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▲ r0b05 4 hours ago

You've spent that money at subsidized prices but would you spend 5x if subsidies stop?

▲0xbadcafebee 3 hours ago | parent [-]

"Subsidies" don't stop because it's not "a subsidy". It's a subscription service.

Like Netflix, Comcast, T-Mobile, etc, etc. There are millions of subscription services in the world. They all "subsidize" higher-usage users with plans for lower-usage users using a fixed price plan and rate limit. The profit comes from lots of users who don't hit their cap. The higher priced plans are actually more profitable.

This is called a tiered usage-based subscription business model.

▲LinXitoW 2 hours ago | parent [-]

That's how it's supposed to work. That's not necessarily how it does work, especially considering how hush hush and scammy all the AI companies are when it comes to posting real numbers.

They might also be in a Uber style subscription strategy. Make something super duper cheap, at great cost to yourself, so that you can grow a massive user base. Use that user base to get investments to keep burning money. Once you've got enough competitors out-priced long enough, jack up prices and enshittify like CRAZY to recoup the cost.