I keep hearing people repeat the zombie factoid that tokens are subsidized and users aren't paying the full cost. This is mostly false — major labs have positive margins. But even where it's true, it doesn't matter very much because costs are falling rapidly.

If costs are falling 10x a year, it doesn't matter that much whether you are paying full price or half price this year — either way you are going to pay less (for a comparable performance level) next year.

@binarybits probably right but which analysis are you basing it on? actual lab margins are a little tricky bc of various compute for equity arrangements, and aside from that they'll have benefit of volume. but basing margin ests on public pricing seems like a reasonable outer bound

@binarybits Very true on the long term but the short term is very unpredictable in terms of demand growth This year so far demand certainly outpaced growth in serving capacity. So labs sometimes have to decide to lower margins for current inference (risk future scaling) or raise prices