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Comment by ursuscamp | Hacker News Reader

I don't necessarily buy that API prices represent "real" prices of the models.

Well of course they're higher than marginal cost. But these providers have to also generate a fat return on investment.

I moved one of our daily workflows over to Kimi K3 on Fireworks. It replaces two sales assistant positions, and was about $50/day for 14 million tokens total (in/out). They surely are not subsidizing this price as it is just inference only and other providers are even less money.

It's probably a safe assumption that openrouter prices for Kimi K3 are "real".

Not in the slightest as there are providers selling K3 for half of what OR has them listed for. (And maintaining profitability)

If they're hosted in China next to a coal power plant and maintained by people getting paid 1/10th of a US engineer sure.

I doubt opanai and anthropic will go that road

What do you think the real price is? Subscriptions are heavily subsidised, I don't know anyone who would deny that.

The general model for subscriptions is that power users are subsidized by subscriptions of casual users, like a gym membership or whatever.

This is a little dicier in post-agent AI, because it's easier for casual users to automate power-user consumption, but the providers have done decently in discouraging that.

There's people here saying they're obviously subsidized, there's people here saying they're obviously profitable. I think they're probably subsidized, but I would hold back on saying it's obvious.

Yes, they are ludicrously profitable - even when future training costs are taken into account!

[citation needed]

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