[alexdoesstuff]

Author here

I mostly agree on the first point. Even prior to the price race to the bottom, no AI Lab managed to make any money above marginal cost on inference, let alone recoup investment in infrastructure or model training. Clearly, investment in infrastructure and model training have been largely subsidized by VCs. It's a bit unclear how much of a subsidy inference costs had. The fact that AWS runs hosted inference at roughly similar cost than AI Labs suggests to me that there's at least not a massive subsidy going on at the moment.

I don't subscribe to the narrative that nation states (i.e. China) massively support DeepSeek. Thus, while their core business as a hedge fund is clearly profitable, they have considerably less deep pockets and willingness to front losses than the investors in VC supported AI Labs. Consequently, I expect their inference cost to at least cover their marginal costs (i.e. energy) and maybe some infrastructure investment.

All that suggests that they've managed to lower cost (and with that presumable resource and energy requirements) of inference considerable, which to me is a clear game changer.