They're definitely not subsidizing API pricing, can't believe how prevalent that fallacy is on HN of all places. The question is how profitable Claude Code is. Your example 2 is real and major but your example 1 is ridiculous, almost any new model from any company is better at the same price, and how is increasing the price an example of decreasing prices??

BTW, Github Copilot is pricing Opus 4.7 at 2.5x the cost of Opus 4.6 at promotional pricing (so maybe it'll be 4-5x). But Github's request based pricing is insane, completely divorced from their actual costs (you can achieve 1+M tokens for $0.10 if you give it a large request), so I'd assume they're losing a lot of money.