This article is about the model providers' costs, not API users'. Cursor etc have to pay the marked-up inference costs, so it's not surprising they can't make a profit.
This article is about the model providers' costs, not API users'. Cursor etc have to pay the marked-up inference costs, so it's not surprising they can't make a profit.
Yes, and the comment you first replied to was about the state/viability of the industry as a whole. If users can't make money from this "transformative technology", even when the provider is in the stage of burning money for the sake of growth, that sort of tells against it turning into a trillion dollar industry or whatever the hype claims.
The point is that the providers aren't burning money by subsidising inference costs. On the contrary, if this article is to believed they're charging healthy margins on it.
So there are two answers: for the model providers, it's because they're spending it all on training the next model. For the API users, it's because they're spending it all on expensive API usage.
The point is that the margins aren't "healthy" for the industry if their users can't be profitable, because if that's the case, the users will all go out of business, and the providers will stop being able to charge anybody anything, margin or no.