I believe they will last until they IPO, and not long after that. $200/mo plans are not good for their P&L when their users using $10000 worth api credits. That's -98% margin loss per user.
It's not a 98% margin loss if your users are unwilling to pay 50 times the cost that they were previously paying, and if they have other options like open source providers. The calculus isn't so simple because some portion of users would switch to API, and so it's about how many would continue using the service rather than leaving for a competitor.
I'm aware they need to recoup the enormous cost of training and data centers, but on a purely inference cost level I'm not convinced that the 200 dollar plans are unprofitable.
Are your thought patterns worth 9800 dollars a month?
What's the RoR on analyzing those thought patterns?
Especially considering not everyone is tokenmaxxing, and in most parts of the world people take leave and companies do not cut their subscriptions.
I suspect they are priced to have a lifetime average price/token amount that is roughly break-even, or maybe a slight loss leader.
> have seen Dario say in multiple interviews that they are profitable on inference, which maybe he was only meaning to refer to API usage, but that's not the impression I got.
I think he does mean API usage. Don't forget they can (and do) adjust the number of tokens you get on each plan at any time to adjust their margins on those.
That means he knows that is controllable, and it only the underlaying inference that defines the succes or otherwise of the company.
Exactly. I have the Claude $100/mo plan, and use it moderately for open source hobby stuff. I still haven't dipped my toes into the Fable pool, but I always use Opus 4.8 on xhigh, and I never hit my limits.
On the other hand, though, there have been times when I've looked at /usage for a long-running session (e.g., 7-10 days, after it's compacted a few times), and it showed I'd used ~$450 worth of tokens just for that session. So I'm clearly getting value for the money here when it comes to the subscription cost. But I still don't hit limits, so...