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Are OpenAI and Anthropic losing money on inference?

martinalderson.com

421–430 of 495 posts

Re: Are OpenAI and Anthropic losing money on inference?

#421

Earlier quoted context omitted.

Are you saying that you think Sonnet 4 has 100B-200B _active_ params? And that Opus has 2T active? What data are you basing these outlandish assumptions on?

Not everyone uses MoE architectures. It's not outlandish at all...

There's no way Sonnet 4 or Opus 4 are dense models.

Re: Are OpenAI and Anthropic losing money on inference?

#422
post #403

Earlier quoted context omitted.

In a recent episode of Hard Fork podcast, the hosts discussed an on-the-record conversation they had with Sam Altman from OpenAI. They asked him about profitability and he claimed that they are losing money mostly because of the cost of training. But as the model advances, they will train less and less. Once you take training out of the equation he claimed they were profitable based on the cost of serving the trained…

> most AI companies are losing money right now which is completely "normal" at this point, """right"""? if you have billions of VC money chasing returns there's no time to sit around, it's all in, the hype train doesn't wait for bootstrapping profitability. and of course with these gargantuan valuations and mandatory YoY growth numbers, there is no way they are not fucking with the unit economy numbers too. (biases a…

Does the cost of good come down 10x or not? For say Uber it didn’t, so we went from great $6 VC funded product to mediocre $24 ride product we have today. I’m not sure I’m going to use Copilot at $1 per request. Or even $0.25. Starts to approach overseas consultant in price and ability.

Re: Are OpenAI and Anthropic losing money on inference?

#423

Earlier quoted context omitted.

Are you saying that you think Sonnet 4 has 100B-200B _active_ params? And that Opus has 2T active? What data are you basing these outlandish assumptions on?

Oh nothing official. There are people who estimate the sizes based on tok/s, cost, benchmarks etc. The one that most go on is https://lifearchitect.substack.com/p/the-memo-special-editio... . This guy estimated Claude 3 opus to be 2T param model (given the pricing + speed). Opus 4 is 1.2T param according to him (but then I dont understand why the price remained the same.). Sonnet is estimated by various people to be…

tok/s cannot in any way be used to estimate parameters. It's a tradeoff made at inference time. You can adjust your batch size to serve 1 user at a huge tok/s or many users at a slow tok/s.

Re: Are OpenAI and Anthropic losing money on inference?

#425

This article's math is wrong on many fundamental levels. One of the most obvious ones is that prefill is nowhere near bandwidth bound. If you compute out the MFU the author gets it's 1.44 million input tokens per second * 37 billion active params * 2 (FMA) / 8 [GPUs per instance] = 13 Petaflops per second. That's approximately 7x absolutely peak FLOPS on the hardware. Obviously, that's impossible. There's many other…

As much as I appreciate you saying the math is wrong, it doesn’t really help me adjust my expectations unless you provide correct numbers as well.

Re: Are OpenAI and Anthropic losing money on inference?

#426
A few things:

1. Your token count per day seems quite low ("2M input tokens, ~30k output tokens/day") - that's FAR less than I'd expect,, for comparison I average 330M - 850M combined tokens per day, I'm on the higher side of my peers that average 150M-600M combined tokens per day.

2. It doesn't seem you're taking prompt caching into account. This generally reduces the inference required for agentic coding by 85-95%.

3. It would be good if you added what quantisation you're running, for example 8.5-9bpw / (Q8 equivalent) (indistinguishable from fp32/bf16) for the model, and for the KV cache (Q8/(b)f16 etc..).

Re: Are OpenAI and Anthropic losing money on inference?

#427

Earlier quoted context omitted.

Thanks for the correction (author here). I'll update the article - very fair point on compute on input tokens which I messed up. Tbh I'm pleased my napkin math was only 7x off the laws of physics :). Even rerunning the math on my use cases with way higher input token cost doesn't change much though.

The 32 parallel sequences is also arbitrary and significantly changes your conclusions. For example, if they run with 256 parallel sequences then that would result in a 8x cheaper factor in your calculations for both prefill and decode. The component about requiring long context lengths to be compute-bound for attention is also quite misleading.

Anyone up to publishing their own guess range?

Re: Are OpenAI and Anthropic losing money on inference?

#428
post #414

Earlier quoted context omitted.

In a recent episode of Hard Fork podcast, the hosts discussed an on-the-record conversation they had with Sam Altman from OpenAI. They asked him about profitability and he claimed that they are losing money mostly because of the cost of training. But as the model advances, they will train less and less. Once you take training out of the equation he claimed they were profitable based on the cost of serving the trained…

> But as the model advances, they will train less and less. They sure have a lot of training to do between now and whenever that happens. Rolling back from 5 to whatever was before it is their own admission of this fact.

I think that actually proves the opposite. People wanted an old model, not a new one, indicating that for that user base they could have just... not trained a new model.

Re: Are OpenAI and Anthropic losing money on inference?

#429

Earlier quoted context omitted.

There's no way Sonnet 4 or Opus 4 are dense models.

Citation needed

Common sense:

- The compute requirements would be massive compared to the rest of the industry

- Not a single large open source lab has trained anything over 32B dense in the recent past

- There is considerable crosstalk between researchers at large labs; notice how all of them seem to be going in similar directions all the time. If dense models of this size actually provided benefit compared to MoE, the info would've spread like wildfire.

Re: Are OpenAI and Anthropic losing money on inference?

#430
On the latest episode of the Hard Fork podcast, they mentioned they’d just been at an on the record dinner with OpenAI. According to them, Sam said they’re profitable if you exclude the cost of training new models, but his CFO corrected him and said they’re close to that.
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