> The average utilization rate of inference GPU cards is not that high (i.e. it peaks during the daytime, but is idle at night). So the time window for earning $38/h is fairly limited.

In DeepSeek's case this kind of levels out because they have a large user base both in China and the West (time zones), and additionally attract users in the non-Chinese timezones using their off peak 50% discount which is what DeepSeek talks about here.

> B. They are renting costly GPU capacity from 3rdparty hyperscalers because they can't meet the peak demand with their own hardware.

I looked this up from Chinese sources and DeepSeek primarily builds their own compute infrastructure rather than renting it

> C. Free-tier users are eating the gross margin. > D. Subscription users are eating the gross margin.

That's true, but given how lucrative inference at API rates is, they can subsidize training and individual users to some degree. Are they still losing money overall? Not unlikely, but with moonshots that is often the case. Remember that Uber and Spotify took around 15 years to have their first profitable quarters.