apparently AI companies are heavily subsidizing their subscription plans
I keep seeing this claim, but usually w/o any additional discussion of the possibility that the subscription pricing is not in fact a subsidy, and rather the API pricing is just hugely profitable.
Have you seen any analysis that actually tries to check whether they are in fact losing money on the subscription pricing, rather than it just having relatively low (but still positive) margins compared to API pricing?
Have you seen these? While not directly talking about subscriptions vs API pricing, they suggest that overall gross economics look thin to negative which suggests the much (1-2 OoM) cheaper subscriptions are likely loss-making (if heavily used). The OAI article talks specifically about inference costs and argues inference spend alone appears to be greater than the revenues it compares against.
My company has our developers on max x20 plans. We were told that once our current contract was up everyone had to switch to pay-as-you-go api pricing. We prodded our rep and the response was basically that the max plans aren’t profitable so they’re getting rid of them.
From his tone it didn’t sound like he was just talking about enterprises. We’ve all known that Anthropic has been burning money, and wondering how long they can keep it up. My friends, I’m afraid the end may be nigh.
I keep seeing this claim, but usually w/o any additional discussion of the possibility that the subscription pricing is not in fact a subsidy, and rather the API pricing is just hugely profitable.
Have you seen any analysis that actually tries to check whether they are in fact losing money on the subscription pricing, rather than it just having relatively low (but still positive) margins compared to API pricing?
Have you seen these? While not directly talking about subscriptions vs API pricing, they suggest that overall gross economics look thin to negative which suggests the much (1-2 OoM) cheaper subscriptions are likely loss-making (if heavily used). The OAI article talks specifically about inference costs and argues inference spend alone appears to be greater than the revenues it compares against.
https://www.wheresyoured.at/oai_docs/
https://www.wheresyoured.at/costs/
Perplexity’s (w/ GPT-5.2 Thinking) conclusions about how credible these articles are:
A 236 karma r/ClaudeCode post today: