alt Hacker NewsIt should be obvious that these services are operating at a loss. The monthly subscriptions especially, but I’m even skeptical that the linear API pricing is sustainable.
It feels like a classic “drug dealer” model to me. Get everyone hooked with cheap access, then raise prices later. Unless there’s a major breakthrough in the underlying technology, I don’t see how a significant price increase isn’t inevitable once adoption is locked in.
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Did people learn nothing from the rise, stall, and now fall of social networks?
Yes, AI can do some incredible things. But we’re also running full speed into an ecosystem controlled by 2 or 3 major companies. Running at a loss. A reality check is coming.
It’s not a technology problem. It’s an economic problem. People are too busy looking at the tech to notice.
This seems unlikely while we have open weights models available that are ~as decent as the frontier ones.
Given the API prices for open weights models of similar size are 5-10x less than the frontier models the APIs are very profitable on a pure unit economics approach. I strongly suspect they make money off their monthly plans as well.