It's not unfair its how every business works. When your product is new or not yet good enough and you want people to try it you give them discounts, or if you want to drive traffic to your service you also do the same.

Even traditional businesses do this with coupons. Is it unfair that Costco sells chickens for under cost because it drives usage to them?

Companies like Uber did use massive funding and price subsidization to try and kill competition and then take a monopoly, but it is hard to assert that this is what google is doing now. And given that other competitors in the space, Anthropic are doing the exact same thing again its not as though they are alone.

Also they could be subsidizing it because they want that usage type as it helps them train models better.

Chatgpt and gpt4 were all ran at a loss and subsidized people just didn't know that. Almost all of the llm companies have been selling 1 dollar of llm compute for 50 cents as they valued the usage, training data, and users more than making profit now.

This next generation of MOE and other newly trained models. Like opus 4.6, Cursor Composer 1.5, gpt 5.3 codex, and many of the others have been the first models where these companies are actually profitably serving the tokens at the api cost.

This year has been the switch where ai companies are actually thinking of becoming profitable instead of just focusing on research and development.

> Essentially these are unfair business practices, product cross subsidization to ensure market dominance.

Offering a different discounted rate for a service, though their first-party platform is not an unfair business practice whatsoever, though. The bar isn't what you disagree with, or what you think their motives are without any substantial proof. They could even make a honest argument that they can aggressively key-value cache default prompts from their own software reducing inference costs.

>See also: Microsoft and a whole bunch of other companies.

What does that have to do with Google?

"PAYGO API access" vs "Monthly Tool Subscription" is just a matter of different unit economics; there's nothing particularly unusual or strange about the idea on its own, specific claims against Google notwithstanding.

Of course, Google is still in the wrong here for instantly nuking the account instead of just billing them for API usage instead (largely because an autoban or whatever easier, I'm sure).

There's nothing wrong or illegal with subsidizing products and that's not what Microsoft or others have gotten in trouble for doing. It's when they tie a strong monopolistic position (Windows) with bundling to prevent competition (Internet explorer). This is how Apple has operated with far tighter bundling and cross collateralization of their ecosystem without facing monopoly allegations. Google does not have a monopoly position in AI.

No, it's more like stuffing your pockets in all-you-can-eat buffet

Just because all you can eat buffet exists doesn't mean that the food is free or you can take away the food. The food exists in discounted rate only if you consider it unlimited food. For normal folks they make profit.

Claude code could possibly make profit because the average usage doesn't come close to exhausting the limits.

Its called economies of scale. When they server 200000 ai subscriptions they dont expect everyone to use the max. They expect some will use more and some will use less and at the end of the day it will even out. Thats how every service works that is for the masses. As soon as you want a guaranteed 1000 tokens you should pay for that.

So you are saying a company should never reinvest profits in the company to support another money losing business until it’s profitable?

Should Netflix for instance not invested money from renting DVDs to invest in a streaming service?

Apple not use the profits it was making from selling Apple //e’s to create the Mac?