> We understood (and knew for a long time) that the large AI labs are not monetarily profiting from subscription users that make heavy use of their subscription.

"profit" is a weird concept in the software business. it might be true that there is an opportunity cost to these users, either because they displace other potential users by using up capacity, or because they would be willing to pay more if forced. but I don't believe that anyone is losing money on inference costs on any of their plans.

> At some point they have to price their product fairly

they are competing in a market. if most of their costs were inference then this would be a good thing, because everyone would have roughly the same prices, so as long as they had the best model they would win. in fact model development costs eclipse the cost of inference, and is something that non frontier labs get for much cheaper by distilling from the frontier companies.

> They will have to compete on merit alone, and that is much less profitable.

that's not really true. google won search on merit alone, and were massively successful as a result. the trick is that everyone from the poorest shmuck to the richest businessman uses google, so they win through scale. in ai, google and openai are making a bet that they can do the same thing. there's only really room for one winner at this game, even two is stretching it, so anthropic has to win by being the smartest model that only high end businesses use. that's a very risky bet.