alt Hacker NewsThis is already happening. For new Anthropic enterprise accounts you are billed at api token prices (maybe with a small volume discount). Anthropic makes a profit on those tokens. (Sure, that profit does not cover the model training costs, but that’s a separate issue.) It’s the subscriptions for individuals (e.g. Claude Max) that are still subsidized below cost.
> I wonder if managers will be as excited about AI when the prices go up.
Companies are willing to pay the api pricing. Engineering time is very expensive and AI coding agents actually work now since December and are actually showing measurable productivity gains, finally. It’s a good deal to make (obviously, with caveats: you need to make sure your tokens are going on productive tasks that will actually grow revenue) and anyone who penny-pinches is making a strategic mistake.
Replies
> Sure, that profit does not cover the model training costs, but that’s a separate issue.
I don't think it is. At some point they have to make money and they can't do that if the token cost doesn't include ALL the costs. Someone has to pay for that at some point. And someone has to pay for the subsidized subscribers. So no. API token prices don't reflect the real price. They are still subsidized. Just in a different way.
> Anthropic makes a profit on those tokens
Citation needed. Anthropic does not have public books
They may be for now. Problem is that when foundation model pricing goes up, you're paying not just the increase in tokens you consume directly, but also for all tokens you're consuming via vendors as well.
If your company has Figma, Github, and Cursor and they're using the same models you are, your monthly costs with them increase as well. You're exposed N times to the foundation model price increases, where N is the number of times software you directly or indirectly use talks to a frontier model.
"Engineering time is very expensive"
I always wondered about this statement, like we are generally salaried and there is so many variables that affect how I spend my "time". None of us are machines that can do X work per day and our managers get to slice it as they see fit. Pull a dev off a project they love and throw them onto something they hate and suddenly X is diminished greatly.
I would almost predict that reshaping our workflow to be: "prompt, wait, approve changes." results in losses because it is such a mentally tiring workflow and drills into our brains the desire for the LLM to "just fix it". It is the next level of just moving tickets to completed all day.