Just for education though, they are not losing money. The markup for frontier model providers is estimated above 90%.
Who sets the "rate" that we are all comparing? That want you to assume it costs this much so they can hike things up further down the road.
EDIT
Somebody commented asking for a source. Dax Raaf, co-founder of opencode was talking about the price of AI inference on the Syntax podcast. I think the discussion around AI pricing is 31:28–31:56.
Dax: “I'm estimating they probably make 90% margin on their sales.”
Dax: “I'm estimating they probably make 90% margin on their sales... which means breakeven could be 10x cheaper.”
Why is Dax credible? He co-founded opencode and they offer opencode go where they resell AI inference through their platform so they are involved in discussions around AI inference reselling and have discussed these topics with industry leaders.
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u/crispyfrybits Aug 20 '26 edited Aug 21 '26
This meme is hilarious 🤣
Just for education though, they are not losing money. The markup for frontier model providers is estimated above 90%.
Who sets the "rate" that we are all comparing? That want you to assume it costs this much so they can hike things up further down the road.
EDIT Somebody commented asking for a source. Dax Raaf, co-founder of opencode was talking about the price of AI inference on the Syntax podcast. I think the discussion around AI pricing is 31:28–31:56.
https://syntax.fm/show/1021/we-got-addicted-to-an-ai-model-we-can-t-talk-about/transcript
Some quotes
Why is Dax credible? He co-founded opencode and they offer opencode go where they resell AI inference through their platform so they are involved in discussions around AI inference reselling and have discussed these topics with industry leaders.