21–30 of 117 posts
"Please don't waste your breath saying "costs will come down." They haven't been, and they're not going to." Yes, every new technology has always stayed exorbitantly priced in perpetuity.
This is a really well written article and contains references to back up the claims made. This part was mind blowing though: > Cursor sends 100% of their revenue to Anthropic, who then takes that money and puts it into building out Claude Code, a competitor to Cursor. Cursor is Anthropic's largest customer. Cursor is deeply unprofitable, and was that way even before Anthropic chose to add "Service Tiers," jacking up…
Interesting to see what will happen if Cursor goes down...
I'm not making any claims as to whether AI will become profitable or when, but if there's a new tech that has high potential or is highly desirable, I think it's expected that initially money will be lost. Simply because strategically if there's high long term potential, it initially makes sense to put more money in than you get out of. Not saying that AI is this, but if you determined that you have a golden goose th…
The issue is we're moving past the "initially" phase and people are starting to suspect that the $10T golden goose is mythical. GPT-5??
I personally think that there's many levels of innovation still to come in terms of robotics, APIs/Frameworks/Coding languages/Infra specifically for LLMs to provide easier and more foolproof ways to code and do things otherwise. I think it's far from played out. I personally think that a lot of potential is still untapped.
I'm not making any claims as to whether AI will become profitable or when, but if there's a new tech that has high potential or is highly desirable, I think it's expected that initially money will be lost. Simply because strategically if there's high long term potential, it initially makes sense to put more money in than you get out of. Not saying that AI is this, but if you determined that you have a golden goose th…
This is a really well written article and contains references to back up the claims made. This part was mind blowing though: > Cursor sends 100% of their revenue to Anthropic, who then takes that money and puts it into building out Claude Code, a competitor to Cursor. Cursor is Anthropic's largest customer. Cursor is deeply unprofitable, and was that way even before Anthropic chose to add "Service Tiers," jacking up…
I don’t think it’s necessarily bad to be unprofitable but definitely weird to be sending 100% of your revenue to what is essentially your main competitor
> OpenAI spent 50% of its revenue on inference compute costs alone This means that they operate existing models with very healthy 50% profit margin, that’s excellent unit economics actually. Losing money by investing more into R&D that you make is not the same as burning it by selling a dollar for 90 cents.
Cost to run a million tokens through GPT-3 Da-Vinci in 2022: $60
Cost to run a million tokens through GPT-5 today: $1.25
Models trained in 2025 don’t ship until 2026/7. That means the $3bn in 2025 training costs show up as expense now, while the revenue comes later. Treating that as a straight loss is just confused.
OAI’s projected $5bn 2025 loss is mostly training spend. If you don’t separate that out with future revenues, you’re misreading the business.
And yes, inference gross margins are positive. No idea why the author pretends they aren’t.
I'm not making any claims as to whether AI will become profitable or when, but if there's a new tech that has high potential or is highly desirable, I think it's expected that initially money will be lost. Simply because strategically if there's high long term potential, it initially makes sense to put more money in than you get out of. Not saying that AI is this, but if you determined that you have a golden goose th…
Meanwhile, I stopped using AI months ago. Have no subscriptions to any of the AI services anymore. Life goes on, quality of life is pretty good, haven't suffered in any way nor do I feel like I'm missing out.