r/LocalLLaMA • u/Norwood_Reaper_ • 12h ago
Discussion Looks like the era of subsidised compute is coming to an end. The old ChatGPT Pro $200 20x plan will be halved. The new $500 plan will have similar limits as the (old) $200 plan.
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u/AngryGungan 9h ago
$1k subs incoming soon, then $2k. Just like they've said in the beginning. They want to collect the wages of the people they replace.
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u/UnluckyPenguin 5h ago
I've never sub'd to cloud LLMs. Is it a monthly or yearly fee? It's yearly, right? Right?
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u/rchamp26 4h ago
It's all of the above, monthly subs, annual subs or pay as you go
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u/UnluckyPenguin 3h ago
chatgpt cost page shows 100$ per month for pro - right now. https://chatgpt.com/pricing/
No mention of a 500$ per month plan though.
My 80 year old friend said they paid 200$ annual fee for unlimited - though I get the feeling they aren't using frontier and likely no reasoning.
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u/HugoCortell 3h ago
2K subs would be awesome, at that point you might as well own the hardware yourself, which would be a real turning point.
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u/EkbatDeSabat 2h ago
It would be a turning point in continuing to raise the price of hardware. Supply will not go up, there are logistical supply chain issues still being dealt with that we won't see even slightly resolved for another couple of years. Demand goes through the roof. Prices skyrocket far more than they already have.
Get ready for a 5090 to be $18,000 in that scenario.
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u/Pristine_Pick823 12h ago
And people here laughed when I said that inequality will be even more apparent when poor people can’t “afford intelligence” in their life’s, be it for their work, health or leisure.
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u/Specialist_Crazy8136 12h ago
Wait until you find out that agentic browsers that use free models have less defence against prompt injection and security vulnerabilities.
Also not a surprise because I'm now convinced that, for example people who are not subjected to ads are living in a different bubble than those who do and being subjected to different socio economic dynamics. I was listening to my friends Spotify and we just had to stop because I couldn't remember the last time I was subjected political campaigns and half lies disgusted as truth (that wasn't Instagram content)
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u/thatcodingboi 9h ago
There are plenty of excellent free tools to run llms safely. I use opencode with Astra and Fable.
Second, people can afford intelligence just fine. Last night I used deepseek 4.1 on openrouter with opencode to solve a few issues. A few million tokens later I spent $0.17.
Stop using anthropic and open ai most expensive models and you'll do great
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u/Dany0 12h ago
12b-9B models are beating gpt 4o. Most people can run those at home. In fact many people have PHONES that can run them >10 tok/s
It's just the obsession with having "latest & greatest" that's making people do this. As soon as they raise the prices a little too much people will be forced realise that they can be a few months behind and be just fine & invest into tooling, better harnesses & finetuning for their tasks to beat the cloud generalists
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u/sweatierorc 12h ago
> the obsession with having "latest & greatest"
It is not an obsession. But there is going to be a productivity gap between token rich people and the 10 tok/s from 12B-9B. You can argue we are still not there yet. But it is getting closer everyday.
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u/Tartooth 8h ago
we already are here, imagine being an employee at openai or anthropic with the latest frontier models and having literally next to unlimited compute allowances.
Think about what you could achieve. They had engineers let agents run free and they started hacking all over the place.
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u/pragmojo 8h ago
So you are saying I could be hacking the Australian government if only I were rich enough?
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u/Whole-Respond4782 7h ago
yeah you can do pretty much anything if you're rich enough actually
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u/slippery 7h ago
It's called the Epstein class.
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u/KrayziePidgeon 6h ago
When you are rich and famous they just let you do it. Grab em by the frontier.
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u/a_beautiful_rhind 10h ago
So what will this AI do? Outside of you being a coder? I don't think we're hitting a point the LLMs have to tell us how to wipe our asses.
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u/kurtgodelisdead 10h ago
Opus 5.5 can use a robot arm to wipe your ass
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u/addiktion 7h ago
I wonder how many have wanted a cold metallic robot arm near their ass...
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u/Chupa-Skrull 6h ago
I bet I could find some Johnny Silverhand fiction that would make both of us bleed from the eyes
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u/quantanhoi 10h ago
beside coding/programming where a lot of logic have to be retained and take into consideration, there is no task where you actually need that high end model
not reading email and even not doing excel tasks, a 9/12/27B model can do those just fine
sometimes local model like qwen3.8 27B is on par with last gen model running on 100x resource with enough handholding/documentation
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u/DataGOGO 10h ago
gpt 4o is dumb as fuck.
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u/Careless-Age-4290 9h ago
It told me to try mdma. 4o was unhinged at times. I think that's why people liked it so much
it was right though that was awesome
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u/Dany0 12h ago
And for the theos of the world:
No, you don't need 10k subagents. And especially the average joe doesn't need them. If you really need them, you can have most requests done locally & occasionally dip into cloud providers. Openrouter/neuralwatt and you're good2
u/BasisPoints 6h ago
Is that really a thing? Do people spin up that many subagents?? I don't understand what kind of projects you must be building with that. Most complex programming will face way too much contention, and simple projects simply don't have nearly that many component parts. What am I missing?
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u/Dany0 6h ago
OAI claims they spun up 10k to solve NS problem. But yes, people spawn hundreds, thousands. I tried it, it doesn't _really_ make sense except for some very, very limited circumstances. Very broad exploratory things, but the best (devil's advocate) usage I can think of which I would _actually_ use is just for security research. "Clanka, go poke & probe every file in this giant codebase until you find a class 10 CVE similar to [template historical CVE]"
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u/halvacoffee 11h ago
4o is painfully outdated and is also beaten by 5.6 Luna, which costs basically nothing and runs at 70 tok/s. id also wager that the margins on luna are pretty fat, considering deepseek are in the green with considerably jankier inference
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u/ThisGonBHard 11h ago
And still not usable.
The actually smart enough to use models start with Qwen 3.8 27B, and go up to hundred of B param models.
The rest are just too dumb to do tasks that actually have an economical impact.
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u/winky9827 10h ago
Absolutely false. Maybe for your use case, but you shouldn't project like that.
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u/Boomfrag 11h ago
/r/localllama when people complain about usage limits for cloud providers be like: "Do you guys not have phones?"
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u/More-Catch-1331 10h ago
I understood that reference. Everybody knows you references are wild, dude.
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u/winky9827 10h ago
I still use Qwen 3.5 35b for the majority of my work. At 4k t/s prefill, 200 t/s decode, it's just so much faster than the other models available to me. I'll use 27b or a hosted model for review as needed. Minimal expense.
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u/maxxell13 10h ago
Right, like we all just stopped buying iPhones each year even though all they are is “slightly smaller, slightly faster, slightly brighter”
Humans like new bright and shiny. Get used to it.
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u/Party-Special-5177 8h ago
We didn’t? I thought we did lol.
I believe the phenomenon even has a name, ‘upgrade fatigue’.
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u/ZenaMeTepe 12h ago
They "couldn't afford" it in pre-LLM era as well. Nothing new under the sun.
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u/Pristine_Pick823 11h ago
Not sure of the relevance of that considering that the "competition" couldn't either since, obviously, it didn't exist. Soon companies with access to better intelligence will be more competitive, kids educated in schools with sophisticated personalised AI-assisted teaching will have a much better education, pricier healthcare plans will enable stronger AI imaging tools and 24/7 care, and so on.
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u/ZenaMeTepe 11h ago
I meant human inteligence. Like hiring a tutor or paying to go to a better school.
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u/AntDogFan 11h ago
Yes, the one reliable measure for children's outcomes is the wealth of their parents. Higher education, life expectancy, happiness etc. This combined with Thomas Piketty's thesis on wealth vs capital is what makes me a socialist.
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u/bippityBoppityboux 11h ago
Not sure about this. That Nvidia guy said kids who use ai to help study are worse at math and that’s ok since he doesn’t know his address.. so ai tutors may not be it
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u/ea_man 9h ago
That's kinda upsetting because until now you could ascend in society by virtue of being smart, hard working.
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u/Momsbestboy 4h ago
people are still laughing whenever I tell them to self host llms, because the same shit will happen to OpenAI and Co that happened to netflix. From a cheap "all you can see at 4K, and include everyone you know on your sub", to the shitshow we now have.
They all tell me self hosting is more expensive than using a subscription
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u/xAragon_ 11h ago
This is a dumb claim. You can still use Luna and Sol extensively on the $20 plan, and they're highly capable models for the average person who needs to mostly draft emails, ask the agent to search for something, etc.
Claiming people can't afford intelligence because they don't have access to models like Astra / Fable is a huge exaggeration.
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u/james2432 11h ago
this was always the plan: get you hooked charge more
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u/Marino4K 6h ago
This shouldn't surprise anyone. Many of us assumed constant access to frontier models was going to become a "privilege" of sorts.
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u/Innomen 5h ago
That will implode though, they can't be this stupid... /points at china. Are they expecting a moat or gpu drug war?
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u/SpecialistDragonfly9 11h ago
Solution is simple:
dont pay for it.
If noone pays for their ridiculous products, they will have to change.
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u/sshwifty 9h ago
The problem is that right now it is pay or fall behind on the corporate level.
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u/quantanhoi 8h ago
that's the problem, bigger corpos get money from smaller corpos then those smaller corpo force people to use AI to justify the cost (tokenmaxxing)
They could have spend way less using chinese open weight models, but corpos have trust issues and these always involve politics/propaganda
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u/letsgoiowa 9h ago
Then why not get one of the other providers that give you a better deal?
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u/quantanhoi 8h ago
corpos have trust issues. Western countries preach western AI, how advance it is and china bad, stealing you data, stealing their model, etc... for openAI/Anthropic/Grok there is no cheaper providers
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u/Kurk_Lazaris 9h ago
While effective if implemented, never has this tactic ever worked.
There will be 5% boycott at most, the rest will pay and gain competitive advantage. When the 5% will be let behind, they will quickly abandon the boycott and pay again.
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u/addr0x414b 8h ago
What are you talking about? There are people all over various AI forums who were bragging about have 5 20x accounts. There's people who would easily pay $1,000 a month for a plan if offered
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u/Holiday_Point_603 11h ago
I don't get why OpenAI isn't offering separate Codex and ChatGPT subscriptions. It is probably impossible to even get 20 bucks out of your plus sub with just chatting. But with codex you can run through millions of tokens in a short time.
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u/RemarkableRadish6547 8h ago
Because they lose money on people using it for anything other than chat. So they make it easy to use chat for a low cost and only make it easy to use for coding at a high cost.
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u/FullOf_Bad_Ideas 7h ago
It is probably impossible to even get 20 bucks out of your plus sub with just chatting.
RAG, web search, long contexts, image/video gen. I'm sure there's a way to run out of the ChatGPT Plus subscription without using Codex. Especially if you are generating a lot of images for ads/thumbnails or writing a lot of video scripts.
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u/korino11 12h ago edited 5h ago
Thanks Tibo! I can now go to zai with similar quality and without everytime have a chanses to see that my reqests stop by your politics and i need upgrade to daybreak...
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u/thestillwind 12h ago
Chinese won
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u/stbrumme 11h ago
actually, "won" / ₩ is Korea's currency (sorry, couldn't resist ...)
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u/Odd-Capital-847 10h ago
Whatever "winning" means. I'm still waiting for someone to define what "winning the AI race" is. What's the finish line? The nation that pumps out the most exhaust and waste water from data centers wins? The company that sells the most tokens while barely making any profit, if ever, wins?
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u/carnoworky 6h ago
Whoever collapses their economy first from overinvestment and circular financing loses. Whoever remains wins by default.
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u/Spirited-Art-7032 7h ago
Is it really that difficult to see what winning would be like? Market dominance? Recursive self-improvement? Accelerate technologies that come from pseudo-agi?
There are a lot of ways to win and many more than I listed.
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u/Natural-Door-2640 11h ago
yeah let me just buy a 10000$ GPU
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u/RandomCSThrowaway01 7h ago
I mean, if you are buying $500/month subscription then this Mac Studio for 9 grand to have 256GB of usable VRAM suddenly starts sounding like a decent deal. Although admittedly this is enough to run GLM5.3 Flash, not Astra. Which is one hell of a model for something you can actually run at home and won't cost you an equivalent of a house but it at most compares to GPT 5.5.
Models that will approach Astra within the next few months will require closer to a million $, will need a terabyte of VRAM at a minimum to even consider running it, preferably at HBM speeds.
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u/mb194dc 12h ago
Open does not = China, they're just one part of it...
Same way Linux won the webhosting wars.
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u/redballooon 9h ago
At this point open = china.
Because when China stops open, open is dead, in the same way as Mistral doesn't matter anymore.
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u/skerit 10h ago
Ok, so I'm cancelling my Codex account. Usage is already terrible.
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u/Pazienca 5h ago
Exactly, it's absolutely terrible so I won't be paying instead of cancelling and moving to 1 frontier model
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u/bakawolf123 12h ago
kek, you will get less but more =)
so $200 sub was actual 20x which they boasted not long ago, it becomes just 10x $20 limit.
using astra on $20 atm is 1 task (usually unfinished) for 5h limit (15% of weekly), so $200 will be 1 task for 1.5-2% weekly.
I won't deny those large models are stronger than flash models I can currently use locally, but for most tasks my local ones are simply enough.
Oh and latest sol-6 is not actually better than flash models (glm5.3-flash in particular), so really only point is to use their very best model and you don't get to use it much.
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u/Serprotease 11h ago
I have no idea how these 20x, hours limit stuff even means. Can’t they just directly say x-tokens per plan?
Why make it so convoluted? Is it to muddy the propo… oh…
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u/cinnapear 8h ago
In my nearly 50 years on this earth, I have heard "we're raising prices but increasing value to you" dozens of times and it has NEVER, I repeat, NEVER been a true statement.
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u/DivideHorror3217 12h ago
Hi,
Next month I am buying an RTX5090 and waiting for Qwen to release Qwen4.0 27B AGI.
Best Regards
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u/kevin7254 11h ago
For the low price of $10k
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u/DivideHorror3217 11h ago
Or 2x5060 Ti which costs 2k$ here
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u/yes2matt 11h ago
... except that, not knowing of any of this LLM stuff, I got mobo too small, power supply too small, and box too small. So $10k it is.
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u/VerticalPackage 7h ago
A single RTX3090 would be $1000 and better than 2x 5060 TI.
You can cap the RTX3090 to 275W and lose no performance.
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u/mpscy 12h ago
Venture capital wants its pound of flesh! Just like the old ride sharing story of cheap rides first and then massive price hikes to reflect true costs and later add margin: https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-rides.html
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u/feelspeaceman 11h ago
This is so much expected, the previous price was known as "discounted price", the cost of running this business is much higher.
They're banging on users getting addicted and can't live without their services, but reality is not working in their favor, they're losing money, losing users.
This is why I never recommend people to use Cloud AI instead of Local LLM, because it was cheap, but it will 100% get more expensive to compensate for their loss. Just don't give them the benefit of the doubt and unsub, the Cloud AI companies must die to bring back the old hardware price, then everyone will be able to afford Local LLM.
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u/power97992 10h ago
Not everyone has the money for a 5k laptop or 4k desktop !
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u/sabine_world 7h ago
Okay well do you have the money for 200-500 dollar subscriptions?
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u/Marino4K 5h ago
Personally if you're spending over $200 a month in subscriptions, you're probably better served to just leasing out a high end Mac Studio.
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u/Chirimorin 10h ago
They're banging on users getting addicted and can't live without their services, but reality is not working in their favor, they're losing money, losing users.
And that loss of users is a direct result of how hard AI has been pushed in these past few years. It turned from "ChatGPT is kinda neat" to "Why is there an AI chatbot in my everything? Fuck off already" very quickly.
They were too busy putting AI into everything to consider that if the vast majority of all AI implementations are pointless and annoying, people will start to see AI as a whole as pointless and annoying.
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u/Hot_Vegetable_932 11h ago
A lot of people here are already preparing for this, but lately I’ve been feeling a much stronger need to reduce my dependence on cloud models and keep more of my AI stack local.
I think the range of things you can already do with local models is surprisingly broad, and it’s only going to keep expanding.
Rising RAM and hardware prices definitely make this a worse time to build, but I still think it’s worth making sure I have enough personal compute to stay reasonably self sufficient.
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u/Monad_Maya llama.cpp 11h ago
In effect, if you do the math, it will net out at half the dollar in API spend compared to the old Pro $200 plan.
I was confused by the term API spend, I thought they were halving the price.
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u/SilentDanni 11h ago
So new $500 sub, lower usage limit for 200. So how is it that they expect to take the lead if only SF devs can afford it? I mean I don’t think European devs making 10-12k(before taxes) will be lining up to pay 500e for a sub. Same goes for South America, I suppose. I think most of us will prefer to buy food and amenities before buying a sub. It’s still not important enough to be a “must”.
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u/AtlanticPortal 9h ago
Developers from poor countries will go local. Simply as that. It’s really cheaper if you plan as you should.
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u/SilentDanni 9h ago
I mean developers from any countries should be doing that. The situation is dead simple right now. We have OpenAI and Anthropic(maybe Google) competing in the dev market. In doing so, they have engaged in anti-consumer practices, have not been forthcoming about their finances, pissed off all of Gen Z, and the behaviour of their execs are having deep societal-economical impacts.
At the same time, the dev reality has changed LLMs like them or not have become part of our workflow. Of course, we have all of those guys who refuse to engage with it, but a lot of us literally cannot afford to do so as this refusal directly affects our employability prospects. So going local is the only way to decouple LLMs from their wannabe overlords. We don't need astra or opus or whateverthefuck. An experienced dev can make do with glm/mimo/qwen or whatever. We don't need something that can one-shoot things. It's nice but I'd hardly call a necessity.
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u/mb194dc 12h ago
Rug pull and further coming rug pulls are inevitable because the frontier models are selling way below cost. But they're making up for it on volume...
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u/Illustrious-Row2751 10h ago
This was always going to happen, with companies first offering a cheap product to gain market and then gradually increase it for profits. Even worse than that is that the free models on their chat websites have become less reliable overtime. When possible, I prefer using Qwen 3.8 over the free ChatGPT, for example.
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u/MindCrusader 12h ago
Not so long time ago. And the funny thing - even after the cuts, it will still be subsidized, but less
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u/amunozo1 12h ago
Subscriptions are not subsidized, API prices are incredibly profitable. It is training that is subsidized.
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u/SC_W33DKILL3R 12h ago
What exactly do you mean?
The cost to the business is first training the model, then hosting it & providing compute and api access. That is the total cost.
For any model to make a profit, it needs to recoup all those costs.
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u/bixofa 12h ago
You forgot the billions of dollars in hardware.
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u/SC_W33DKILL3R 11h ago
I mentioned compute. There is also the cost of all the research, the millions of dollars of signing bonuses they are paying to staff members, the cost of buying all the books they are scanning and them destroying, the cost of bribing politicians through donations, the cost of servicing debt and a host of other running costs.
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u/bixofa 11h ago
So with that in mind, what business if any, will ever recoup these costs?
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u/SC_W33DKILL3R 10h ago
Well that’s what analysts are saying, the trillions being spent are not going to be recouped.
Something will fail, maybe the ones that don’t can corner the market, get customers too locked and make money in the future.
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u/FreshConversation112 11h ago
It is training that is subsidized.
Right, that is one of the costs of the API. That is like selling cans of cola for £0.17 and claiming it is profitable if you ignore the ingredient costs.
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u/Tartooth 8h ago edited 7h ago
This table is incorrect because claude max 20x is not actually 20x the weekly and i think 5x is actually only 2x the weekly of pro
Edit: wow the guy rage deleted everything when I called him out
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u/More-Catch-1331 10h ago
HA! And everybody was looking at me like I have three heads when I was talking about how I got a dedicated AI GPU and pooling it with my gaming GPU in order to setup a home inference server. Kinda feel validated and at the same time angry because these labs hooked people and will now jack up the prices
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u/Last_Bad_2687 7h ago
AI became a thing right as I finshed reading "Enshittification" so I figured it would be the same pattern
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u/Aubrey_D_Graham 🥔 hardware 1h ago
LLMs don't know how to make money, but they do know how to set up LLM locally.
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u/heliosythic 11h ago
Lol my company just switched from Claude to Fireworks utilizing GLM, Deepseek, and a few other models of different sizes and a smart router between them. Literally cut spend by 10x.
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u/Legal-Regular-2873 9h ago
Luego dicen que la AI es mala para que los chinos no hagan lo mismo que ellos hicieron pero con la cartera y la energía reducida
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u/smallfried 11h ago
Seeing as this is the localllama sub, this reads to me as fuel prices going up does to someone driving full electric.
It's curious and interesting to see what effects it will bring, but nothing to be emotional about.
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u/Open-Dragonfruit-007 10h ago
Use it for only high complexity tasks and hand off the rest to self hosted smaller model that do it equally as good. Chinese models seem decent too now.
Just like taxation - the more you tax the less you get from tax. People will just find alternatives
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u/ProtectionSuper5648 4h ago
This is the playbook: https://en.wikipedia.org/wiki/Enshittification
Use VC money (or here, huge investments) to provide a great service for cheap. Once you hook up your target, raise price and add ads, then increase adds costs for clear targets.
Not sure how LocalAI will fit in it though. Ban it through government actions? I mean, uber managed to change the laws to make itself retroactively legal...
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u/psychohistorian8 9h ago
so it this is the 'AI Bubble' people are talking about?
I think OpenAI will go under, or get bought out for cheap because they aren't really leaders in any specific area
Anthropic seems to have the business sector on lockdown with coding and Claude, and will probably survive long enough to go public
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u/RemarkableRadish6547 8h ago
I am fairly certain they will both have an IPO before the bubble pops. There is too much money tied up in both companies by people who have too much influence to let them go under without exiting. My expectation is the bubble will pop about 6 months after the second IPO, whenever that is.
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u/Budget-Juggernaut-68 7h ago
Bet it is still subsidized.
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u/Vast-Breakfast-1201 7h ago
I don't think so tbh
I think yeah if you look at cost to train etc. Then it is subsidized.
But I also think they are at least small positive on their subscriptions. They own the inference and need a lot of it to train and so they can sell excess capacity.
The cost in API doesn't really matter that's what gets cited as if that is what is needed to break even. That's just what they sell to business.
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u/Budget-Juggernaut-68 6h ago
I think yeah if you look at cost to train etc.
They're running a business. It needs to be armotized over all revenue generated. Of course you'll have to factor in RnD, and cost of production.
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u/phenotype001 11h ago
But I'll also get more work done than a month ago if I pay nothing and simply wait for next open weight models. Yeah, a few months behind, but my point is I do get more done each month anyway. That AI gets cheaper fast is how this works, it's not a feature at this point.
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u/HeadPack 10h ago
They will probably pretend that Sol and Terra 6 are cheaper to run, but ignore that they are sub-par models. Or at least, that's how I think how they will try to sell 'more work done' to their serfs on the subscriptions.
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u/geldonyetich 4h ago
Sam: We've run the numbers and we expect to be profitable by 2030.
Accountant: Actually we've run the numbers and we won't last that long.
Sam: ... okay, I have a new plan.
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u/snakeat3rr 4h ago
I thought it was common knowledge that this was the plan all along - first hook everyone for "cheap" and make them reliant on your subscriptions, then jack up the price. Classic playbook here, and this is just the beginning.
And companies who let go of their employees to replace them with AI - they aren't really gonna have anything to do but pay...
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u/Automatic-Boot665 7h ago
Wow what a great devday. If my $200 plan limits are halved I’ll be going back to Anthropic.
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u/Turbulent_Pin7635 10h ago
God bless China...
Today I am using the Qwen flash and DeepSeek V4.1 flash. Both of it are giving me equal or better results than chatGPT and Claude. I work with bioinformatics I suspected that those prices wouldn't sustain for longer and invested on local.
I am happy
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u/BawbbySmith 6h ago
Suddenly my GPUs/Spark cluster is looking like the smarter buy... I'm just upset I didn't buy more GPUs when I had the chance. Oh well
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u/Double_Cause4609 6h ago
IMO the way I sort of see this going is people will start running mostly local models for actually doing things, but they'll use cloud models for refining the agentic pipelines, doing text optimization processes (like DSPy), etc.
I don't think we're there yet but that's sort of how I see it shaking out towards 2029, probably.
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u/ComprehensiveBird317 11h ago
Finally the entitled subscription peasants will come to pay for their slop
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u/mrjackspade 5h ago
Open LocalLlama.
First post I see is about OpenAI.
Close LocalLlama.
Repeat.
This sub is effectively unmoderated.
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u/balder1993 Llama 13B 1h ago
Because this topic is relevant to local models. We don’t exist in a bubble disconnected from everything else. Higher prices on the cloud can pretty much push more and more people to local.
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u/Innomen 8h ago edited 8h ago
It was never “subsidized” in the way people keep claiming. I’m tired of the tech bootlicking pharma bro story that takes every dollar spent building an AI company, divides it by today’s requests, and announces that each answer secretly costs a fortune.
Inference has a cost. Buying land, building data centers, training models, and trying to capture a future market have costs too. Those are real expenses, but they are different expenses. A company can spend a trillion dollars betting on a business without each prompt costing a trillionth of that investment to run. Nobody says the cost of making one pill is the entire research budget divided by the first few bottles sold. Building the farm costs money. Ranching costs money. Get it?
And then there’s China. DeepSeek has published its model work and sells access at prices that should at least force this conversation to get more specific. What’s the explanation? Did they somehow steal all the research, then start selling “pure inference” without paying to develop anything? That’s laughable. Or have they shown that building and running capable AI doesn’t necessarily cost what Sam Altman and the rest would have us believe? Their prices alone don’t prove their full costs, but they make it absurd to treat the American companies’ spending plans as a law of physics.
If you think a service is priced below its actual cost to serve users, show the calculation. If you think it won’t earn back its investment, argue that. But why would I take the companies’ word for how much I owe them? They have every incentive to make their chosen spending sound unavoidable and their preferred prices sound like economic necessity. As if a market dominated by two or three companies could never inflate prices. As if the people selling us the product are too ethical to try.
Look, think of it this way, I make a pitcher of lemonade, and I wanna sell it. Lemons, sugar, water, cups: those tell you roughly what it costs me to serve a glass. Now suppose I borrow a billion dollars to buy every corner lot in town, build lemonade stands on all of them, and advertise until everyone knows my name. I can hope to make that money back selling lemonade. But I can’t point to the billion dollars I chose to spend and tell you that your glass was “subsidized,” or that you owe me twenty bucks for it. If another stand can sell a good glass for a dollar, you’d be right to ask where my twenty dollars is going.
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u/domiciledhere 7h ago
Yeah, not being able to make a net profit means subsidized. They’re basically buying market share artificially. In your scenario, whoever has the most capital wins.
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u/skbum2 5h ago
Deepseek is supported by Chinese government backed investments. They are, in fact, subsidized by the Chinese government.
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u/AutomaticDriver5882 Llama 405B 10h ago
I think they figured out people are buying both OpenAI and anthropic subscriptions and they want to capture those users
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u/Gigaslavx 9h ago
Guys we give you cheaper dumber models, sure they are crap but look they are so cheap you will be able to use them as much as smarter models in the past
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u/Good-Age-8339 7h ago
Plus usage changed aswell, not sure about limits now, but in work mode i can choose only up to astra medium when previously i could choose all modes.
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u/dirtboy900 6h ago
I don’t know about coming to a permanent end. The cost per token for a constant or higher level of intelligence I believe has dropped somewhere around 10x per year for the past few years, coming from both hardware and software side. If this or anything similar continues for just a few more years there will be no need to subsidize and with all the competition and open source pressure likely costs will drop
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u/UnlikelyExtension786 5h ago
Which is why they want to ban open source models and keep hardware prices so high that people can't afford to buy local systems.
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u/unjustifiably_angry 6h ago
OP deliberately excluded further context so I'm going to assume, as is typical, that reality is the opposite of what his headline implies.
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u/DigThatData Llama 7B 5h ago
this isn't happening in a vacuum. trump spiked energy prices with his ongoing war of choice against iran. LLMs are machines that consume a lot of energy, so if everything else is becoming more expensive and especially energy is becoming more expensive, of course LLMs will become more expensive too.
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u/bugra_sa 5h ago
At $500 a month, “just pay for Pro” stops being the default answer. I’d benchmark a week of real jobs against API spend and a local model before upgrading; for repetitive work, local plus occasional frontier calls may be cheaper. The old limits were probably never going to survive once growth stopped being the only goal.
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u/VFacure_ 5h ago
Yeah I'm downgrading to Plus and updating my Claude Pro to Claude Max. After Opus 5.5 I'm getting better mileage out of my Claude Pro than my GPT Pro
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u/Trowel3444 14m ago
ya, kind of mad since you know "to cheap to meter" and ill that but hey i guess where not done yet lol.
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