For those asking / pronouncing this has to be satire, perhaps. But not for long. AI is still not making a profit. So whatever it costs today at the growth-at-all-costs subsidized rate, think how much more expensive it will be when investors start insisting on profit after market consolidation*.
Because if you think there is a competitive barrier to entry for smartphones, operating systems, CPUs, and streaming services, you ain’t seen NOTHING yet
A Claude Max subscription is $200 a month, which is roughly $7 a day. I’m forced to use Claude Code at work, and I frequently run the /usage command out of morbid curiosity to see how many tokens in wasting. I’m not exactly a power user, but even with my bare-minimum usage I typically burn about $50 of tokens per day — so roughly 7 times that $7 a day figure.
And that’s just based on Anthropic’s official per-token pricing, which itself is almost certainly subsidized… so it’s likely I’m costing them something closer to $20-$30 for every $1 of revenue. And again, I’m only using it for the bare minimum. I know people with much higher usage than me.
Similar boat, lots of people on the loss-leading phase, ‘the first hit is free/cheap’ is in play and I know development organizations that are explicitly designing hard dependencies on hosted AI as the ‘foundation’ of their processes. They are going for mainframe-style lockin where customers are too scared to change when it gets too expensive.
I know one organization that at least is being more careful, their LLM usage is only based on whatever they can run indefinitely on-premise without sweating future traps around pricing changes.
For those asking / pronouncing this has to be satire, perhaps. But not for long. AI is still not making a profit. So whatever it costs today at the growth-at-all-costs subsidized rate, think how much more expensive it will be when investors start insisting on profit after market consolidation*.
Because if you think there is a competitive barrier to entry for smartphones, operating systems, CPUs, and streaming services, you ain’t seen NOTHING yet
They’re spending $3 per $1 of revenue. The price per token will rise dramatically.
I suspect it’s even worse than that.
A Claude Max subscription is $200 a month, which is roughly $7 a day. I’m forced to use Claude Code at work, and I frequently run the /usage command out of morbid curiosity to see how many tokens in wasting. I’m not exactly a power user, but even with my bare-minimum usage I typically burn about $50 of tokens per day — so roughly 7 times that $7 a day figure.
And that’s just based on Anthropic’s official per-token pricing, which itself is almost certainly subsidized… so it’s likely I’m costing them something closer to $20-$30 for every $1 of revenue. And again, I’m only using it for the bare minimum. I know people with much higher usage than me.
Similar boat, lots of people on the loss-leading phase, ‘the first hit is free/cheap’ is in play and I know development organizations that are explicitly designing hard dependencies on hosted AI as the ‘foundation’ of their processes. They are going for mainframe-style lockin where customers are too scared to change when it gets too expensive.
I know one organization that at least is being more careful, their LLM usage is only based on whatever they can run indefinitely on-premise without sweating future traps around pricing changes.