Why are so many people so sure that the big AI providers are losing money on inference? It reminds me of the comments about how Uber can never make money. Their unit economics were fine and they were only losing money because they chose to do so on customer acquisition.
In this case, I don't think it's even obvious that inference should be money losing today. API cost for frontier models has gone way up and the people claiming some cost for inference are relying on made up assumptions.
If you read widely cited folks saying AI economics are bad today (e.g., Ed Zitron from the quote), they're not credible. Sure, Ed writes rants, swears a lot, and throws the word "scam" around, all of which gets a lot of clicks, but the reasoning seems wrong.
If I were going to be skeptical about the economics of AI, it would be some kind of reasoning about how cheap models keep improving, so the frontier labs need to stay ahead (I don't follow it closely enough to know if that's plausible).
