> but as far as I can see all the AI companies are not making money on inference alone.

This was the missed point on why GPT5 was such an important launch (quality of models and vibes aside). It brought the model sizes (and hence inference cost) to more sustainable numbers. Compared to previous SotA (GPT4 at launch, or o1/3 series), GPT5 is 8x-12x cheaper! I feel that a lot of people never re-calibrated their views on inference.

And there's also another place where you can verify your take on inference - the 3rd party providers that offer "open" models. They have 0 incentive to subsidise prices, because people that use them often don't even know who serves them, so there's 0 brand recognition (say when using models via openrouter).

These 3rd party providers have all converged towards a price-point per billion param models. And you can check those prices, and have an idea on what would be proffitable and at what sizes. Models like dsv3.2 are really really cheap to serve, for what they provide (at least gpt5-mini equivalent I'd say).

So yes, labs could totally become profitable with inference alone. But they don't want that, because there's an argument to be made that the best will "keep it all". I hope, for our sake as consumers that it isn't the case. And so far this year it seems that it's not the case. We've had all 4 big labs one-up eachother several times, and they're keeping eachother honest. And that's good for us. We get frontier level offerings at 10-25$/MTok (Opus, gpt5.2, gemini3pro, grok4), and we get highly capable yet extremely cheap models at 1.5-3$/MTok (gemini3-flash, gpt-minis, grok-fast, etc)