Don’t confuse what I say. Bottom line these companies are not profitable yet but it is profitable to serve a token via the API. They have increasing demand, not enough supply, models are getting better on quick timelines. For sure there may be some losers but it’s not hard to see that that token serving can be a profitable activity.

Yep, especially if we look at what happened just last week, both Google and Anthropic have dropped how much you get out of your existing plans.

There are private companies which rent/buy GPUs, run open-weight LLMs on them and sell the tokens. They absolutely make profit, and their clients think they get a good deal and are buying the tokens.

I think they’re losing money because they have to amortize the costs of training the models in the first place, which is where most of the resource sink is.

This is why they were freaking out about DeepSeek just taking the trained model weights and slapping an interface on it.