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Comment by reacharavindh | Hacker News Reader

I was thinking the economics of it the same way.. if the AI companies are burning debt and VC money to give me cheaper tokens why not take them for it? I can always rent a GPU server for those personal, private AI needs.. heck even run a decision model to route them to the rented GPU servers either on demand or scheduled for few hours in a day…

It doesn’t have to be black or white…

For my toy projects, adventures, learning exercises, and throwaway MVPs I will prefer the subscription plans… they are cheap for what they offer today.

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From this article alone it should be obvious that the long-repeated myth about frontier inference being subsidized is just that: a myth.

It's training and tuning new models that cost them money. And that's why they are trying to scare people into thinking AI will kill us all in the next 5 years; they want bans on the open-weight models because they know they won't be able to compete with them.

A few days ago we got the news that DeepSeek makes 38 dollars profit per card with their off peak pricing (in the inference server release discussion).

If that is true, either the American labs are not optimizing correctly or they make a ton of money with inference.

DeepSeek designs models that require less hardware resources for inference.

There are lots of reasons Chinese AI companies will always be cheaper than Western AI companies, but chief among them is that China is pouring ludicrous amounts of money into new energy generation projects.

Hydro, wind, solar, nuclear, coal, they are building it all, as we speak, at least 10x more than the US. They are aiming to not just be energy independent, but energy dominant.

You can't now (and certainly won't in the future) be able to run an AI provider in the West as profitably as you can in China.

Yeah, the way I see it short term is take the free/subsidized tokens while we can and the further out we go the cheaper compute will get for local setups.

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