you don’t understand how technology companies work. they’re not always making money
yeah but there is a difference between losing some money on R&D and simply having an unviable business model.
CEO personally chose a price too low for company to be profitable.
What a clown.
They’re still in the first stage of enshittification: gaining market share. In fact, this is probably all just a marketing scheme. “Hi! I’m Crazy Sam Altman and my prices are SO LOW that I’m LOSING MONEY!! Tell your friends and subscribe now!”
More like he misjudged subscriber numbers than price.
despite that one episode of Leverage where they did some laundering by way of gym memberships, not every shady bullshit business that burns way more than they make can just swizzle the numbers!
(also if you spend maybe half a second thinking about it you’d realize that economies of scale only apply when you can actually have economies of scale. which they can’t. which is why they’re constantly setting more money on fire the harder they try to make their bad product seem good)
please explain to us how you think having less, or more, subscribers would make this profitable
Yeah, the tweet clearly says that the subscribers they have are using it more than they expected, which is costing them more than $200 per month per subscriber just to run it.
I could see an argument for an economy of scales kind of situation where adding more users would offset the cost per user, but it seems like here that would just increase their overhead, making the problem worse.
LLM inference can be batched, reducing the cost per request. If you have too few customers, you can’t fill the optimal batch size.
That said, the optimal batch size on today’s hardware is not big (<100). I would be very very surprised if they couldn’t fill it for any few-seconds window.
this sounds like an attempt to demand others disprove the assertion that they’re losing money, in a discussion of an article about Sam saying they’re losing money
What? I’m not doubting what he said. Just surprised. Look at this. I really hope Sam IPO his company so I can short it.
oh, so you’re that kind of fygm asshole
good to know
Can someone explain why I am being downvoted and attacked in this thread? I swear I am not sealioning. Genuinely confused.
@[email protected] asked how request frequency might impact cost per request. Batch inference is a reason (ask anyone in the self-hosted LLM community). I noted that this reason only applies at very small scale, probably much smaller than what
OpenAI is operating at.@[email protected] why did you say I am demanding someone disprove the assertion? Are you misunderstanding “I would be very very surprised if they couldn’t fill [the optimal batch size] for any few-seconds window” to mean “I would be very very surprised if they are not profitable”?
The tweet I linked shows that good LLMs can be much cheaper. I am saying that
OpenAI is very inefficient and thus economically “cooked”, as the post title will have it. How does this make me FYGM? @[email protected]
i would swear that in an earlier version of this message the optimal batch size was estimated to be as large as twenty.
Wait but he controls the price, not the subscriber number?
Like even if the issue was low subscriber number (which it isn’t since they’re losing money per subscriber, more subscribers just makes you lose money faster), that’s still the same category of mistake? You control the price and supply, not the demand, you can’t set a stupid price that loses you money and then be like “ah, not my fault, demand was too low” like bozo it’s your product and you set the price. That’s econ 101, you can move the price to a place where your business is profitable, and if such a price doesn’t exist then maybe your biz is stupid?
well, yes. But also this is an extremely difficult to price product. 200$/m is already insane, but now you’re suggesting they should’ve gone even more aggressive. It could turn out almost nobody would use it. An optimal price here is a tricky guess.
Although they probably should’ve sold a “limited subscription”. That does give you max break-even amount of queries per month, or 2x of that, but not 100x, or unlimited. Otherwise exactly what happened can happen.
“Our product that costs metric kilotons of money to produce but provides little-to-no value is extremely difficult to price” oh no, damn, ye, that’s a tricky one
The real problem is believing that you can run a profitable LLM company.
What the LLMs do, at the end of the day, is statistics. If you want a more precise model, you need to make it larger. Basically, exponentially scaling marginal costs meet exponentially decaying marginal utility.
Some LLM bros must have seen this comment and become offended.
guess again
what the locals are probably taking issue with is:
If you want a more precise model, you need to make it larger.
this shit doesn’t get more precise for its advertised purpose when you scale it up. LLMs are garbage technology that plateaued a long time ago and are extremely ill-suited for anything but generating spam; any claims of increased precision (like those that openai makes every time they need more money or attention) are marketing that falls apart the moment you dig deeper — unless you’re the kind of promptfondler who needs LLMs to be good and workable just because it’s technology
and because you’re all-in on the griftWell, then let me clear it up. The statistics becomes more precise. As in, for a given prefix A, and token x, the difference between the calculated probability of x following A (P(x|A)) to the actual probability of P(x|A) becomes smaller. Obviously, if you are dealing with a novel problem, then the LLM can’t produce a meaningful answer. And if you’re working on a halfway ambitious project, then you’re virtually guaranteed to encounter a novel problem.
Obviously, if you are dealing with a novel problem, then the LLM can’t produce a meaningful answer.
it doesn’t produce any meaningful answers for non-novel problems either
look bro just 10 more
repsgpt3s bro itl’ll get you there bro I swear bro
losing money because people are using it more than expected
“I personally chose the price and thought we would make some money.”
Big MoviePass energy
Why is same personally picking subscription prices anyway? Should there be some accountant doing that math? Wtf
If it worked for Elon and his 8 per blue check, it has to work for our altman boi
Their accountant is probably three GPTs in a trench coat that’s being fed prompts by an unpaid intern or some poor dude in India.
Why is AI not making enough money? I specifically requested it.
Much like uber and netflix, all of these ai chatbots that are available for free right now will become expensive, slow, and dumb once the investor money runs out and these companies have to figure out a business model. We’re in the golden age of LLMs right now, all we can do is enjoy the free service while it lasts and try not to make it too much a part of our workflow, because inevitably it will be cut off. Unless you’re one of those people with a self-hosted LLM I guess.
$200 a month for a user is losing money? There’s no way he’s just including model queries. An entire a6000 server is around $800 / month and you can fit a hell of lot more than 4 peoples worth of queries. He has to include training and or R&D.
I’m honestly fairly surprised as well, but at the same time, they’re not serving a model that can run on an A6000, and the people paying for unlimited, would probably be the ones who setup bots and apps doing thousands of requests per hour.
And honestly? Those people are 100% right.
If they can’t deliver true “unlimited” for 200 bucks a month, they shouldn’t market it as such.grumble grumble unlimited mobile data grumble grumble
To be fair, unlimited is supposed to mean unlimited for a reasonable person. Like someone going to an “all you can eat buffet”. However those purchasing these would immediately set up proxy accounts and use them to serve all their communities, so that one unlimited account, becomes 100 or a 1000 actual users. So like someone going to an “all you can eat” and then sneaking in 5 other people under their trenchcoat.
If they actually do block this sort of account sharing, and it’s costing them money on just prolific single users, then I don’t know, their scaling is just shite. Like “unlimited” can’t ever be truly unlimited, as there should be a rate limit to prevent these sort of shenanigans. But if the account can’t make money with a reasonable rate limit (like 17280/day which would translate to 1 request per 5 sec) they are fuuuuuucked.
“I personally chose the price”
Is that how well-run companies operate? The CEO unilaterally decides the price rather than delegating that out to the numbers people they employ?
Should have asked chatgpt to play the role of a CEO.
This answer would be much funnier if that wasn’t his fucking plan.
jesus fuck how did i never see this before
far, far, far, far, far, far, far fewer business people than you’d expect/guess are data-driven decision makers
and then there’s the whole bayfucker ceo dynamic which adds a whole bunch of extra dumb shit
it’d be funnier if it weren’t for the tunguska-like effect it’s having on human society both at present and in the coming decades to follow :|
I think I remember Jeff Bezos in “The Everything Store” book seeing a price they charged for AWS and went even lower for growth. So there could be some rationale for that? However, I think switching AI providers is easier than Cloud Providers? Not sure though.
I can imagine the highest users of this being scam artists and stuff though.
I want this AI hype train to die.
A real ceo does everything. Delegation is for losers who can’t cope. Can’t move fast enough and break enough things if you’re constantly waiting for your lackeys to catch up.
If those numbers people were cleverer than the ceo, they’d be the ones in charge, and they aren’t. Checkmate. Do you even read Ayn Rand, bro?
Is that what Ayn Rand is about? All I really remember is that having a name you chose yourself is self-fulfilling.
The plagiarism power virus is too expensive to operate? I’m shocked I tell you
Now imagine if they actually paid for the training data as well.
sam altman proving once again that he is not only a tech genius but also a business genius. make sure to let him scan your eyeballs before it’s too late.
Hmm, we should get together some funds to buy a single unlimited subscription, and then let it continuously generate as large and complex prompts as the rate limitting allows.
Buy two. Ask the other to generate expensive prompts.
On one hand, heck yes. On the other, part of the reason its so expensive is because of the energy and water usage, so sticking it to the man in this way also is harmful to the environment :(
