Patel argues AI software will have lower R&D costs but much higher cost of goods sold from operating services.
“Like the R and D cost is much lower in terms of people, but the cost of goods sold in terms of actually operating the service, I think will be much higher.”
Inference operations generate five times their cost in revenue which can fund additional training.
“Hey, if I spend 10 bucks on inference capacity, I actually generate 50 bucks of revenue, and then I can turn around and incrementally spend all of that profit on training.”