Ask HN: Does OpenAI make a profit on GPT-3.5-turbo API? Like many, I'm using the OpenAI API in my product and I've noticed that gpt-3.5-turbo offers very good value for money relative to the other models. My main concern is that OpenAI might be running this at a loss, making a price increase likely. Does anyone here have any educated guesses about their likely unit economics? |
Their goal is explicitly to only reduce the prices of all of their models over time. If the increase the prices of any of their models, something would've gone very wrong or they would've made a major strategy change. I've read pretty much everything OpenAI's published and talked about, and they've been consistent in mentioning they want to continually reduce the price of models.
"You gotta assume we're going to keep making the models better and faster and cheaper." (My memory of an old interview)
There was also this from a recently deleted blog post:
"Cheaper and faster GPT-4 — This is their top priority. In general, OpenAI’s aim is to drive “the cost of intelligence” down as far as possible and so they will work hard to continue to reduce the cost of the APIs over time." (Now deleted blog post from earlier this week)
I think this makes sense, you keep competitors at bay by offering a good-enough, dirt-cheap API and then ask the big bucks for the private setup. This mirrors Stability AI's strategy, which is basically that but with open source models.
[0] https://open.spotify.com/episode/2v8Sa1RNnfZa6l7JIYmIL2?si=o...