There is a narrative that subscriptions are subsidized. Perhaps we should consider that API users are being price gouged?
FCFF = EBIT(1-t) - Reinvestment.
This is how the operating assets are valued via intrinsic valuation.
Could they generate immense earnings and cash flows net of reinvestment? Sure. DO I believe so? Nope. They've got way too out infront ahead of their skies about where this technology belongs and operates best.
Many people have reported that their use would be drastically more expensive with the API. None have (afaict) reported how much the average subscription is used.
Both OAI and Anthropic tried to time their pricing to look good heading into an IPO window.
They got screwed as China has kept up. Wonder how they're gonna overcome this problem - protectionism? Maybe.
Very impressive growth for sure (they doubled in around a month?), but we don’t know the ratio of paying seats
You're projecting your preference for these products onto a hugely fragmented group of people.