Thoughts from a younger generation.. [LWN.net]

Thoughts from a younger generation..

Posted May 20, 2026 11:34 UTC (Wed) by malmedal (subscriber, #56172)
In reply to: Thoughts from a younger generation.. by farnz
Parent article: RIP Peter G. Neumann

Rumours are that Anthropic's margins on serving the LLMs are like 70% including what they lose by the free quota. I think this is plausible when you compare prices with the open weights models.

You can check openrouter.ai/models or hugginface.co/inference/ for pricing details.

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Cost of LLMs in the cloud

Posted May 20, 2026 14:18 UTC (Wed) by farnz (subscriber, #17727) [Link] (1 responses)

That sounds like a plausible gross margin - the cost of running inference for you given that you have the datacenter, the hardware and the model already is relatively low. The expensive bit is developing new models, and building new datacenters.

And that's why the LLM providers can't raise their prices that far - if they do, then instead of paying extra or doing without LLMs completely, people will move to open models. The only way to avoid that is to charge fairly, or to have a model that's sufficiently better than any open model that it's worth paying your prices.

Cost of LLMs in the cloud

Posted May 20, 2026 14:34 UTC (Wed) by malmedal (subscriber, #56172) [Link]

Yes, I agree. I am arguing against what was said earlier in the thread about the models going away permanently because they are too expensive too run.