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Earlier quoted context omitted.
Probably all three: 1) They hiring too talent to make their models as efficient as possible. 2) They have a sweetheart deal with MS. 3) They’re better funded than everyone else and bringing in substantial revenue.
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Is this a reflection of OpenAI’s massive scale making it so cheap for them? Or is it the deal with Microsoft for cloud services making it cheap? Or are they just operating at a massive loss to kill off other competition? Or something else?
Earlier quoted context omitted.
Probably all three: 1) They hiring too talent to make their models as efficient as possible. 2) They have a sweetheart deal with MS. 3) They’re better funded than everyone else and bringing in substantial revenue.
deleted
Is this a reflection of OpenAI’s massive scale making it so cheap for them? Or is it the deal with Microsoft for cloud services making it cheap? Or are they just operating at a massive loss to kill off other competition? Or something else?
Probably all three: 1) They hiring too talent to make their models as efficient as possible. 2) They have a sweetheart deal with MS. 3) They’re better funded than everyone else and bringing in substantial revenue.
Apple may be leading the way here, with Apple Silicon prioritizing AI processing and built into all their devices. These capabilities are free (or at least don't require an extra sub), and just used to sell more hardware.
OpenAI is clearly going to compete in that market with its upcoming smart phone or device [1]. But what revenue model can OpenAI use to compete with Apple's and not get undercut by it? I suppose hardware + free GPT3.5, and optional subscription to GPT4 (or whatever their highest end version is). Maybe that will be competitive.
I also wonder what mobile OS OpenAI will choose. Probably not Android, otherwise they would have partnered with Google. A revamped and updated Microsoft mobile OS maybe, given their MS partnership? Or something new and bespoke? I could imagine Johnny Ive demanding something new, purpose-built, and designed from scratch for a new AI-oriented UI/UX paradigm.
A market for increasingly sophisticated AI that can only be done in huge GPU datacenters will exist, and that's probably where the margins will be for a long time. I think that's what OpenAI, Microsoft, Google, and the others will be increasingly competing for.
[1]:https://www.reuters.com/technology/openai-jony-ive-talks-rai...
I’m confused don’t a100s cost 10,000 to buy? Why would you pay 166k per year to rent?
7 months later, nothing's changed surprisingly. Even open-source models are trickier to get to be more cost-effective despite the many inference optimizations since. Anthropic Claude is closer to price and quality effectiveness now, but there's no reason to switch.
Is this a reflection of OpenAI’s massive scale making it so cheap for them? Or is it the deal with Microsoft for cloud services making it cheap? Or are they just operating at a massive loss to kill off other competition? Or something else?
Probably the first two, plus first-mover brand recognition. Millions of $20 monthly subs for GPT4 add up. They might also be operating at a loss afaik, but I suspect they're one of the few that can break even just based on scale, brand recognition, and economics.
I’m confused don’t a100s cost 10,000 to buy? Why would you pay 166k per year to rent?
Spending the capex/opex to run a cluster of compute isn't easy or cheap. It isn't just the cost of the GPU, but the cost of everything else around it that isn't just monetary.