They are (maybe, allegedly) “profitable on inference” i.e. the API pricing is higher than the actual compute they use just for the input/output tokens for the query. That excludes, though, training, capex, staff, etc., which… is by far the vast majority of their actual expenses.
At least according to Ed Zitron, they only appeared profitable due to creative bookkeeping. They timed the announcement of their shitty “annualized revenue” to coincide with the few months of vastly reduced rent at the datacenter Musk rented to them as well as the shift to token based billing for enterprise customers. Their inference is likely not profitable.
Yeah, hence I couched it in allegedly. Ultimately we don’t really know. But even if it were true, it wouldn’t really mean anything for their profitability as a company. They have to keep improving the models if they hope to keep what customers they have.
They are (maybe, allegedly) “profitable on inference” i.e. the API pricing is higher than the actual compute they use just for the input/output tokens for the query. That excludes, though, training, capex, staff, etc., which… is by far the vast majority of their actual expenses.
At least according to Ed Zitron, they only appeared profitable due to creative bookkeeping. They timed the announcement of their shitty “annualized revenue” to coincide with the few months of vastly reduced rent at the datacenter Musk rented to them as well as the shift to token based billing for enterprise customers. Their inference is likely not profitable.
Yeah, hence I couched it in allegedly. Ultimately we don’t really know. But even if it were true, it wouldn’t really mean anything for their profitability as a company. They have to keep improving the models if they hope to keep what customers they have.