You did not parse that article properly. It regurgitates only what everyone else keeps saying: when you conflate R&D costs with operating costs, then you can say these companies are 'unprofitable'. I'd propose with a proper GAAP accounting they are profitable right now; by proper I mean that you amortize out the costs of R&D against the useful life of the models as best you can.
I am not aware of any frontier inference disclosures that put margins at less than 60%. Inference is profitable across the industry, full stop.
Historically R&D has been profitable for the frontier labs -- this is obscured because the emphasis on scaling the last five years has meant they just keep 10xing their R&D compute budget. But for each cycle of R&D, the results have returned more in inference margin than they cost in training compute. This is one major reason we keep seeing more spend on R&D - so far it has paid, in the form of helping a number of companies hit > $1bn in annual revenue faster than almost any companies in history have done so.
All that said, be cautious shorting these stocks when they go public.
I am not aware of any frontier inference disclosures that put margins at less than 60%. Inference is profitable across the industry, full stop.
Historically R&D has been profitable for the frontier labs -- this is obscured because the emphasis on scaling the last five years has meant they just keep 10xing their R&D compute budget. But for each cycle of R&D, the results have returned more in inference margin than they cost in training compute. This is one major reason we keep seeing more spend on R&D - so far it has paid, in the form of helping a number of companies hit > $1bn in annual revenue faster than almost any companies in history have done so.
All that said, be cautious shorting these stocks when they go public.