Alternatively, one can say that the enterprise customers plus a metric shitload of VC and shareholder/investor money heavily subsidizes cheap personal plans.
It's the same playbook that Adobe used, provide cheap plans for academia and turn a blind eye towards piracy from non-commercial actors, get the young people hooked hard on Adobe's software and workflows, and they will demand that their employers purchase the nice, high profit commercial/enterprise plans.
[–] ywvcbk 4 days ago
[–] SR2Z 3 days ago
I think that it's not only possible but likely that the frontier labs are profitable on an ongoing basis, and it's mainly the research and capex which make them look like impending disasters.
Realistically, OpenAI and Anthropic are each probably worth ~$1T each. Anthropic can already easily justify that based on revenue alone. OpenAI isn't far off. Consider how quickly these companies are growing and the fact that they maintain a small but significant edge, I don't think the bubble is going to pop. Just deflate a little.
[–] mschuster91 3 days ago
And that is the much more relevant problem. Capable open-weight models from China, European labs or competitors with cash to burn (i.e. Meta!) erode all the moat that the major labs have, and tooling functionality like MCP, CLI interfaces or integration into third-party tools like IDEs quickly gets cloned.
Simply printing money by running inference does not justify valuations in the billions of dollars, because anyone can do so.
They are of course are the ones paying for R&D of new models but its not exactly clear if gross margins on subscriptions are negative. It might be just normal market segmentation just like SaaS companies charging enterprise users many times more than private individuals.