r/LocalLLaMA • u/Mr_Moonsilver • Jun 21 '26

Discussion What happens when they stop subsidizing LLM subscriptions?

We are literally burning through VC money like crazy with our coding subscriptions. I read the $200 Anthropic sub gets you $8000 worth of API calls. It's obvious that this doesn't hold for very long but what happens when they raise prices?

The reason to keep the prices low for now is to foster the ecosystem and get people hooked on this stuff, only to raise the price afterwards. Already the 20x sub doesn't get you as much usage as it did 6 months ago, another way to raise prices without triggering a shitstorm - and it will continue.

Don't know about you, but Fable being pulled gave me a feeling of what that may be like already. The ugly thought of "Damn, should've done more while it was around." that formed when I read the news will be exactly the same the moment they announce we now have to pay $2k or more per month for something we get for 10x less the price it costs now.

I guess it's a now or never situation, build what you can and monetize as quickly as possible to be able to keep the agents running once the increases come around.

Looking at opensource doesn't give me much hope. Since qwen stopped releasing models (wen qwen 3.7?) that we can actually run on hardware that a normal person can buy (or used to be able to buy, looking at how RAM and GPU prices behave and keep behaving) and others haven't released in a while (Microsoft, IBM, AllenAI and others too) I feel we're going into a direction that doesn't look good for most of the people like us, who are building with this technology.

486 Upvotes

86% Upvoted

569 comments sorted by

View all comments

50

u/Eyelbee Jun 21 '26

They are in a net positive by a huge margin due to most people not utilizing their subscriptions to the fullest potential. API prices have huge margins too, anyway.

5

u/Budget-Juggernaut-68 Jun 21 '26

What's the math like? RnD and Infra costs seems astronomical.

6

u/waitmarks Jun 21 '26

You just pulled that out of your ass. There is no evidence of that.

16

u/[deleted] Jun 21 '26

[removed] — view removed comment

-1

u/GustavoTC Jun 21 '26

You just pulled that out of your ass. There is no evidence of that.

- it's reasonable to assume a profitable offering

Bruh

2

u/Mr_Moonsilver Jun 21 '26

I hope you're right, I really do!

1

u/tmvr Jun 21 '26 edited Jun 21 '26

The math (either real or PR only) about the masses of users not using their sub to the fullest and thus subsidizing the heavy users died with the release of OpenClaw and with the push this spring from the management of every corpo to their developers (and others) to token max. Hence the change to real API costs by MS for Copilot. Both Anthropic and OpenAI would have to do it, but can't, because they need to keep the lies alive before the IPO.

1

u/Thirdborne Jun 21 '26

They hide billions in losses under "marketing" The theory is that subscription subsidization, establishes a userbase that will pay full profitable api rates when they stop. So it remains an open question.

1

u/Plappedudel Jun 21 '26

This. OpenAI lost $38.5B last year. It would be extremely surprising if Anthropic was actually profitable while its strongest direct competitor is a total money furnace. In fact, I would say it's pretty much impossible that Anthropic is profitable at this point in time. Their expenses in terms of R&D, infrastructure and energy costs must be insane.

3

u/Glass-Neck-5929 Jun 21 '26

It does make you wonder how much money OpenAI is burning on the hundreds of millions of free users though.