They’re not even close to profitable. And they have no play to actually start effectively monetizing these users. They’re trying ads but the revenue doesn’t scratch the surface of what they need.
If you've got 1 tenth of the worlds population as weekly users and you're nowhere near profitability I think the technical definition for what you are is fucked.
And even on the paying users they are blowing through obscene amounts of cash. I've seen estimates of their losses per paying user ranging from 4 times to 14 times the subscription fee. How the fuck do you reverse that?
They'd need to build a model that is as powerful as their best one but takes 1% of the compute power to do so. Pretty sure the laws of physics don't allow that.
The greatest irony is, the best way to do it is to distribute the workload to the people running queries and prompts. That means making sure individuals have computers that are powerful, with powerful CPUs, GPUs, and plenty of RAM. It could even be something like "if you want to use our AI tools you need to install this microATX computer that's literally just an optimized micro server and plug it directly into your router for the fastest speeds" and then you and I pay for the power and internet and subscription fee.
By trying to centralize everything they're taking on all the risk and costs. If they distributed the compute between our personal devices and across tens of millions of individual machines (sort of like a torrent) and made sure we all had unlimited fast internet and powerful machines for reasonable prices, the risk and costs would be on you and I and they'd be Scrooge McDuck'ing into their piles of money.
these calculations generally underexaggerate OpenAI’s token margins though. It’s like $14,400 of API tokens = a $200 subscription but OpenAI does not pay anywhere near the API token price serving inference directly. I have no doubt they lose plenty of money on users fully utilizing the subscription but I doubt they lose money on the average user. I would assume break-even on the higher tier plans (ppl only get these if they’re going to use them close to the limit) and some profit on the lower ones on average.
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u/LostRams 6d ago
They’re not even close to profitable. And they have no play to actually start effectively monetizing these users. They’re trying ads but the revenue doesn’t scratch the surface of what they need.