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Aaaaaallan Deutsch
@allandeutsch.com

Right now many services are subsidized and the companies behind them are buying up compute + memory + storage en masse, resulting in the hardware being more expensive. As subsidies decrease and prices go up, i expect demand for services and HW costs will come down. Could change the economics.

Ed
@ed3d.net

I think it's important note: to many _services_ are subsidized (VC gotta VC) but absolutely nobody is selling tokens at a loss at this point. The money is accruing, it's the middlemen layer that's gonna get got.

Aaaaaallan Deutsch
@allandeutsch.com

I may be uninformed, but my impression is that nobody is doing the combination of [training, inference as a service] profitably yet. AFAIK profits come from either: - running a model someone else trained - some other business that funds the AI work Am I mistaken? OAI/Ant profitable now?

Ed
@ed3d.net

No, I think that's still true, but lots of people are selling inference while not doing training, and that shouldn't be forgotten. And OAI/Anthropic's training budgets, tbh, don't really interest me now either -- we are at the stage where model dev could 100% stop and we would be Just Fine, so, eh.

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John Allsopp
@johnfallsopp.com

This is quite long but addresses a lot of the cost part as well as anyone outside the labs Dylan Patel – Anthropic & OpenAI will have most of the world’s compute by 2028 — Dwarkesh Podcast hopper.webdirections.org/share/aaf663...

hopper.webdirections.orgDylan Patel – Anthropic & OpenAI will have most of the world’s compute by 2028Dwarkesh interviews Dylan Patel, founder of Semi Analysis, about the rapid growth and centralization of AI compute, projecting that Anthropic and OpenAI will control most of the world's usable compute...
Aaaaaallan Deutsch
@allandeutsch.com

I agree! However, as long as _someone_ is doing model dev, companies who aren’t will see declining demand. I felt that gpt 5.4 was good enough, and then along came Sol & others and I wouldn’t want to go back. Probably that trend continues for a while.