Discussion

• @kimmonismus @kimmonismus on x

  Subscription plans are massively subsidized. And by massively, I mean absurdly: Claude Max 20x: $200/month, with usage reportedly worth around $8,000 ChatGPT Pro 20x: $200/month, with usage reportedly worth around $14,000 [image]

• @tenobrus @tenobrus on x

  @scaling01 nah people have done this analysis in the past . i don't think public discussion of it matters much to the labs, the main thing is that they retain freedom to adjust limits as they desire plus that average usage in fact remains low (see all the non-interactive claude c…

• @garymarcus Gary Marcus on x

  IMHO, nothing about OpenAI is sustainable. They are surviving on hype. Even with a big subsidy they are still losing market share, and they have completely lost whatever technical advantage they once had. They are spending too much money on public opinion (lobbyists,

• @kunchenguid Kun Chen on x

  been on both anthropic and openai's subscriptions for a while and this aligns very well with my real experience - you get a lot more value from openai's plans right now and this analysis hasn't even taken into account that gpt 5.5 get the same thing done with much less tokens

• @amasad Amjad Masad on x

  @scaling01 The rug pull is coming... sooner or later.

• @daniel_mac8 Dan McAteer on x

  SemiAnalysis quantified token-maxxing. Claude Max: $200/mo gets you $8,000 in tokens. ChatGPT Pro: $200/mo gets you $14,000 in tokens. Doubt that will last much longer. [image]

• @usr_bin_roygbiv Roy on x

  Hot take: They're not subsidized their margins are insane. They are just absolutely raping api customers. Anyone who has used deepseek or hosted anything and done the math on hardware/power costs knows this

• @semianalysis_ @semianalysis_ on x

  The margin on a subscription plan is a function of the average utilization. If we assume both companies have 75% API gross margins, this results in the following subscription margins. (3/4) [image]

• @daniellefong Danielle Fong on x

  at current pricing a max20x is subsidizing a whole employee worth of spend ime

• @teortaxestex @teortaxestex on x

  API is overpriced vs subscriptions by 40-70x Do you know what this means? They have DeepSeek-level compute efficiency if not better. Which makes perfect sense (tbh still too good for DS), given frontier budgets for overtraining, autoresearch, larger and older staff etc.

• @edzitron Ed Zitron on x

  Still laughing at this. Even if you believe that OpenAI/Anthropic have 75% margins on tokens, all it takes for the margins to go negative on any of their subscriptions is for a user to use 25% of their rate limit. In any other context we'd be calling these people losers!

• @kimmonismus @kimmonismus on x

  Read these two facts together. Because there's something important to learn from it. Anthropic just told investors it's on track for its first profitable quarter, with revenue more than doubling to ~$10.9B. OpenAI is projected to burn well into the double-digit billions this [ima…

• @teortaxestex @teortaxestex on x

  obviously, maximally utilized subscriptions are negative. but I think the negative margin isn't that dramatic anymore (because it's too easy to max out with agents now). I'd say current subscriptions must be profitable up to ≈35% utilization. https://x.com/...

• @scaling01 @scaling01 on x

  OpenAI subs being roughly 2x Anthropic subs checks out [image]

• @sonalibasak Sonali Basak on x

  Gravity exists on Earth apparently https://www.wsj.com/... [image]

• @garymarcus Gary Marcus on x

  🚨 OpenAI pondering big price cuts, per WSJ scoop: [image]

• @scaling01 @scaling01 on x

  honestly fuck semianalysis for this now they are going to kill limits

• @paweljlisowski Paweł J Lisowski on x

  @kimmonismus You could say that, but at same time API prices are likely significantly inflated and many users of sub plans probably not using it all too. In the end the math is working out for these companies. And doubt it will change much in future, at least regarding models of …

• @edzitron Ed Zitron on x

  Hell yeah dude hahahahaha hahahahha selling 14 grand for $200 a month. Masterful gambit Mr. Altman! Very good stuff!!!

• @anuragsingh_as Anurag Singh on x

  If this price war escalates, this probably will be the reality check AI needs. The spending needs a ROI & fast. Expect a blowback on chip stocks. OpenAI Considers Drastic Price Cuts, Anticipating War for Users With Anthropic https://www.wsj.com/...

• @dee_bosa Deirdre Bosa on x

  Wow. My takeaway is that OpenAI is subsidizing power users at almost 2x Anthropic's rate This can't be sustainable

• @itsandrewgao Andrew Gao on x

  This is in line with my understanding. Subsidization is a lot more intense than most people think. AI is extremely expensive. Will be a big shocker when Anthropic and OpenAI stop subsidizing. One engineer can easily spend $100k of tokens/year

• @semianalysis_ @semianalysis_ on x

  Obviously this is way worse than API overall. However, explicitly nerfing subscriptions leads to huge public backlash, and the rapidly falling cost of intelligence means you'll be able to profitably serve Opus 4.8 level models for $20/month in the near future. We therefore think

• @edzitron Ed Zitron on x

  Both OpenAI and Anthropic are considering price cuts. Neither of these companies but ESPECIALLY OpenAI can under any circumstances afford this pay cut. This is fundamentally insane. A sign of desperation that will erode revenue while costs stay linear. https://www.wsj.com/... [im…