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I guess enjoy it while it lasts? OpenAI won't be able to subsidize that forever either.
by wsatb 4mo ago
I guess enjoy it while it lasts? OpenAI won't be able to subsidize that forever either.
- flatline 4mo agoI don't think anyone has a firm grasp on actual inference costs -- including the research and training that has gone into those models. We've got near-frontier capabilities from open source models from China at pennies on the dollar compared to US big tech rollouts. OpenAI and Anthropic are heavily subsidizing their inference -- no wait, they are charging the most they can get away with before going public. Where is the truth?
- MichaelMedbed 4mo ago[flagged]
- andrewmutz 4mo agoBoth can be true. They can be charging what the market will bear, and still be charging less than their costs of running it.
- wyre 4mo agoThere is no way I'm believing DeepSeek can charge less than $1 USD for their pro model while Opus costs over 25x more, yet their price is less than the cost of running it?
- kube-system 4mo agoIt would seem strange, if they were operating in the same economy, but they don't. DeepSeek operates in an economy with a high degree of central planning. China subsidizes strategic industries, and they have heavily done so with AI. And DeepSeek specifically has said they have no commercialization plans. For example: https://www.boc.cn/aboutboc/bi1/202501/t20250123_25254674.html https://www.boc.cn/aboutboc/bi1/202501/t20250123_25254674.ht...
- deleted 4mo ago[deleted]
- wyrdcurt 4mo agoDeepSeek is not the only provider of inference for their models. Chinese subsidies likely do explain DeepSeek's ability to provide inference cheaper than other providers, but even a US provider like DeepInfra can serve DeepSeek 4 Pro at $1.30/M in and $2.60/M out. Unless American labs are doing something wildly inefficient, it feels safe to assume Anthropic has some profit margin on inference at API prices.
- kube-system 4mo agoThey may, neglecting overhead R&D. But also, some suspect that US models are significantly heavier than DeepSeek in resource consumption by multiple measures It’s generally established that Anthropic/OpenAI are going for all out performance with big VC dollars at the expense of efficiency and China has geopolitically limited compute and an inventive to compete on value per dollar.
- re-thc 4mo ago> There is no way I'm believing DeepSeek can charge less Why not? Hetzner charges WAY less than AWS too. Can you not believe that?
- orangecat 4mo agoThat's the point. Hetzner is presumably covering their costs, so it's a safe bet that AWS is profitable.
- pimeys 4mo agoWe pay by token at work. I just finished one session with Opus that was 4000 dollars. In about three days. Now that 200USD subscription starts to feel cheap...
- zozbot234 4mo agoThat would be about ~300 tok/s over 72 hours at Claude Fable output token prices? I'm not sure that this passes a sanity test.
- unholiness 4mo agoSubagents are a helluva drug.
- rubyn00bie 4mo agoJust outta curiosity, as I’ve never gotten a spend anywhere near that, what variant were you using? Like max context window and fast mode? Or was it just chugging along non stop for three days?
- pimeys 4mo agoFast mode max content window. The task was: replace all 1600+ queries from one database to another and make the whole integration test pass. We did multiple passes, with different concerns when changing from database to another. My OpenCode session right now says $4,365.02. I haven't gotten close to this either before, but now we wanted to move fast because this branch gets conflicts all the time and we want to get over with the migration asap.
- rglullis 4mo agoIt's a bit of a left field question, but I am curious: Let's say that if the company wasn't paying the whole bill but only subsidizing it - e.g, if it paid 90% of the $4000. What would you do?
- 4mo ago
- dontlikeyoueith 4mo ago> OpenAI and Anthropic are heavily subsidizing their inference -- no wait, they are charging the most they can get away with before going public. Where is the truth? Both. They are charging the most they can get away with and that amount is still heavily subsidized by VC capital.
- schaefer 4mo ago> I don't think anyone has a firm grasp on actual inference costs. There are huge numbers of users (myself included) that do have an exact idea of what inference costs are - on open models. We can buy tokens from 3rd parties that have no motivation to subsidize our use. That's to say, there's a fair marketplace[1] and we're hanging out there. If you want to say "I don't think anyone has a firm grasp on actual inference costs on these proprietary/closed models", then I could agree with that. [1]: https://openrouter.ai/rankings#leaderboard https://openrouter.ai/rankings#leaderboard
- logicchains 4mo agoWe have a firm grasp on actual inference costs from the various open weights model providers on OpenRouter. They don't have the money to subsidize inference and it's quite a competitive market, so the prices are representative of the costs.
- InsideOutSanta 4mo ago> I don't think anyone has a firm grasp on actual inference costs -- including the research and training that has gone into those models We know roughly how much these companies spend and what their revenues are. Based on that, they'd have to more than double revenue (without spending more money) just to stay even, and that's not good enough given how deep in the hole they are. > OpenAI and Anthropic are heavily subsidizing their inference -- no wait, they are charging the most they can get away with before going public. Where is the truth? Both are true. I mean, I'd be willing to spend a bit more than I do now, but not more than double, and neither are most companies. The company I work for is currently investigating how to reduce LLM spend, not looking to spend more.
- ChrisMarshallNY 4mo agoI'm planning on switching from the $20/month to the $100/month plan. It's worth it, and I can afford it, but I am not really the right type of user for token-based usage. It's all for personal and free work.
- micah94 4mo agoJust a personal anecdote but I have not hit any more thresholds or limits since switching to the MAX plan and so far, it's been worth it. But I do wonder how long even this will last...
- ygjb 4mo agoI think subscription models are sustainable, but longer term, we should probably expect to see more prompt optimization happening in the providers inference pipeline. For example, unless you explicitly tell the agent or API to use a specific model, fronting the inference layer with a caching prompt classifier to determine which model to use, and automatically select the lowest cost model would probably already save alot of money (IDK if Claude/OpenAI do this on the backend, but several services I have worked on do some things like this to reduce costs of delivery customer facing inference at scale).
- wahnfrieden 4mo agoChatGPT does this and codex will eventually. They’ve stated it’s the future.
- Majromax 4mo ago> fronting the inference layer with a caching prompt classifier to determine which model to use, and automatically select the lowest cost model would probably already save alot of money Unfortunately, that doesn't work within a single session. The K-V cache of a model is intertwined with the model's configuration. Switching models invalidates the cache, meaning everything up to the point of the switchover is processed like a new, uncached input token. Per Anthropic's pricing doc, an Opus 4.8 cache hit costs 50¢/MTok, while Haiku costs $1/MTok for uncached input. Model selection works best if sessions are short and self-contained, particularly if the first few interactions can reliably classify the model need. That probably covers most 'support chatbot' use-cases, but it doesn't describe the kinds of heavy agentic automation that really chews through token budgets.
- andai 4mo agoA few weeks ago they massively cut usage on free tier.
- windexh8er 4mo agoAgreed. I think the Chinese labs are proving that OpenAI and Anthropic don't have a moat in almost every aspect, especially pricing. I also think people are getting annoyed with the constant lift and shift. I've seen more folks drop Claude Code and Codex, specifically, because of the lock-in it provides the providers. I'm curious to see how people standardize on tooling adjacent and if Anthropic, Google or OAI move to block utilization akin to the games Anthropic has been playing as of late. I think the end game is routed model usage and SLMs. I think Apple is going to prove this in the consumer space pretty handily and I'm curious how the Android ecosystem responds since the hardware is considerably lacking in model performance. I think Apple has a huge opportunity here, as much as I don't like their current ecosystem of walled garden. They did position themselves very well with ARM and custom chips for their hardware. Hopefully the broader ecosystem of ARM and Linux are able to make some headway and we see a more formalized, and broadly accepted, architecture to capitalize on.
- maxdo 4mo agoI see exactly opposite . Chinese models fails under any complex scenarios, while us labs raise the price , that's a sign of confidence.
- re-thc 4mo ago> while us labs raise the price , that's a sign of confidence Regardless of what others are doing, US labs here are just rushing to IPO. It's NOT a sign of confidence. It's the equivalent of saying you have confidence in SpaceX making revenue by renting out their data center (instead of their AI making bank).
- maxdo 4mo agogoing to IPO is a sign of confidence , you need to report a lot of things, that private companies don't. This is an exact reason chinese labs do not rush to go public. They wish to go , but money flow that is not as good. On the same note. if spacex is doing datacenters on earth successfully what's wrong with that? They rented cloud infra to a #2 or #3 provider in the world after < 2 years in business. It's a success, no?
- gck1 4mo agoNothing is subsidized. Subscriptions are profitable for both Anthropic and OpenAI. Anthropic wanting to switch billing to API rates is them just wanting to generate more profit.
- y1n0 4mo agoThat's interesting. Do you have anything to back that claim up?
- gck1 4mo agoI do, and it's called DeepSeek's pricing table. At the same time, "subscriptions are subsidized" cohort have no data whatsoever, and yet they're in every thread. Granted, it could still mean that Anthropic just chooses to lose money - but that's Anthropic's choice. DeepSeek has proven that inference can be much, much cheaper than what Anthropic advertises on their API rates page.
- nickthegreek 4mo ago> Granted, it could still mean that Anthropic just chooses to lose money - Then the cost is being subsidized by investor capital, but it is still subsidized.
- rvnx 4mo agoand soon by everyone who is invested into the NASDAQ, some sort of exit scam, but with a real product though
- InsideOutSanta 4mo ago> Nothing is subsidized. Subscriptions are profitable for both Anthropic and OpenAI. Even if subscriptions are locally profitable (i. e., the cost of the subscription covers the cost of inference), they're still subsidized because they don't cover training and running the company; otherwise, these companies would be profitable.
- pyeri 4mo agoMy bet is they'll keep subsidizing for a considerable period of time, at least 1-2 decades more. Most AI companies are just testing the waters with paid tiers right now, their greatest fear with increased pricing is folks reverting back to wikipedia, stack-overflow and other public domain organic activity buzzing back to life; that will kill any RoI potential in LLMs forever. They're playing the wait game instead, observing how the digital sphere reacts to every little increase in price. If that weren't the case, they'd be pricing at lucrative premiums already and even gotten away in short-term considering the increased dependency in the enterprise world. But that'd be like killing for the golden egg too soon and losing all long-term potential. Once the folks are so addicted to LLMs that even writing a hello world program sounds like a nightmare and coming up with an article draft feels like reinventing Egyptian glyphs, that's when the real pricing hammer will come.
- wsatb 4mo agoAnthropic and OpenAI won't be around in 1-2 decades if this is their long term plan. People are not going to revert, but go elsewhere. China is proving that it can be done cheaper.
- raffael_de 4mo ago1 decade = 10 years ...
- jrflo 4mo agoOh for sure. I've been hopping around from provider to provider for the last few years just depending on who has the most capable / subsidized plans at the moment. I definitely expect there will be a squeeze on subscription costs all around the industry post IPO.