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Why do people keep insisting that subscription plans are subsidized? They are not. API prices are outrageous, designed to milk enterprise users. They probably h
by mirzap 19d ago
Why do people keep insisting that subscription plans are subsidized? They are not. API prices are outrageous, designed to milk enterprise users. They probably have an 80-90% profit margin on subscription plans.
Inference is cheap; Dax once said on a podcast that Opencode has a close to 90% profit margin on the openweight models it provides inference for (at 10x cheaper pricing). Those models are close in size and spec to models from large labs.
- sunaurus 19d agoTo provide inference, Anthropic and OpenAI need to also constantly spend resources on training new models. If either one of them stops doing that, customers will stop using them, because other models will become better. In other words, there is no point in talking about inference cost in isolation.
- citrin_ru 19d agoOpenAI leaked financial data (2025) suggests this - it has $5.7 billion for marketing which 44% of revenue. It’s hard to explain where these billions go other than into subsidised subscription plans and a free tier.
- owebmaster 19d ago> Inference is cheap; When they outsource training to China they will be so profitable!
- redox99 19d agoBecause using chinese models on OpenRouter is way more expensive than the equivalent codex sub, unless you use something clearly inferior like deepseek flash.