If you're only selling models, for the next little while, it's gonna be a really tricky game. Pricing pressures make it unsustainable for many AI providers.
It's gonna be like a zero margin business because there's so much price dumping. People are giving away the model for free, affecting profit margins significantly.
The most reliable strategy for improving AI models today is adding more compute, which means cutting big checks to Nvidia for the hardware needed to make AI models a hair smarter.
That's why there is a lot of excitement at the application layer...Cohere's AI models will be an attractive business in the long term, but products could be a meaningful way to generate revenue until then.
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