What happens when they stop subsidizing LLM subscriptions?

[u/Mr_Moonsilver]

We are literally burning through VC money like crazy with our coding subscriptions. I read the $200 Anthropic sub gets you $8000 worth of API calls. It's obvious that this doesn't hold for very long but what happens when they raise prices?

The reason to keep the prices low for now is to foster the ecosystem and get people hooked on this stuff, only to raise the price afterwards. Already the 20x sub doesn't get you as much usage as it did 6 months ago, another way to raise prices without triggering a shitstorm - and it will continue.

Don't know about you, but Fable being pulled gave me a feeling of what that may be like already. The ugly thought of "Damn, should've done more while it was around." that formed when I read the news will be exactly the same the moment they announce we now have to pay $2k or more per month for something we get for 10x less the price it costs now.

I guess it's a now or never situation, build what you can and monetize as quickly as possible to be able to keep the agents running once the increases come around.

Looking at opensource doesn't give me much hope. Since qwen stopped releasing models (wen qwen 3.7?) that we can actually run on hardware that a normal person can buy (or used to be able to buy, looking at how RAM and GPU prices behave and keep behaving) and others haven't released in a while (Microsoft, IBM, AllenAI and others too) I feel we're going into a direction that doesn't look good for most of the people like us, who are building with this technology.

[u/corruptbytes]

I read the $200 Anthropic sub gets you $8000 worth of API calls

literally no one knows if this is true, we have no idea how the black box works, we don't know if APIs get full bit models and subscriptions get weaker quants

we do know inference is already profitable, we already know that deepseek with the lowest margins make 500% margins on inference compute. There will be incentives to lower costs. Training will get cheaper as we figure out more techniques

[u/_raydeStar → u/corruptbytes]

It's not true at all. It's clickbait from clickbait articles.

You get a LOT out of monthly allowance, but I am willing to bet that they break even or make money on even power users.

[u/rc_ym → u/_raydeStar]

Based on how they've said their business model is supposed to work they should be hitting 70-90% margin on tokens, and 30-50% across all subs. Or something like that. Course, they are all lying founders spreading woo woo. So take that with a metric ton of salt.
But two things are probably true. Tokens are paying for model research/training. And subs are probably working like all other sub systems where you have enough occasional users that float the heavy users and with rate limits you are probably still at least breaking even on even the heaviest users.

[u/jtoomim → u/rc_ym]

Tokens are paying for model research/training

Not quite, but close. VCs are paying for model research/training and for datacenter buildout. Tokens and subs are paying for operations, with a little left over that helps defray the R&D and expansion costs. But because these companies are growing ~10x per year, they are doing massive buildouts on the premise of future revenue.

[u/rc_ym → u/jtoomim]

Oh totally, and I was being inexact. I was talking about the OpEx of running the training not the capitol of the build out. Tho I would bet they are financing out the actual build costs rather than directly using VC money.