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Comment by senordevnyc | Hacker News Reader

No, almost everyone has been in agreement that they’re subsidizing subscriptions, but there have literally been dozens (hundreds?) of threads on HN in the past 12 months with people vehemently arguing that API prices are subsidized.

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I think both can be true - they're losing money on the API and they're still charging too much. Which is really where the music stops for American AI investment. I also use K3 now and its perfectly capable for the development work I'm doing. I don't shed any tears for OpenAI or Anthropic.

API are not subsidized. We know this is true from the existence of independent inference providers (a lot of which are crypto companies that would otherwise just be mining if inference weren't actually profitable).

Those providers are VC-funded, they don’t have the leeway to pivot away from AI. I would be interested in some examples though.

I don't think the rando providers like Novita, Phala, AkashML, etc., which frequently provide discounts to compete for traffic, are VC-funded. They have to actually make money to stay afloat.

Any public company providing inference who’s claimed its profitability in a way they risk legal penalties if untrue?

(Makes sense to me, just curious about this additional piece.)

Certainly not everyone. I find it far more likely that both subscriptions and API pricing are profitable in their own right. The fact that some people get great value out of their subscription (just like some people get great value out of their car insurance) doesn't mean it's subsidized.

That’s a fair distinction. I think they are willing to subsidize individual subscriptions for people who maximize usage, but their overall subscription business may be profitable.

Anthropic are definitely profitable on my 20 eur subscription, as I have kids and no time.

And every one of them is wrong.

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