There is no evidence that per-token inference prices (which is what Uber is setting a cap on) is subsidized.
replyThe evidence that per-token inference _is_ subsidized is (a) competition is a bloodbath (b) these companies are raising more money than any company has raised ever (c) a maybe-profitable quarter is maybe-coming for Anthropic after maybe-signing a compute deal with SpaceX that legitimizes both companies.
replyThe evidence that per-token inference _is not_ subsidized is... a quote or two from Dario and Sam Altman
AI companies have more expenses than inference.
replyyes, and theres no evidence that they arent (or can't) use profitable inference to subsidise those other expenses. Some companies will keep spending massively to train better models, and some other companies will not, and offer good api prices. Which will end up being used? That depends on whether the spending turns into better value models
reply> theres no evidence that they arent (or can't) use profitable inference to subsidise those other expenses
replyas far as we know there's no evidence that they can produce any profits at all
Is there any evidence that it's not?
replyThe fact that Anthropic models are offered at the same API pricing by not just themselves but AWS, Azure and Vertex despite Anthropic taking a major slice on licensing along with the cost an open weight 1T parameter model like K2.6 costs to run on any third-party provider, make it unlikely that API inference cost are subsidized by the labs.
replyOpenrouter? i.e. Even excluding Deep Seek inference for very large open models is way cheaper. Maybe these providers are not very profitable but its highly unlikely that they are losing $4 for every $1 they make since selling inference is their only product...
replyYes; they ban various uses of their subscriptions but say you can do whatever if you’re paying for the API without limits
replyThat's just market segmentation and them trying to maximize revenue it doesen't really say anything about their costs.
replyThat's not evidence. Very likely though, but the only evidence we get one way or another is when they IPO.
replyThis story isn't about those subscriptions - enterprise customers like Uber are paying the full API prices.
replyafaik, enterprise plans are not subsidized. its 20$/seat+api pricing. Unless you are saying api pricing itself is subsidized.
replyThis is market introductory pricing that hasn't factored in cost recovery. Most of it has been run on early investment with the assumption they will recover costs in the long run. The prices are subsidized across the board and they will need to go up signficantly to recover them.
replyAssuming this were accurate, then presumably the AI companies would be betting that inference costs come down before the bill is due - I don't see enterprises being willing to absorb another ~10x price increase for tokens (as they've just done going from subscription prices to per-token pricing)
replyFor claude shops this was a huge hit. But lets back this up. There are some companies that haven't even built a break-even model at this price because they are funded by investment. As soon as those investors lose patience the first dominos will fall. For those who have somewhat of a business model, will it survive a price increase? The bigger question is do the base model providers have enough runway and have a way to keep going as they need to recover costs.
replyIt's mostly R&D though, not inference. If LLM's effectively become a commodity then they are screwed anyway.
replyAren’t the Chinese labs quickly turning them into a commodity?
replyThe open-weight models will have a steady race to the bottom on inference costs just by dint of competition between providers. They aren’t at the frontier yet, but they are rapidly eating the flash market.
Yeah, that's not going to work if you can get e.g. 80% of value by using 10-20x or more cheaper open models. At some point it would just make sense for large companies to rent compute and deploy their version of DeepSeek or whatever (if they don't trust Chinese providers)
replyTrue but they will raise prices slowly so people will optimize their workflow so they aren't just throwing as much inference as fast as possible like the current state. Right now you should do everything you wanted to try out because it is cheap (as long as you don't become dependent ... the risk).
replyI understand current Codex $20 sub is worth about $480 GPT5 api credits.
replyWay more. Track with https://github.com/junhoyeo/tokscale
replyThe inference prices for very large open models would indicate that Antrophic's and OpenAI's margins are quite large.
replyIt's not. They recently forced enterprise customers onto API billing instead of the cheap consumer pricing. Now the pricing is brutal.
reply