Is it possible that this is an AI bubble subsidy where we are actually getting it below cost?
Of course for conventional compute cloud markup is ludicrous, so maybe this is just cloud economy of scale with a much smaller markup.
1. Economies of scale. Cloud providers are using clusters in the tens of thousands of GPUs. I think they are able to run inference much more efficiently than you would be able to in a single cluster just built for your needs.
2. As you mentioned, they are selling at a loss. OpenAI is hugely unprofitable, and they reportedly lose money on every query.
He uses old, much less efficient GPUs.
He also did not select his living location based on the electricity prices, unlikely the cloud providers.
Of course that doesn't map well to an individual chatting with a chat bot. It does map well to something like "hey, laptop, summarize these 10,000 documents."