AI inference is obviously profitable
a day ago
- #LLM economics
- #profitability
- #AI inference
- AI inference is profitable despite claims of unprofitability.
- Estimates show AI inference costs around $1 per million tokens, while API prices are much higher, leading to high gross margins.
- Open LLMs like DeepSeek demonstrate profitable inference with lower pricing, confirming cost-effectiveness.
- AI labs like OpenAI and Anthropic use high inference margins to subsidize expensive training costs.
- Even if AI labs fail, inference providers can profit from selling model access, ensuring the inference business survives.