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0 pointswqaatwt23h ago0 comments

This article seems to be struggling with telling apart the difference between R&D and operating expenses? The fact that AI companies are extremely unprofitable doesn’t mean they are subsidizing token costs, they still can have very decent gross margins on them

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3 comments · 1 top-level

Gigachad17h ago· 2 in thread

The accounting is all out of whack with these companies. If a GPU had a useful lifespan of around 3 years than it’s more a constant expense than R&D. They want you to believe they can cut the R&D at any time and be profitable but it’s likely they would completely collapse without that spend.

zhivota15h ago

I don't see why 3 years is the right number there. I'm using a 10 year old model GPU to generate tokens locally, and given the bottlenecks, a commercial model focused on RAM and transfer speeds should have a longer depreciation curve than 3 years.

Gigachad15h ago

Because these GPUs in data centers chew power and take up space. If in 3 years there is a new model that processes far more tokens with the same power and time the economics quickly say the hardware is cheaper to replace than to continue running.

As a hobbiest at home the numbers are different and you can afford to do something inefficient.

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