POPA ReconAI Labs Can’t Make Money with APIs source
AI Labs Can’t Make Money with APIs source 1. API is a railroad fare - Foundation model’s API revenue is similar to rail fares - Users get a lot of value, but providers only get a small portion of the total surplus. - API prices continue to converge to marginal cost due to open source, distillation, and competition. 2. The real money is in real estate around the station. - Hong Kong MTR makes money not from rail fares but from real estate development around stations. - AI labs should also own assets that increase the value of models, not just model usage fees. - In other words, the key is whe…
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