[Eridrus]

Your assumption is wrong.

The LLM companies are profitable on the current gen models. Inference is profitable, rather than subsidized.

They are raising the biggest chunk of capital to buy data center compute that will come online ~2 years from now and be an order of magnitude larger.

The bear case for the labs is that they're Cisco, not Pets.com.

[orderone_ai]

Do you have figures supporting that? Because so far everything I've seen points to current inference subscriptions being wildly unprofitable. It may be a bit dated, but I haven't seen any new reports on unit economics coming close. And forward projections for the data center side, which is the pure play of inference itself, says something like $40B of depreciation per year (assuming they take a full 10 years to depreciate) and maybe $15-20B of revenue to make up for that.

And that was before he gave his updated depreciation figures here: https://futurism.com/future-society/ai-data-centers-finances

Now, we're still talking about "some analyst" and the most undifferentiated pure play for the underlying economics of inference itself as a whole, but I think that the latter, at least, should remain relevant because if the underlying inference doesn't work on current subscriptions, then nothing built on top of it without significant additional charge will.

[heisgone]

There will be consolidation has few players will have the revenues to justify training their own model. Google has enough cash and revenues to be one of the survivors of this race. Openai and Claude will survive in some form or another, at least as a brand. xAi will burn through SpaceX revenues and capital so it will stay around for a while. China will keep subsidizing models. Meta might keep a subpar model around. It still a race for relevance so not everyone will make the cut.

[travisporter]

I can go on Gemini, claude, mistral, (and even chatgpt) for free (even through a VPN), so they are definitely not profitable for me as they are not getting anything from me. are you saying subscriptions are subsidizing me?

[willmarch]

They’re getting data from you which is quite valuable.

[JanSt]

Google search is also free to use

[bdangubic]

you are the product :)