NNs don't benefit from economies of scale. Or rather specifically about how a majority of low utilization users can subsidize high utilization users. In NN world every new free tier user adds the same additional performance demand as the previous free users, every free user query needs to utilize a lot of compute.
So for example, there is a ratio of 10% paid users and 90% free users (just random numbers, not real). If they want more revenue they want to add more paid users, for example double them. But this means that free users needs to double too. And every real free user requires a lot of compute for his queries. Nothing to be cached, because all are different. No way to meaningfully offer "limited" features because the main feature is the LLM, maybe it is previous gen and a little bit cheaper to run, but not much. They can't offer too old software, because competitors will offer better quality and win.
So there is no realistic way to bring costs down. Analysts forecast they actually need to increase prices a lot to meet OAI targets, or it needs to have a financial intravenous line constantly, like the 500B$ announced by Trump.
So for example, there is a ratio of 10% paid users and 90% free users (just random numbers, not real). If they want more revenue they want to add more paid users, for example double them. But this means that free users needs to double too. And every real free user requires a lot of compute for his queries. Nothing to be cached, because all are different. No way to meaningfully offer "limited" features because the main feature is the LLM, maybe it is previous gen and a little bit cheaper to run, but not much. They can't offer too old software, because competitors will offer better quality and win.
So there is no realistic way to bring costs down. Analysts forecast they actually need to increase prices a lot to meet OAI targets, or it needs to have a financial intravenous line constantly, like the 500B$ announced by Trump.