Despite their research pedigrees and frontier AI ambitions, both companies’ business models reveal uncomfortable truths about operating AI startups in China.
The -0.4% gross margin on Zhipu's cloud API segment says everything. They're losing money on every API call. When they hiked prices to $56, the backlash was instant but honestly they were just doing survival maths. Same with MiniMax bleeding $512 million in nine months. These aren't sustainable businesses at current pricing. They're market capture plays. Covered why the cheap providers should worry you more than the expensive ones: https://sulat.com/p/the-real-cost-of-cheap-ai-inference
The -0.4% gross margin on Zhipu's cloud API segment says everything. They're losing money on every API call. When they hiked prices to $56, the backlash was instant but honestly they were just doing survival maths. Same with MiniMax bleeding $512 million in nine months. These aren't sustainable businesses at current pricing. They're market capture plays. Covered why the cheap providers should worry you more than the expensive ones: https://sulat.com/p/the-real-cost-of-cheap-ai-inference