> Lab executives insist that serving tokens is profitable.

Maybe marginally profitable, but right now they need to give out subsidies for people to use their products (Antigravity, Codex, Claude Code et al) in an actually useful manner that prevents churn and at the scale they need to justify usage growth forecasts, which they need to keep the wheel turning.

Probably if you look at the users who exclusively use the simple chat box interfaces (i.e. ChatGPT, Gemini in UI, Claude in UI) plans it is actually profitable, but I'd also say that's not where most of the usage comes from.

I'd love to actually look at both usage + profitability from each user segment to see if their PxQ growth expectations from non-enterprise usage make any sense.

> Many independent providers price tokens of open-weight models at a fraction of Anthropic's prices.

Are those open-weight models as good as Anthropic? Are they the same parameter class?

> Are those open-weight models as good as Anthropic? Are they the same parameter class?

Are they as good as Anthropic was one year ago? That's more like it. They don't have to be just as good, they just need to be the most worthwhile for the price. If frontier models are only providing a negligible advantage for what they charge, that absolutely matters.

It's a loss leader but this is normal. Same has happened with Uber, Airbnb, Amazon, etc. Using VC money to buy marketshare and once you have it, you can milk it.

The question is more around the moats that these companies have and it seems to me while their models are amazing technology, they don't really have a moat. The open/chinese models still continuously catch up to the american ones.