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Are OpenAI and Anthropic losing money on inference?

martinalderson.com

131–140 of 495 posts

Re: Are OpenAI and Anthropic losing money on inference?

#131

From https://www.theverge.com/command-line-newsletter/759897/sam-... , Sam Altman said: > “If we didn’t pay for training, we’d be a very profitable company.”

Yeah Dario has said similar things in interviews. The way he explained it, if you look at each specific model (such as Sonnet 3.5) as its own separate company, then each one of them is profitable in the end. They all eventually recoup the expense of training, thanks to good profit margins on usage once they are deployed.

Re: Are OpenAI and Anthropic losing money on inference?

#132

These numbers are off. > $20/month ChatGPT Pro user: Heavy daily usage but token-limited ChatGPT Pro is $200/month and Sam Altman already admitted that OpenAI is losing money from Pro subscriptions in January 2025: "insane thing: we are currently losing money on openai pro subscriptions! people use it much more than we expected." - Sam Altman, January 6, 2025 https://xcancel.com/sama/status/1876104315296968813

Apologies, should be Plus. I'll update the article later.

Re: Are OpenAI and Anthropic losing money on inference?

#133

This whole article is built off using DeepSeek R1, which is a huge premise that I don't think is correct. DeepSeek is much more efficient and I don't think it's a valid way to estimate what OpenAI and Anthropic's costs are. https://www.wheresyoured.at/deep-impact/ Basically, DeepSeek is _very_ efficient at inference, and that was the whole reason why it shook the industry when it was released.

DeepSeek inference efficiency comes from two things: MoE and MLA attention. OpenAI was rumored to use MoE around GPT4 moment, I.e loooong time ago.

Given Gemini efficiency with long context I would bet their attention is very efficient too.

GPT OSS uses fp4, which DeepSeek doesn’t use yet btw.

So no, big labs aren’t behind DeepSeek in efficiency. Not by much at least.

Re: Are OpenAI and Anthropic losing money on inference?

#135

From https://www.theverge.com/command-line-newsletter/759897/sam-... , Sam Altman said: > “If we didn’t pay for training, we’d be a very profitable company.”

Or if they had to pay copyright costs. So much pirated data being repackaged and sold.

It’s not being repackaged. That question has already been settled by at least two courts.

Re: Are OpenAI and Anthropic losing money on inference?

#136

This whole article is built off using DeepSeek R1, which is a huge premise that I don't think is correct. DeepSeek is much more efficient and I don't think it's a valid way to estimate what OpenAI and Anthropic's costs are. https://www.wheresyoured.at/deep-impact/ Basically, DeepSeek is _very_ efficient at inference, and that was the whole reason why it shook the industry when it was released.

The "efficiency" meantioned in blog post you have linked is the price difference between Deepseek and o1, it doesn't mean that GPT-5 or other SOTA models are less efficient.

Re: Are OpenAI and Anthropic losing money on inference?

#137
post #60

Earlier quoted context omitted.

Yes. I was really surprised at this myself (author here). If you have some better numbers I'm all ears. Even on my lowly 9070XT I get 20x the tok/s input vs output, and I'm not doing batching or anything locally. I think the cache hit vs miss stuff makes sense at >100k tokens where you start getting compute bound.

I linked to the writeup by Deepseek with their actual numbers from production, and you want "better numbers" than that?! > Each H800 node delivers an average throughput of ~73.7k tokens/s input (including cache hits) during prefilling or ~14.8k tokens/s output during decoding. That's a 5x difference, not 1000x. It also lines up with their pricing, as one would expect. (The decode throughputs they give are roughly equ…

A good rule of thumb is that a prefill token is about 1/6th the compute cost of decode token, and that you can get about 15k prefill tokens a second on Llama3 8B on a single H100. Bigger models will require more compute per token, and quantization like FP8 or FP4 will require less.

Re: Are OpenAI and Anthropic losing money on inference?

#138

These numbers are off. > $20/month ChatGPT Pro user: Heavy daily usage but token-limited ChatGPT Pro is $200/month and Sam Altman already admitted that OpenAI is losing money from Pro subscriptions in January 2025: "insane thing: we are currently losing money on openai pro subscriptions! people use it much more than we expected." - Sam Altman, January 6, 2025 https://xcancel.com/sama/status/1876104315296968813

Anyone paying attention should have zero trust in what Sam Altman says.

Re: Are OpenAI and Anthropic losing money on inference?

#139
post #42

"Here's the key insight: each forward pass processes ALL tokens in ALL sequences simultaneously." This sounds incorrect, you only process all tokens once, and later incrementally. It's an auto-regressive model after all.

Not during prefill, i.e. the very first token generated in a new conversation. During this forward pass, all tokens in the context are all processed at the same time, and then attention's KV are cached, you still generate a single token, but you need to compute attention from all tokens to all tokens. From that point on every subsequent tokens is processed sequentially in autoregressive way, but because we have the K…

I somehow missed the "decode phase" paragraph and hence was confused - it's essentially that separation I meant, you're obviously correct.

Re: Are OpenAI and Anthropic losing money on inference?

#140
post #114

These numbers are off. > $20/month ChatGPT Pro user: Heavy daily usage but token-limited ChatGPT Pro is $200/month and Sam Altman already admitted that OpenAI is losing money from Pro subscriptions in January 2025: "insane thing: we are currently losing money on openai pro subscriptions! people use it much more than we expected." - Sam Altman, January 6, 2025 https://xcancel.com/sama/status/1876104315296968813

That doesn't seem compatible with what he stated more recently: > We're profitable on inference. If we didn't pay for training, we'd be a very profitable company. Source: https://www.axios.com/2025/08/15/sam-altman-gpt5-launch-chat... His possible incentives and the fact OpenAI isn't a public company simply make it hard for us to gauge which of these statements is closer to the truth.

This can be true if you assume that there exists a high number of $20 subscribers who don't use the product that much, but $200 subscribers squeeze every last bit and then some more. The balance could be still positive, but if you look at the power users alone, they might cost more than they pay.
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