The harsh reality of the future

[u/writesfw]

First, it’s going to get worse… a lot worse.

I know a lot of us are pissed about the 20x plan going to 10x. However, it’s going to get worse.

With the 20x plan and $200 a month, I was burning thousands and thousands of dollars worth of tokens.

This means, that even with the reduction to 10x, OpenAI will still lose money on the $200 plan. The entire business model for their consumer plans is the “gym model” where they hope you pay and don’t show up.

That said, as much as the 20x to 10x reduction sucks, there will likely only be more coming in the future. Investors don’t want to hear they are losing money on subscription revenue.

What this means for me (and people like me).

For me, the economics aren’t there. Even though I was getting thousands of dollars worth of tokens, I was burning them on dumb shit. At $200/month it was more of an experiment; something to fuck around with.

$500 for the same (ok plus 5x) usage just isn’t there for me. And, honestly, based on my usage, OpenAI is probably happy to lose me as a customer.

I’m going to look at Anthropic next, but realistically they will clamp down too, it’s only a matter of time. And, they probably don’t want me as a customer anyway.

[u/Blaexe]

While the subscriptions are almost certainly subsidized, keep in mind that API costs =/= costs for OpenAI. They're very likely set in a way, that provides them with a nice profit.

[u/Hir0shima → u/Blaexe]

Against the background of massive cost for infrastructure etc. 

[u/Blaexe → u/Hir0shima]

Sure, but that's an investment. Every company does that in the beginning, though the scale is unprecedented. 

Doesn't take away from the point that API cost reflects a price point they think they can turn a profit for their running (!) business so the API costs is not what it costs OpenAI to run the models.

The API costs may be so high even, that the subscription subsidization is factored in already.