alt Hacker News> it may underestimate the inference margins of Ant/OAI's API pricing.
If true then why are neither Anthropic or OpenAI dropping their API pricing to gain market share when both are clearly doing all sorts of political and PR maneuvering to compete in a cutthroat market?
Since they aren't dropping the API usage prices (and are in fact raising them in a lot of subtle ways) then one of these options almost has to be true: they are still subsidizing inference, training costs are so ridiculously high that they need to make huge profits off inference or collapse in on themselves, or they are price fixing.
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The training costs are very likely the reason. Dario has talked about how each individual model is profitable, but how the expenditure training the next generation of models makes it look like they're not profitable at any given moment in time, and I believe he's being honest about that.
The market for open weight model hosting gives you an idea of the profitable price floor, it's pretty clear there's markup baked into OAI/Anthropic's APIs.
If true then why are neither Anthropic or OpenAI dropping their API pricing
They are? In the before times of 2025, Opus 4.1 was $75 per million tokens. Opus 4.8 is $25, and Fable is/was $50.
Company-wide their margins are trash (probably negative). They need as much inference margin as they can get to afford the massive training runs. It is likely that we'll see GPT-5.6 reduce API pricing to compete against Anthropic, but whether Anthropic feels they need to reduce their prices is anyone's guess.