They haven't revealed what they are changing in the price, but it's probably cache hit prices. They subsidized theirs to 10x less than normal to drive adoption. That's almost certainly below the cost of electricity for them.
Chinese model providers are in a bind because charging a reasonable margin will put them in competition with all the neoclouds that host their model weights without the development cost. Their economics are far more challenging than OpenAI/Anthropic/Google, who already have thriving high revenue business and mountains of compute online or coming online.
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They haven't revealed what they are changing in the price, but it's probably cache hit prices. They subsidized theirs to 10x less than normal to drive adoption. That's almost certainly below the cost of electricity for them.
Chinese model providers are in a bind because charging a reasonable margin will put them in competition with all the neoclouds that host their model weights without the development cost. Their economics are far more challenging than OpenAI/Anthropic/Google, who already have thriving high revenue business and mountains of compute online or coming online.
Interesting insights. I will consider these factors. AFAIK, the electricity price is lower in China than in US.