> This idea that the subscriptions are subsidized is repeated over and over, but I've never seen any proof of this. It seems to be entirely based on the inferred API cost the subscription usage could give you, but there are a lot of assumptions needed for that to follow.

My claude code environment shows me cost per token used in that session, according to API costs. It regularly exceeds $200. I pay $200 a month for my claude subscription. That's fairly obviously subsidised, unless you genuinely believe their unit costs are 100x less than what they're charging.

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LUmBULtERA 9 hours ago | parent | next [-]

The API inference cost to customers is not the actual cost of providing inference, and the cost of providing API inference need not be the cost of providing subscriber inference.

	▲	brandensilva 5 hours ago \| parent [-]
		This is correct, they are subsidized but it's the training cost that costs the most with a majority of people hitting cache for most queries for inference.

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qtk8 10 hours ago | parent | prev | next [-]

But they also determine the token prices. What you describe could also be true if they take a 5x profit margin on api tokens and 2x margin on subscriptions.

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Eddy_Viscosity2 8 hours ago | parent | prev | next [-]

You're being shown the price, not the cost.

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hparadiz 10 hours ago | parent | prev [-]

That's what they want to charge you. Not the actual cost. The actual cost is a gpu that's probably already paid off and about $2 of electricity

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t-writescode 10 hours ago | parent [-]

Most prices, like GPUs, are amortized over several years, when doing the calculus. Maybe they're already paid off, maybe they aren't. I would lean toward "aren't".

	▲	hparadiz 9 hours ago \| parent [-]
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