> The ads aren’t going into your paid plans (except maybe a highly discounted tier, depending on the market). The ads are a play to offer a free version. Having an ad-supported free tier isn’t new.

Sounds like it is new for ChatGPT though. That's also how it started with TV and Youtube, first on the free tier then expanding to the paid ones.

> The ads aren’t going into your paid plans (except maybe a highly discounted tier, depending on the market). The ads are a play to offer a free version. Having an ad-supported free tier isn’t new.

This statement doesn't discount the original statement: that ads are going into GPT, which Sam called a last resort.

> The discussion about being unprofitable also repeats the reductionist view that these companies are losing money and therefore the business model doesn’t work. This happens with every VC cycle where writers don’t understand that funded companies are supposed to lose money while they grow. That’s what the investment money is for.

Usually propped-up companies don't last in the long term once the VC subsidy runs out. There's a difference between getting VC money in order to buy rocket parts, and getting VC money in order to charge $7 when you would really need to charge $10. The latter problem never goes away.

> We have very strong indicators that inference is not a money loser for these companies and is likely very profitable.

Why is OpenAI specifically losing money hand over fist then?

>The “but they’re losing money” argument never seems to be brought out against competitors that literally give away their models for free and for which we can calculate the cost of serving 400B-1T parameter open weight models.

To be fair people aren't exactly bullish on the prospects of deepseek or z.ai either, it's just they're below radar so they don't get mentioned.

> companies are supposed to lose money while they grow

At what point do we declare that a company has "grown" and now must make money? OpenAI is a multi-billion dollar company right now, surely that's a point at which they should be profitable, instead of propped up by further investment and borrowing.

> We have very strong indicators that inference is not a money loser for these companies

All of the economic analysis that I've read strongly states the opposite. Running a GPU is a net loss /even for the data centre operators/. For them to break even, they currently charge OpenAI/Anthropic/Etc more than OpenAI/Anthropic/Etc make per-token.

> Having an ad-supported free tier isn’t new having ads shoved in paid tiers isn't new either

> This article tries to build upon a lot of half-truths or incorrect facts, like this:

yeah i was wondering why my bullshit detector was going off. This feels as if someone who cooks for Ramsey's kitchen is trying to predict the end of the market hike.

I've heard "They're losing money" since the 1990s. About Amazon and nearly every other tech company.

The strategy is always:

* Build something useful

* Give it away for free to get people exited

* Convince investors that this is going to rule the world

* Grow to dominate the world

* Enshittify