> they (and MS) are recouping inference costs from user subscription and API revenue with a healthy operating margin.
I didn't find any reliable sources about OpenAI. All sources that I could find state this is not true -- inference costs are far higher than subscription fees.
I hate to ask this on HN... but, can you provide a source? Or tell us how do you know?
It is just an educated guess factoring costs of running similar/comparable models to 4o or 4o-mini per token, and how azure commitments work with OpenAI models[2], also knowing that Plus subscriptions are probably more profitable[1] than API calls.
It would be hard for even OpenAI to know with any certainty because they are not paying for Azure credits like a normal company. The costs are deeply intertwined with Azure and would be hard to split given the nature of the MS relationship[3]
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[1] This is from experience of running LibreChat using 4o versus ChatGPT Plus for ~200 users, subscriptions should quite profitable than raw API by a order of 3 to 4x, of course different types of users and adoption levels will be there my sample while not small is not likely representative of their typical user base.
[2] MS has less incentive to subsidize than say OpenAI themselves
[3] Azure is quite profitable in the aggregate, while possibly subsidizing OpenAI APIs, any such subsidy has not shown up meaningfully in Microsoft financial reports.
> Insane thing: we are currently losing money on OpenAI pro subscriptions! people use it much more than we expected.