← Back to context

Comment by lelanthran

2 hours ago

> When discussing LLM pricing, people are missing the plot. [ ... snipped ...] Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing.

And you think it is unreasonable to consider this unsustainable?

8 comments

lelanthran

Reply
z2  2 hours ago

And the direction is definitely towards removing that subsidy really soon. We can see it with OpenAI's shift to API-equivalent pricing for enterprise customers last month. Anecdotally my company saw OpenAI credit usage grow 2x with stable use across the ChatGPT platform, which is pretty terrifying considering just 2% of the company uses Codex.

For context, ChatGPT business subscriptions give you a fixed pool of credits to use, after which you get billed a la carte at inflated 1.75x rates vs API, or if you don't want to pay, you get access to anything but the non-reasoning models turned off for the month.

We also tried Claude Enterprise, which was unusable as people blew through their monthly limits in a matter of hours.

wongarsu  1 hour ago

Depends on what their actual costs are. Either they are losing lots of money on subscriptions, or they make absolute bank on API pricing.

Looking at the pricing of 1-2T models like Kimi or DeepSeek on the open market, I'm tempted to assume that inference costs are closer to subscription pricing than to API pricing.

Especially considering that subscriptions a) distribute load over time via rate limits, and b) will include a lot of users who get only a fraction of the possible value, whether they are on a personal account where they are on the rate limit on the weekend but barely use it during the week, or are corporate users who were issued an account they rarely use. Subscription prices are usually measured on the average case, not the most extreme value a power user can get out of it

  • runtime_terror  1 hour ago

    > I'm tempted to assume that inference costs are closer to subscription pricing than to API pricing

    So just going on vibes?

    While some people don't like his content, Ed Zitron shows a lot of evidence for your assumption being very wrong.

    These companies are bleeding cash at ungodly rates. It's likely their API pricing is still subsidized if you look at their overall financial picture.

    Related, there's a good reason those API prices keep going up a lot every new version and it's not just because the models are better.

    • wongarsu  29 minutes ago

      Selling inference for more than inference costs is not incompatible with bleeding cash at ungodly rates. They do in fact pay ungodly amounts of cash for other things, like training, marketing, etc. Heck, you can bleed cash while being profitable (in the accounting sense)

      Also, API prices going up a lot every new version is more an OpenAI thing, and even there it's a recent trend: GPT 5.0 was a big price drop compared to 4.1, and 4.1 was cheaper than 4o, which itself got a price cut at some point and is cheaper than 4. Meanwhile Anthropic's API pricing stayed stable for many versions, then got slashed to a third with the 4.2 release and have stayed at that level since.

  • Forgeties79  1 hour ago

    Considering not one company is in the black yet I don’t really know how we can say anyone is making bank, unless we want to count absurd levels of VC funding (now slowing down) I guess.