[tty456]

How long did AMZN do it for?

[MadxX79]

Amazon lost a cumulative 2.8 billion over their first 17 quarters.

So if you're asking about time, then amazon stopped a lot faster. OpenAI is 40 quarters old.

If you are asking about money, then amazon... also stopped a lot faster. OpenAI is losing money comparable to amazon's lifetime losses every quarter.

[ses1984]

I don’t think Amazon did that…?

[swiftcoder]

Amazon was pretty famous for never actually posting a profit for their first ~10 years of operation

[lelanthran]

> Amazon was pretty famous for never actually posting a profit for their first ~10 years of operation

They were spending the profit from each user, not making a loss on each user.

It's a big difference.

To turn a profit all AMZN had to do was stop spending (and the consumers would not have been affected by the halting of spending).

For the AI providers, to turn a profit they have to raise the price.

[mnicky]

It’s the same here. Inference alone is profitable. It’s the R&D cost of making a new model that drives up expenses.

[miyoji]

This doesn't make sense. Inference alone is profitable but you have to continually train new models. There isn't a point where you will have a model that is the final model and you can just serve inference and profit, you always have to train more models.

It's not at all the same as what Amazon was doing. At any point, Amazon could have turned off the expansion engine and turned on the profits. AI companies don't have that luxury, if they stop training they'll just fall behind and die because they don't have a competitive model. They are locked into training in order to be competitive, they are not by default profitable and choosing growth over profit.

[xboxnolifes]

Because they were constantly reinvesting profits...

[LoganDark]

Amazon would absolutely take a loss on certain products in order to dominate the category, squeeze out competitors and then bring the price back up. It's one of the reasons they're so dominant in general now. Also one of the reasons why Amazon Basics has basically everything that exists and they're usually at or near the top of their respective categories -- third-party sellers simply can't compete.

[sschueller]

Amazon wasn't competing against open and free models that are starting to be good enough running on existing laptops.

OpenAI and Anthropic's moat is filling with cement faster than they can dig.

[WarmWash]

OpenAI and Anthropic aren't competing against them either.

If you could go out on the street of anytown and find one person using an open model, I'd eat my GPU.

[LoganDark]

I have 128 GB of unified memory (M4 Max) and the user experience with local inference is still pretty bad. I'm so glad something like llama.cpp exists so I don't have to wrangle Python (which I hate), but OpenCode is entirely disrespectful of the KV-cache so I had to switch to Pi (but Pi is going relatively well actually).

Even so, I can't really run at hundreds of tokens per second which is practically table stakes for my work. Even if I did manage to run that fast, the model would probably be completely braindead and stomp all over the task.

Wish I could afford an M5 Max but I've been between jobs for months without even a single interview. Sucks to be a developer these days.

[sschueller]

Try Kilocode with deepseek v4 (via API directly to deepseek, much cheaper than via kilo).

I have had very good results and compared to others it just costs pennies.

I use something similar to this https://github.com/ScotterMonk/AgentAutoFlow setup and switch between deepseek v4 to flash depending on task.

[sfifs]

Deepseek Flash v4 actually runs on 128Gb systems (about 14 tok/sec). Antirez created a fabulous 2 bit quant and a highly tuned LLM server

https://github.com/antirez/ds4

[LoganDark]

I do use DeepSeek, it's exceptionally cheap! Inference is slow though, and it's not particularly intelligent but the experience is better than local inference.

[Haven880]

To a certain extent, but not completely. OpenAI and Anthropic are taking losses on their entire offering—that is a huge difference. Amazon, for example, has pumped its profits back into R&D for decades. What AI companies are doing right now is running the Uber playbook on an epic scale. In the US, there isn't much competition, so they can maintain a duopoly. But look at what happened in China: Uber collapsed and pulled out. Now, the entire world is facing competition from DeepSeek and Qwen at a fraction of the cost. According to a reliable Shenzhen source, they will halve their prices again by the end of this year using newer Huawei GPUs. The current 7nm chips are already bleeding OpenAI dry. By the end of this year, they will upgrade to 5nm, and by June of next year, 3nm. They don't even have to be better—just 95% as good at 1/20th of the price. I don't see OpenAI and Anthropic surviving much outside of America; they are likely staring down Groupon’s fate. You can research it yourself: China has no issues with electricity because they have a massive power surplus. This is why OpenAI and Anthropic are so scared right now. They must IPO by 2027, because after that, they will suffer the exact same fate as Groupon.

[LoganDark]

I do love the DeepSeek models, they're so incredibly cheap and for functionality that nears Sonnet. Weeks of heavy usage still lands squarely under $10 for me.

Compare that with how I pay $200 a month for Claude and am still hitting the limits with any sort of sustained usage. They even have a special usage limit for Sonnet to prevent you from using too much of that either.

I'm super frustrated with how slow DeepSeek is though. And it's not nearly ready to be unsupervised for long periods of time like Claude is. Just this morning I left Fable 5 unsupervised for about eight hours straight. Single turn. DeepSeek often gets even much shorter turns wrong, so I wouldn't trust it with anywhere near that length of time alone. Not to mention it'd get so much less done because of how slow it is.

Also, did you use an LLM to correct your grammar after you posted? Lol

[skeledrew]

> I do love the DeepSeek models, they're so incredibly cheap and for functionality that nears Sonnet.

> I'm super frustrated with how slow DeepSeek is though. And it's not nearly ready to be unsupervised for long periods of time like Claude is.

Tradeoffs ;). One thing I'm doing is to make my flows properly available on my phone, so I can run and supervise things wherever I may be.

[watwut]

Whole SV is subsidizing things to kill competitiom it all the time. L

However, Amazon was not racking debt the way these companies are. Both their behavior and financials were miles apart from these ai companies.

[LoganDark]

Subsidizing is indeed different than burning cash, for sure.