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0 pointsazinman21y ago0 comments

Given their scale and direct investments from Microsoft, what makes you think this is any cheaper? They’ll be getting stuff at or near cost from azure, and Azure already exists and with huge scale to amortize all of the investments across more than just OpenAI, including volume discounts (and preference) from nvidia.

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hintymad1y ago

I assumed that Microsoft gave them discount and credits as investment, but the cost by itself is like any other big customer can get.

azinman2OP1y ago

Of course the cost isn’t near zero, but is the pricing “at Microsoft’s cost”? If it is, then them building a datacenter wouldn’t save anything, plus would have enormous expenses related to, well, building, maintaining, and continuously upgrading data centers.

hintymad1y ago

Good point. I updated the assumption accordingly. I assume the cost of using Azure cloud after discount but before the credit will be on par with Azure's big customers. And given the scale of OAI, I suspect that the only way to be profitable is to have their own infra.

lesuorac1y ago

Wouldn't it be foolish for microsoft to give them a discount?

Like you could discount say a 10B investment down to 6B or w/e the actual costs are but now your share of OpenAI is based on 6B. Seems better to me to give OpenAI a "10B" investment that internally only costs 6B so your share of OpenAI is based on 10B.

Plus OpenAI probably likes the 10B investment more as it raises their market cap.

adastra221y ago

The cost of vertically integrated inference isn’t zero either.

j / k navigate · click thread line to collapse

0 pointsazinman21y ago0 comments

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hintymad1y ago

I assumed that Microsoft gave them discount and credits as investment, but the cost by itself is like any other big customer can get.

azinman2OP1y ago

hintymad1y ago

lesuorac1y ago

Wouldn't it be foolish for microsoft to give them a discount?

Plus OpenAI probably likes the 10B investment more as it raises their market cap.

adastra221y ago

The cost of vertically integrated inference isn’t zero either.

j / k navigate · click thread line to collapse