  - aaa_aaa 22d ago
    Argument was that open ai cannot be profitable with this. But sure, use it while you can.
    - mediaman 22d ago
      You can make the other argument that China subsidizes the price and that they can't be profitable at this pricing level. From an industrial strategy standpoint, they already do this for many other industries with huge subsidized state loans. So we can go round and round on this, each with our made-up objections about how it's temporary or unrealistic or impossible or whatever, or we can just accept the prices as listed and use that to guide our economic decisions.
      - aaa_aaa 22d ago
        Private companies cannot play that game too long. Profit from current state of AI is a mirage and sooner or later stuff will hit the fan.

Almondsetat 22d ago

>If you compare launch pricing Why?

nl 21d ago

Why would anyone car what the launch price is? Comparing launch pricing is just an odd thing to do.

rohansood15 21d ago
Because labs can learn to optimize inference post launch, plus can move to use bigger/better clusters depending on demand. It is not impossible to imagine Qwen cuts prices further with QAT/MTP-like improvements.
- nl 21d ago
  Or they could move from highly subsidized models like the Deepseek 4 launch pricing. Launch price is just like any other price. It's just a price. It's impossible to guess what might or might not happen. Compare the price now.