Comment by jacquesm
21 hours ago
No, the problem is that the discounted rate exists in the first place. Essentially these are unfair business practices, product cross subsidization to ensure market dominance. See also: Microsoft and a whole bunch of other companies.
And once they've got their monopoly position there is inevitably the rug-pull. I wonder if some CPO somewhere actually had the guts to put a 'rug pull' item on the product roadmap.
It's not unfair its how every business works. When your product is new or not yet good enough and you want people to try it you give them discounts, or if you want to drive traffic to your service you also do the same.
Even traditional businesses do this with coupons. Is it unfair that Costco sells chickens for under cost because it drives usage to them?
Companies like Uber did use massive funding and price subsidization to try and kill competition and then take a monopoly, but it is hard to assert that this is what google is doing now. And given that other competitors in the space, Anthropic are doing the exact same thing again its not as though they are alone.
Also they could be subsidizing it because they want that usage type as it helps them train models better.
Chatgpt and gpt4 were all ran at a loss and subsidized people just didn't know that. Almost all of the llm companies have been selling 1 dollar of llm compute for 50 cents as they valued the usage, training data, and users more than making profit now.
This next generation of MOE and other newly trained models. Like opus 4.6, Cursor Composer 1.5, gpt 5.3 codex, and many of the others have been the first models where these companies are actually profitably serving the tokens at the api cost.
This year has been the switch where ai companies are actually thinking of becoming profitable instead of just focusing on research and development.
I'd agree with you if this was some new SaaS just opening its doors.
But Google are banning entire accounts, with years, even decades, of personal history, photos, even phone accounts and app development projects.
They very easily could just negate the anti-gravity access, which would be much, much more reasonable.
>But Google are banning entire accounts, with years, even decades, of personal history, photos, even phone accounts and app development projects.
Source? It seems to me only the anti-gravity access was blocked. The link says
> Our product engineering team has confirmed that your account was suspended from using our Antigravity service.
> there’s no way we can restore our accounts to use Antigravity anymore yeah?
Disclosure: I work at Google, but not on anything related to this.
5 replies →
> It's not unfair its how every business works.
Not. On both counts.
> Essentially these are unfair business practices, product cross subsidization to ensure market dominance.
Offering a different discounted rate for a service, though their first-party platform is not an unfair business practice whatsoever, though. The bar isn't what you disagree with, or what you think their motives are without any substantial proof. They could even make a honest argument that they can aggressively key-value cache default prompts from their own software reducing inference costs.
>See also: Microsoft and a whole bunch of other companies.
What does that have to do with Google?
Offering goods or services below the cost of their production is often illegal, though. It's called "dumping".
Although in this case it's probably impossible to define, given the complexity of calculating the true cost of tokens.
> Offering goods or services below the cost of their production is often illegal, though. It's called "dumping"
No.
Dumping is an international-trade term. It doesn’t even require pricing below cost, just aiming “to increase market share in a foreign market by driving out competition and thereby create a monopoly situation where the exporter will be able to unilaterally dictate price and quality of the product” [1].
Loss leaders are common in commerce and entirely legal, as are free trials. I struggle to think of a competent jurisdiction that bans them.
[1] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
4 replies →
So every company that is not immediately selling enough to cover its fixed costs and its variable cost should be illegal? Every company and every new initiative must be profitable from day one in your world?
7 replies →
And in this case the subsidy is paid for by tied sales from other users that don't actually use the service, which is another illegal business practice.
7 replies →
This obviously cannot be true, otherwise Costco would have been sued to oblivion for “dumping” their rotisserie chickens.
7 replies →
First of all, I doubt they’re losing money in inference. Even across subscriptions. This is a tired argument that has been repeated so many times on HN.
Second, that’s not what dumping means. It’s a specific term for international trade.
Third, it’s not illegal to sell something for below the cost to make it. That’s another common misunderstanding.
1 reply →
"PAYGO API access" vs "Monthly Tool Subscription" is just a matter of different unit economics; there's nothing particularly unusual or strange about the idea on its own, specific claims against Google notwithstanding.
Of course, Google is still in the wrong here for instantly nuking the account instead of just billing them for API usage instead (largely because an autoban or whatever easier, I'm sure).
The ban hammer is the scary part.
I am afraid of using any Google services in experimental way from the fear that my whole Google existence will be banned.
I think blocking access temporarily with a warning would be much more suitable. Unblocking could be even conditioned on a request to pay for the abused tokens
I doubt they would have the ability to charge them for it. They never signed up for api token usage?
There's nothing wrong or illegal with subsidizing products and that's not what Microsoft or others have gotten in trouble for doing. It's when they tie a strong monopolistic position (Windows) with bundling to prevent competition (Internet explorer). This is how Apple has operated with far tighter bundling and cross collateralization of their ecosystem without facing monopoly allegations. Google does not have a monopoly position in AI.
No, it's more like stuffing your pockets in all-you-can-eat buffet
Just because all you can eat buffet exists doesn't mean that the food is free or you can take away the food. The food exists in discounted rate only if you consider it unlimited food. For normal folks they make profit.
Claude code could possibly make profit because the average usage doesn't come close to exhausting the limits.
This exactly. I'm using 10% of my max plan on the weeks that I'm working a lot. Hit a 4-hour limit once over few months and never let it run overnight. And I'm very happy with my subscription
Its called economies of scale. When they server 200000 ai subscriptions they dont expect everyone to use the max. They expect some will use more and some will use less and at the end of the day it will even out. Thats how every service works that is for the masses. As soon as you want a guaranteed 1000 tokens you should pay for that.
If I pay for a subscription that guarantees 1000 tokens, I am paying for guaranteed 1000 tokens.
So you are saying a company should never reinvest profits in the company to support another money losing business until it’s profitable?
Should Netflix for instance not invested money from renting DVDs to invest in a streaming service?
Apple not use the profits it was making from selling Apple //e’s to create the Mac?
> So you are saying a company should never reinvest profits in the company to support another money losing business until it’s profitable?
If it makes it impossible to set up a competitor? Absolutely, yes.
> Should Netflix for instance not invested money from renting DVDs to invest in a streaming service?
Netflix was not priced below the cost of production from the beginning. You're confusing sustainable pricing and paying off all the capital spending immediately at launch.
A better example is Doordash when it was heavily subsidized by VC money: https://news.ycombinator.com/item?id=23216852 And it now faces several anti-trust lawsuits.
Netflix very much was priced below the cost of production for years and had to borrow money to make Netflix originals.
7 replies →
Subsidizing the cost of developing a product isn't necessarily bad, but predatory pricing that prohibits competition would be.
Not sure that this case is either. This is just idiots breaking the TOS.
So exactly what’s the difference between “predatory pricing” and pricing to gain customers and market share? Should Sony have to sell the first PlayStation off the line at $2000 (making up a number) so it can sell it at a marginal profit from day one or should it sell it below cost knowing that that over its lifetime if it stays at that price, it will both gain customers and sell at a profit in year 4 as the price of technology comes down and it gets economies of scale?
4 replies →