Most unmature markets aren't subsidized to the point that LLM market is, most market have some level of baseline profitablity, this market doesn't, that's because most market subsidized the marketing or the capex but this market doesn't hold the opex, the capex not the amount of marketing let alone all of this together
Most new markets are funded by initial investment capital. Early entrants operate at a loss as they grow.
This isn’t as unusual as some people are trying to make it sound. This has been happening since the dawn of finance.
I thought this would be less foreign to everyone since we just went through this whole conversation for a decade with Uber and Lyft. Their demise was predicted from the start from everyone who thought that it was going to collapse as soon as they couldn’t subsidize your rides with promos. There was much wailing and gnashing of teeth as their prices changed to feel out the market. Then they found profitability and the critics went silent.
Arguably we'd be much better off if none of those would be subsidized by investments, at least not to the "run unprofitable for decade+" level.
Because that just absolutely murders any competition that manages to not get that level of free money. You're not pouring money in to make it happen at all at that point, you are pouring money in so nobody else can get the part of the pie.
Which is great for investors, bad for everyone else
What would be the alternative? You’ve got the government funds absolutely everybody on one end of the scale. Where do we find a reasonable alternative?
From what I understand, they make money per-token billing. Not enough for how much it costs to train, not accounting for marketing, subscription services, and research for new models, but if they are used, they lose less money.
Finance 101 tldr explanation:
The contribution margin (= price per token -variable cost per token ) this is positive
Profit (= contribution margin x cuantity- fix cost)
if 100% of the money they spend is in inference priced by tokens (they don't say about subscriptions so i asume they lost money), yes they make money, but their expenses are way higher than inference alone.
so they can make the gpu cost if they sell tokens but in reality this isnt the case, becouse they have to constaly train new models, subscription marketing, R&D, And overhead.
antropic in general lost way less money than their competitors
i will take this number in particular the projected break even but googling say
Gross margin in this case is how much money they do whit the GPU
"
Gross Margins: Projected to swing from negative 94% last year to as much as 50% this year, and 77% by 2028.
Projected Break-even: The company expects to be cash flow positive by 2027 or 2028. "
i will not be as bullish to say they will no colapse (0 idear how much real debt and commitments they have, if after the bubble pop spending fall shraply, or a new deepseek moment) but this sound like good trajectory (all things considered) i heavily doubt the 380 billions in valuation
"this is how much is spendeed in developers
between $659 billion and $737 billion. The United States is the largest driver of this spending, accounting for more than half of the global total ($368.5 billion in 2024)"
so is like saying that a 2% of all salaries of developers in the world will be absorbed as profit whit the current 33.3 ratio, quite high giving the amount of risk of the company.
I disagree, I know the opinion of WSJ, WP, FT or national like france24,DW, BBC, RT,AJ
Or at least know is always opinion Base, the facts are selected in a subjecive way.
Is way harder to know how opinionated Wikipedia is, and everything make them sound like their opinion is only base on facts but isn't.
I believe regular people will not change from chatGPT if it has some ads. I know people who use "alternative" wrappers that have ads because they aren't tech savvy, and I agree with the OP that this could be a significant amount of money
We aren't 700 million people that use it.
Definitely don’t argue against that, once people get into a habit of using something, it takes quite a bit to get away from it. Just that an American startup can literally run ZLM models themselves (open weight with permissive license) as a competitor to ChatGPT is pretty wild to think about
One of the side effects of having a chat interface, is that there is no moat around it. Using it is natural.
Changing from Windows to Mac or iOS to Android requires changing the User Interface. All of these chat applications have essentially the same interface. Changing between ChatGPT and Claude is essentially like buying a different flavor of potato chip. There is some brand loyalty and user preference, but there is very little friction.
I remember asking for quotes about the Spanish conquest of South America because I couldn't remember who said a specific thing. The GPT model started hallucinating quotes on the topic, while DeepSeek responded with, "I don't know a quote about that specific topic, but you might mean this other thing." or something like that then cited a real quote in the same topic, after acknowledging that it wasn't able to find the one I had read in an old book.
i don't use it for coding, but for things that are more unique i feel is more precise.
I wonder if Conway's law is at all responsible for that, in the similarity it is based on; regional trained data which has concept biases which it sends back in response.
It's not just porn, it's depictions of rape, from what I’ve read. So I don’t know if it’s really good for people to consume that kind of content. Real-life safe sex involves consent, which is obviously not the objective of this game. I believe this type of material can be genuinely harmful to our brains.
Even though I’m against using payment processing restrictions, I do believe we need laws to prohibit this kind of content. There’s data suggesting that it impacts real people's behavior during sex and shapes harmful social expectations.
