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Right now many services are subsidized and the companies behind them are buying up compute + memory + storage en masse, resulting in the hardware being more expensive. As subsidies decrease and prices go up, i expect demand for services and HW costs will come down. Could change the economics.

I think it's important note: to many _services_ are subsidized (VC gotta VC) but absolutely nobody is selling tokens at a loss at this point. The money is accruing, it's the middlemen layer that's gonna get got.

I may be uninformed, but my impression is that nobody is doing the combination of [training, inference as a service] profitably yet. AFAIK profits come from either: - running a model someone else trained - some other business that funds the AI work Am I mistaken? OAI/Ant profitable now?

No, I think that's still true, but lots of people are selling inference while not doing training, and that shouldn't be forgotten. And OAI/Anthropic's training budgets, tbh, don't really interest me now either -- we are at the stage where model dev could 100% stop and we would be Just Fine, so, eh.