Remember that OpenAI is subsidized from here to the highway.
A better way to model this, since you seem interested is the following:
How much would it cost you to start such a service for, say, 10k users?
Any other internet service has had virtually Zero cost, $0. Google, Facebook, youtube, Wikipedia, you name it. They all went into the dumpster to pick up a thrown away desktop computer, and they could serve up towards 100k if not a million users.
How much would it cost you to serve, say, 10k simultaneous users with a SOTA model? And if you wanted to go cash positive after a year, how much would each user have to pay?
> How much would it cost you to serve, say, 10k simultaneous users with a SOTA model? And if you wanted to go cash positive after a year, how much would each user have to pay?
My post has this same argument - we have multiple third party companies running open weight models. They are obviously not subsidised. And people are willing to pay for it. And these models are as good as the SOTA models from last year. So this kinda proves my point that SOTA is sustainable.
I'm simply saying this: there are third party hosters of Open Weight models like deepseek and they have been doing this for a while.
Obviously they are not subsidised, do you disagree? If you agree, they have a way to price it at a point that people wanna pay for it and also they aren't losing money.
So there's nothing inherent about inference that makes it too costly or whatever.
> I'm simply saying this: there are third party hosters of Open Weight models like deepseek and they have been doing this for a while.
> Obviously they are not subsidised, do you disagree? If you agree, they have a way to price it at a point that people wanna pay for it and also they aren't losing money.
> So there's nothing inherent about inference that makes it too costly or whatever.
Do we have audited GAAP financial data for any of these companies? If we don't, all these are... vibes, man.
I'll bet 50€ that big AI companies (OpenAI, Anthropic, xAI) have bad regarding their core financials. Excluding one time deals such as renting hardware, external cash infusions, the core AI model business (training models and selling inference) is unprofitable and will be be at the expected scales (50 billion € or more) for the next 5 years at least.
I bet that within 5 years they will be sold for scrap to bigger companies and will become divisions inside them.
1. You can't have a model without training. Training is part of the cost. A model trained 5 years ago is borderline useless. Also models cannot be retrained continuously, we do not have the technology (even if we had it, it would just increase the ongoing operational cost).
2. Rephrasing your statement:
At June 2026 prices, profit margins for all Anthropic models are >10%.
That claim is super defensive. Serving a model can only be done if the model has been built and trained, can't have it any other way. Building it and training it costs lots of money.
Even so, fine, I'll take that bet. Anthropic inference prices are still marginally subsdizided. Once they're public they will hike their API prices several times over the next 24 months. Even that might not save them, because when we take all their expenses into account, they will probably need to raise prices 2-3x compared to their June 2026 prices.
> Even so, fine, I'll take that bet. Anthropic inference prices are still marginally subsdizided. Once they're public they will hike their API prices several times over the next 24 months. Even that might not save them, because when we take all their expenses into account, they will probably need to raise prices 2-3x compared to their June 2026 prices.
Ok lets state the bet like this: 5 months after their IPO, it will be clear that their API prices still have greater than 10% margin.
Your whole calculation is also ridiculous - I think you assumed what revenue per month is required to pay off hardware within a year? Why would I use hardware within a year?
I would suggest consulting with ChatGPT and coming up with a better and more coherent argument.
I try to do some napkin math of what it takes to start a company serving an LLM to customers. I thought maybe 10,000 users sounded like a reasonable number.
I'd like also to compare it to traditional Internet companies, e.g. Twitter. I'd guess Twitter with 10k users would cost me literally a dumpster dive, so essentially no cost.
If I were to start an LLM company, what would my initial investment look like?
Turns out around 15+ million dollars assuming I would get 10,000 users willing to pay 200$/month.
But if you don't believe me, lets have a bet based on what the IPO filings show?