22 days ago
- The belief that AI inference is unprofitable due to high costs is disputed, as evidence suggests it can be profitable.
- Rough cost estimates indicate inference costs around $1 per million tokens, with GPT-5.4-mini charging $4.50, implying high profit margins.
- Open LLMs like DeepSeek report over 80% profit margins on inference, with market costs near $0.87 per million tokens, supporting profitability.
- AI labs like OpenAI and Anthropic may use high inference margins to subsidize training costs, explaining their higher prices.
- Even if major AI labs fail, inference providers without training costs can profitably serve models, showing the inference business is sustainable.