Disclaimer 1: Our calculations are rough in places; information is sparse, guesstimates abound.

Disclaimer 2: This post draws from public info on FutureSearch as well as a paywalled report. If you want the paywalled numbers, email [email protected] with your LW account name and we’ll send you the report for free.

Here's our view of the unit economics of OpenAI's API. Note: this considers GPT-4-class models only, not audio or image APIs, and only direct API traffic, not usage in ChatGPT products.

• As of June 2024, OpenAI's API was very likely profitable, with surprisingly high margins. Our median estimate for gross margin (not including model training costs or employee salaries) was 75%.
• Once all traffic switches over to the new August GPT-4o model and pricing, OpenAI plausibly still will have a healthy profit margin. Our median estimate for the profit margin is 55%.
• The Information implied that OpenAI rents [...]

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