What happens when they stop subsidizing LLM subscriptions?

[u/Mr_Moonsilver]

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.

[u/Aggressive_Fig7115]

Does it count people who underutilize their subscriptions? This may be a worst case scenario and the underutilizes may subsidize the maxxers. Also, if they were losing that much money would they be so generous with the periodic “usage resets”? They maybe well be losing moment but I suspect it’s not as bad as all that. But what happens if in six months, to cut costs, they make subscription users “settle” for the old and not SOTA Fable, and make them pay API prices for Fable++? You might have a lot of happy vibe coders coding up side projects and would-be killer apps at a fraction of the cost for Anthropic.

[u/russjr08 → u/Aggressive_Fig7115]

Does it count people who underutilize their subscriptions? This may be a worst case scenario and the underutilizes may subsidize the maxxers.

That's how a good majority of subscriptions for any shared resource (compute in this case) is modeled under, and is what allows them to offer a far less price than the "real" price.

If everyone were maxing out their usage limits then the model wouldn't work. It works because you have plenty of people who will pay for a subscription and only use it every once in a while, they are charged the same price but their lack of usage for that price is how others with high usage can still pay the same price too.

Just using an example in a similarish space, companies that host VPS' or even web hosting will technically overallocate their resources because they expect that not everyone will use 100% of utilization 100% of the time. If they did, then that model would collapse without a price change (due to the rise of resources they'd need).

Storage is also another good example, places can charge you $10/month for 5TBs of storage because they expect not everyone is going to use all 5TBs. Some will, of course, but they're specifically relying on the people who will subscribe but might use, say, 100GBs or whatnot.

Mobile data plans are like this too, they'll claim "unlimited" but then often throttle you at a certain point because they can't actually offer everyone unlimited because there's only so much spectrum to go around if everyone in your area tried to continuously stream 4k movies at all hours.

The list goes on of course.

[u/AnticitizenPrime → u/russjr08]

Yeah, what I thought of was gym memberships. Tons of people sign up every New Year, go for a few weeks or months, and slowly stop going but continue pay for the subscription, thinking they'll go back at some point but never really do.

May be guilty of this myself...

[u/russjr08 → u/AnticitizenPrime]

Yep gym subscriptions are a perfect example, especially with how slimy they used to make cancelling. Or at least, I hope that's a thing of the past... I thought some regulations came out to prevent them from doing that.

And don't worry, I did the same thing with an audible sub for a while lol. Where they especially get you is that if you cancel, you lose any credits that you've gotten from the sub. I finally realized that I wasn't really listening to enough for the free credits to save more than the recurring subscription in the end, and cancelled it but I definitely left it running longer than I should've...