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Industry equilibrium balances training and inference
  • Frontier labs spend ~50% on research (training next model)
  • ~50% on serving current models
  • Gross margins >50% on inference make this profitable
  • Risk comes from demand prediction errors when buying future compute
Dario AmodeiDwarkesh Patel01:00:02

Supporting quotes

Let's say half of your compute is for training and half of your compute is for inference. The inference has some gross margin that's more than 50%. Dario Amodei
The only thing that makes that not the case is if you get less demand than $50 billion. Then you have more than 50% of your data center for research and you're not profitable. Dario Amodei

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