Comment by ProblemExplorer | Hacker News Reader

Comment by ProblemExplorer | Hacker News Reader

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ProblemExplorer

depends on the person.

Known to someone who doesn't trade on a heavily AI indexed market (in 2026 all companies, even Tyson or Chevron is an AI play but not as heavily AI indexed as those say 2 degrees away from Anthropic or OpenAI) - likely not.

So if the point you're making is your typical barber doesn't know about this, I am guilty.

If you want to do your own research into this, there are a lot of private reports and publications on the topic.

If you don't want to spend any money, there is even a recent public analysis using a 92% API gross margin.

Anthropic's October 5, 2026 analysis also points to a 92% API gross margin that SemiAnalysis based their report on.

OpenAI reported paid-user compute margin reached 70% in October 2025 - a year ago.

DeepSeek has similar reports. The frontier labs are comfortably in the fat inference margin territory.

Do you have information to the contrary?

I didn't have information at all, and I wasn't trying to imply anything specific about the data. I just wasn't aware that there was public information that would point to such a specific number for their margins.

It's interesting to read this data. A lot of the "common wisdom" was that subscriptions were heavily subsidized, but in actuality they're just not quite as outrageously profitable.

> A lot of the "common wisdom" was that subscriptions were heavily subsidized, but in actuality they're just not quite as outrageously profitable.

Both can be true! Assume that it costs you $10 to support inference of 1MM tokens, and you sell that for $100. So you have a 90% profit margin.

Now you also have flat rate subscriptions for $200/month, where you sell upto 100MM tokens. That costs you $1000, but you're selling it as a loss leader because that drives up demand, bottom up - for your product, which is good for long-term profitability specially when your investors are not yet sensitive to you burning cash.

I have multiple $500/mo OAI subs. Still cheaper than buying my own hardware for equivalent performance.

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