Comment by cheema33
4 days ago
> Fable-level results at 1/3 the cost
I am guessing this is not targeting those of us on the heavily subsidized $200/mo plans. Sure, these plans may be temporary, but none of us really know how temporary they are. Until then, 1/3rd of the published API pricing is not very appealing.
I burned though my weekly fable usage last night on the $200 plan. I had $200 in promotional usage credits and was in the middle of executing a moderate sized coding plan. Ran on usage credits for about 1h 15m and burned $120 in usage credits. I was astounded to see how fast the $ usage added up. One problem was that I was using sub-agent execution so multiple agents were running simultaneously and I realized at the end that claude had "Forgotten" my directive to use cheaper models as appropriate for sub-agent tasks so I was running multiple instances of Fable at once. Still hard to imagine paying per token. $200 a month is high, $200 per night is crazy.
I am too young (most of us on here are) to have lived through the paying for time on time-share machines in the 60s/70s, but this is giving me creepy memories of paying for sprintnet/telenet and tymnet... And I guess aol, compuserv, delphi. Are we really doing this computing model again?
If I remember well, visual studio/ msdn used to be like 5k-10k per year... Basically any IT tool cost a shit load of money.
I have in mind 50k-100k ish for 3d studio max or was it softimage? (Well seems softimage https://www.awn.com/animationworld/siggraph-news-announcing-... ).
So... Basically we are back to this era.
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well spotted, I couldn't place the feeling, me it's like paying per minute phone costs when downloading on a modem. You know it will cost, but you do it anyway.
The other weird thing about the subs is that if the agents aren't grinding if feels like I'm losing money.
That is really a great insight!
I stopped using sub agents after they caused me to hit my limit to quickly. Had to create a separate account and pay for another max plan to unblock myself temporarily
Yeah sub-agents are a scam and the results are always worse since you lose all context, caching, etc.
I used fable to design a front-end, and damn! It's good! Frontend coding is dead. Design in a way also.
And it was damn cheap too! The main page cost was like 5 dollar.
My current 30-day Codex usage amounts to over 15,000 USD in tokens.
You're good.
Dude that topped Meta's tokenmaxxxing board before it was shut down used 265 billion tokens in a month. I kid you not.
All enterprises users (people using them for work and not side projects) can't get the subsidized plans. I would say subsidized plans are a minority of usage?
People _can_ get subsidized plans for work: we use Claude Teams, $100/mo premium seat, which caps at 150 seats. Not enterprise tier, but fine for SMBs.
As long as you are fine with everything your team puts into Claude being retained by Anthropic. Afaik only enterprise API plans provide non data retention policies.
The subsidized userbase is large enough that cheema is right to call this out this distinction for other readers.
I imagine that most small to medium sized businesses are on either individual plans or Teams plans. The vast majority of firms do not need more than 150 seats, and API rates are not sustainable for most.
if this is true, the frontier labs are not able to justify their trillion dollar valuations, they are barely making anything on subsidized plans.
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I believe they will last until they IPO, and not long after that. $200/mo plans are not good for their P&L when their users using $10000 worth api credits. That's -98% margin loss per user.
People point to the equivalent API costs to show that they are getting a great deal on the subscription, 10,000 dollars worth of tokens for 200 dollars. I do wonder if it's the other way around though - are the API users simply getting ripped off? I have seen Dario say in multiple interviews that they are profitable on inference, which maybe he was only meaning to refer to API usage, but that's not the impression I got.
It's not a 98% margin loss if your users are unwilling to pay 50 times the cost that they were previously paying, and if they have other options like open source providers. The calculus isn't so simple because some portion of users would switch to API, and so it's about how many would continue using the service rather than leaving for a competitor.
I'm aware they need to recoup the enormous cost of training and data centers, but on a purely inference cost level I'm not convinced that the 200 dollar plans are unprofitable.
> I'm not convinced that the 200 dollar plans are unprofitable.
Especially considering not everyone is tokenmaxxing, and in most parts of the world people take leave and companies do not cut their subscriptions.
I suspect they are priced to have a lifetime average price/token amount that is roughly break-even, or maybe a slight loss leader.
> have seen Dario say in multiple interviews that they are profitable on inference, which maybe he was only meaning to refer to API usage, but that's not the impression I got.
I think he does mean API usage. Don't forget they can (and do) adjust the number of tokens you get on each plan at any time to adjust their margins on those.
That means he knows that is controllable, and it only the underlaying inference that defines the succes or otherwise of the company.
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Yea, it’s like pointing at the cost of renting all individual movies and TV-series at Netflix and concluding that Netflix subsidizes the subscription with tens of thousands of dollars.
I figured the subsidization is to entice people to give training data.
Are your thought patterns worth 9800 dollars a month?
What's the RoR on analyzing those thought patterns?
I simply do not believe the switching costs are high enough that they could eliminate those plans. The Chinese models will eat their lunch.
Open weight models are catching up, and I see no reason to think this will change. That will largely define the economics of this industry. It seems highly improbable that there will be people spending thousands on API credits will be a thing in the future.
No way in hell are the majority of Claude Code users burning 10k worth of credits. Many of them probably barely use it. There'll be a bell curve, and we have no idea what it looks like.
They don't need to be the majority. One big company paying 200/300k in credits each month easily makes up for the majority of single users not doing so. I believe AI companies today make money through b2b enterprise deals and not selling to individual users, the latter is mostly a marketing expense to get people to use their product instead than the competitors one.
> Sure, these plans may be temporary, but none of us really know how temporary they are.
Anthropic emailed me today:
That's going to be on the $20 plan. IIRC the $100 and $200 plans keep the 50% fable usage.
We got emails and UI messages informing us that Fable is now a standard part of Max plans (both sizes).
The half usage limit still applies.
I'm on Teams and Fable is now usage credit only.
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Unless you want to not get rate limited (or banned depending on how close you are sailing to the claw wind)