OpenAI and Anthropic are subsidizing the subscriptions themselves, as price discrimination (enterprise customers will pay the full API price, but they also want to capture the individual subscription market). This also incentivizes people to use Codex / Claude Code rather than competitors like Cursor. Not sure about the other subsidized channels.
It’s a really substantial discount, probably over 10x if you fully use the weekly allowance of a Max 20x subscription.
I’m also guessing that like a gym membership, many of the subscriptions are under-used in practice. As someone whose work and hobbies don’t involve significant programming, I have a Claude Max subscription but I only come close to limits very rarely (the only times in recent memory was when I tried to use Fable on Max to do a sweep of questions that interested me and barely seemed on the cusp of doable with present-day AI, in the 3 days I had access to Fable[1]).
I got blocked/filtered a bunch of times on work-relevant tasks but I wanted to see if it had novel literary insights on Chiang, Kafka, etc. Burned a bunch of tokens on this.
Agree. I expect them to be more fully used in the future. As inference scaling improves, it means there will be more tasks that can be done with 100% of token limits but not 10% of token limits. Companies will probably adjust pricing strategy in response.
OpenAI and Anthropic are subsidizing the subscriptions themselves, as price discrimination (enterprise customers will pay the full API price, but they also want to capture the individual subscription market). This also incentivizes people to use Codex / Claude Code rather than competitors like Cursor. Not sure about the other subsidized channels.
It’s a really substantial discount, probably over 10x if you fully use the weekly allowance of a Max 20x subscription.
I’m also guessing that like a gym membership, many of the subscriptions are under-used in practice. As someone whose work and hobbies don’t involve significant programming, I have a Claude Max subscription but I only come close to limits very rarely (the only times in recent memory was when I tried to use Fable on Max to do a sweep of questions that interested me and barely seemed on the cusp of doable with present-day AI, in the 3 days I had access to Fable[1]).
I got blocked/filtered a bunch of times on work-relevant tasks but I wanted to see if it had novel literary insights on Chiang, Kafka, etc. Burned a bunch of tokens on this.
Agree. I expect them to be more fully used in the future. As inference scaling improves, it means there will be more tasks that can be done with 100% of token limits but not 10% of token limits. Companies will probably adjust pricing strategy in response.