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by deaux 55 days ago
OpenRouter doesn't even have hardware. What are they possibly subsidizing? The platform costs?

OpenRouter is guaranteed to be about the highest margin operator in the business right now. Everyone wishes they'd be them, skimming 5% off as the middleman without any OpEx.
2 comments
ValentineC 55 days ago
> OpenRouter is guaranteed to be about the highest margin operator in the business right now. Everyone wishes they'd be them, skimming 5% off as the middleman without any OpEx.

The 5% fee probably has to factor in Stripe's fees, which would be around 3% to 4% depending on whether it's an international card.

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recitedropper 55 days ago
Streaming, caching, and tool calling can get pretty expensive with scale, even when you don't touch inference. Maybe they're doing something clever and are quite profitable.. or maybe they've already taken $40mm from VCs and are currently trying to raise $120mm at a 1.3B evaluation.

They also show headline prices for the cheapest provider of whatever model, but then need to hit different backends some of which may be more expensive. For now they absorb those costs, but the VCs always come knocking.

Just my opinion though. Totally agreed that they have one of the best positions amongst all AI providers from a financial standpoint.

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vanviegen 55 days ago
> They also show headline prices for the cheapest provider of whatever model, but then need to hit different backends some of which may be more expensive. For now they absorb those costs, [..]

They do?? I was under the impression I was just playing the price for whatever provider they deemed 'best' for each completion.

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recitedropper 55 days ago
That is what I had heard.

Checking now: The way they describe it in their FAQ is that if the price changes, then they will bill you the new price. But I read that as regarding if the primary model provider changes their headline token cost; not in the case of pricing differences for models that have many different backends that host them.

Regardless, I would be more concerned about the streaming costs if the service continues to blow up and they scale aggressively through VC investments. If their 5.5% skim accounted for what they needed, you'd think they could effectively grow organically..

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