[gpm]

The cost at such they could rent out the TPUs, i.e. the market rate, is the inference cost.

Just because you are vertically integrated doesn't mean you get to discount the one business units products to the other. Doing so discounts the opportunity cost you pay and is just bad accounting.

[KoolKat23]

Basic business principle, you charge what people are willing to pay not what it costs.

[HDThoreaun]

Depends on if you have spare capacity I think. They have minimal competition so they might be maximizing profit by charging prices higher than what clears all their supply.

[sumedh]

> doesn't mean you get to discount the one business units products to the other

That depends, if all developers get used to Claude and Codex it will become harder for Google to attract them in the future.

They might lose devs in the long term.

[gpm]

Predatory pricing is a great business strategy and all (particularly when countering the competitors predatory pricing - what could go wrong), but that doesn't mean that the gemini-team should account for it as if they're getting the compute cheaper, it just means that they should run a loss.

[flaburgan]

That's actually where AI differs: there is no network effect. So no reason for me to stay with a tool if suddenly another one is better or cheaper. Changing the model I use is literally two clicks in Zed. No retention possible for providers.

[dash2]

Look up “double marginalisation”.