How do you know that it's subsidized?

I really dislike that term. It's stupid and supports a distorted narrative.

They arbitrarily decide 1M API tokens cost X, and any subscription where usage costs less than that is "subsidized". No it isn't. They may be profiting on subscriptions as well, or losing on full API costs as well, or anything in between, and that X is anyway more reflective of competition than their costs. For all we know they did a rand()%1000 to determine it in the first place.

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crote a day ago | parent | prev [-]

If it isn't subsidized, why aren't all those AI companies making huge amounts of profit? Instead they are rapidly burning through the billions, and the money must be going somewhere.

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karahime a day ago | parent [-]

Investing in R&D isn't the same thing as subsidizing something.

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Danox a day ago | parent [-]

Investing in R&D is fine. as long as you are turning a profit somewhere within your company that can support it. If you are not, eventually the end comes. In short, the bubble.

	▲	karahime a day ago \| parent [-]
		The problem with this view is that that isn't a "bubble". "Eventually" can support quite a while, especially when the investment is increasing revenue over time and the unit economics look good. The timeline point cuts both ways, and none of that is a subsidy.