This is hotly debated and completely unclear. Let's say Anthropics Opus models cost the same to serve as GLM 5.2. GLM 5.2 is 4.4$/MTok while Opus is 5.6 times more expensive. Assume that GLM 5.2 is served at essentially zero margin. Then Anthropic has >80% margin on API pricing. So even if an average person with a subscription pays only 20% of the API price of their usage, Anthropic makes money on subscriptions.
replyAnd the real numbers could be better for Anthropic. It's feasible Opus models are actually cheaper to serve than GLM 5.2 because Anthropic have optimized the hell out of inference.
Sure, but then why wouldn’t I use GLM 5.2 at cost or K3?
replyI guess that’s the big question, will people pay a big margin long term to use their end products / models or will AI tokens be commoditized by many competing players. For coding if I had to pay API costs I’d switch in a heartbeat, enterprise maybe more reluctant?
Makes sense, subsidizing tokens doesn’t seem like a great strategy for a public company.
replyAnd Google alway has a target on its back for antitrust (regardless of claim validity)
replythey're subsidized if you max them out, i'd imagine most users are paying $20 for maybe $2-5 of tokens.
replyanthropic probably has more customers that use more of their sub, but for open ai where a lot of their subs are consumers through chatgpt.com, they have a lot of free money to work with there
Possibly, but aren't the tech giants positioned to win a war of attrition? Then again, they're more likely to sit on that cash and wait for the opportune time to buy a frontier lab.
replyThe subsidizing thing is repeated over and over without proof. Personally, I doubt they're actually subsidized.
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