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Comment by pdyc | Hacker News Reader

afaik, enterprise plans are not subsidized. its 20$/seat+api pricing. Unless you are saying api pricing itself is subsidized.

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This 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.

None of what you said is true

And you know this how?

Burden of proof is on you

Assuming 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)

For 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.

It's mostly R&D though, not inference. If LLM's effectively become a commodity then they are screwed anyway.

Aren’t the Chinese labs quickly turning them into a commodity?

The 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)

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