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points by soundworlds 1 day ago | 0 comments
I've been using the $32/month (AUD) subscription, but finally dipped into extra credits to get a task over the line yesterday after I hit my 5-hr limit.

And my god, $15 of extra credits ended up giving me only 30 minutes of Claude Code before running out.

The subscription prices can not be financially sustainable. There is no way that is remotely close to the actual cost of running.

[–] jonas21 1 day ago
The other way of looking at this is that all the customers paying API rates are giving Anthropic way more than the cost of serving their traffic. They reported an 85% gross margin in their S-1, so this clearly seems to be the case.
[–] justsid 1 day ago
Okay but even with a 85% margin the true cost for 30 minutes of usage would be $2.25. At that cost $34 should last only 7.5 hours. I would imagine the average user uses more than that?
[–] csa 17 hours ago
I think you would guess wrong.

The median user is using AI as a search engine, meme creator, and/or chatbot… at best.

The additional cost created by the subset of programmers using subscriptions rather than tokens/api can easily be categorized as a marketing expense.

[–] solyin 17 hours ago
At best? Do you have any data you're basing that claim on, or are you just speculating based off of you projecting? AI maximalists would have you believe that people are using these things as therapists and having conversations with it that are more intimate than any lovers'. AI minimalists would have you believe that no one is using these thing except at gunpoint, and even then. Unless you have some reason for us to believe you that isn't just "trust me bro", your portrayl of the median user is as suspect as any other.
[–] csa 16 hours ago
> At best?

Remember that I referred to median user here.

> Do you have any data you're basing that claim on, or are you just speculating based off of you projecting?

Anecdata? I guess it depends on what you count as “data”.

I am currently training a lot of people directly or indirectly (train the trainer type of stuff) on how to use AI professionally. I always start with “what do you currently use AI for?”. The answers I listed above are largely the categories that people have told me and the folks I train, with the exceptions being a handful of non-technical folks who have leaned into AI and have used agents and/or created apps of some sort.

To add some categories that I didn’t initially mention, some folks also use AI for drafting/writing documents and for creating meeting transcripts.

> AI maximalists would have you believe that people are using these things as therapists and having conversations with it that are more intimate than any lovers'.

Chatbot… this is something I hear, but I’m guessing I don’t hear all of the examples since it’s personal rather than professional. But some folks certainly say something like “I treat AI like a non-judgmental friend that I can ask personal questions to”.

> AI minimalists would have you believe that no one is using these thing except at gunpoint, and even then.

In my experience, this is almost exclusively the domain of old/older people who are happy to let tech pass them by and young people who are virtue signaling to their peers (or at least trying to).

> Unless you have some reason for us to believe you that isn't just "trust me bro", your portrayl of the median user is as suspect as any other.

It seems like you’re new to HN. I understand your skepticism. There is a relatively high density of actual professionals here. Trust me on that, bro.

My data set numbers are in the 100s, and it is not a statistically representative cross-section of the US or world market. That said, I’m guessing that I have a fairly good range of data points for the US market.

[–] solyin 4 hours ago
Thank you for thoughtful reply! I don't hold any Anthropic stock so this isn't material for me. I don't want to mislead you, this isn't my first account here, my favorite HN moment is when cpercival was called out on the Putnam and he fkn delivered. My old identity was too easily tied back to my real world persona, which felt dangerous in this day and age. Plus I wrote a book and needed a pen name.

> some folks certainly say something like “I treat AI like a non-judgmental friend that I can ask personal questions to”.

is why I believe that these things are stickier than I think you believe. I'm obviously biased by my own personal usage of AI and where I live and my own bubble which isn't the same as your bubble. Thank you for the context of your dataset. It's larger and more professional than mine. Mine is not professional at all and definitely a bubble of whom I happen to run into at a non-random selection of events.

We'll have to see what the stock market decides.

[–] albedoa 13 hours ago
I'm surprised by your skepticism, but anyway, it is your burden to bring data to the table that counters the overwhelming majority understanding here.

> or are you just speculating based off of you projecting?

This is also a strange thing to say. Why would you assume speculation or jump to projection as the basis for it? Nothing in the comment that you are replying to hints at projection.

[–] Tanjreeve 1 day ago
API is definitely holding things up. But they excluded the training from those profit calculations. There's a ton of wordplay indulged online about how that's capex etc etc. But without the training they don't have the thing to run inference on so it's very fitting with the pattern of being evasive with finances.
[–] phi0 20 hours ago
You’re confusing two figures. Before their S-1 filing, they reported being “profitable” to their investors when excluding training and stock based comp.

In the S-1 filing Q3 was profitable even with training included, if you exclude stock based compensation.

Q2 was profitable on all operating costs (incl. hardware, employees, training, inference). They were not profitable on non operating costs though. That’s partially interest, but mostly, when their valuation goes up, they’ll have to issue more stock (absolute value) to early investors after IPO. (so, them going up in value is a loss, as the shares they’ll owe will be worth more)

Their profitability will likely crator as they start building their own data centres after the IPO, so that’s the best results they’ll have in a while.

[–] Tanjreeve 18 hours ago
You see how the history of small print to everything they release to the media creates the accusations of running on misleading press releases?
[–] VulgarExigency 1 day ago
Deepseek claim they are earning 38 dollars per GPU hour on inference. If you compare Deepseek Flash's off-peak pricing with Sonnet at API rates, Deepseek is 16x cheaper per 1M output tokens, and 13x to 33x cheaper for input, depending on whether or not it's a cache hit. Inference is very profitable.
[–] F7F7F7 1 day ago
There are moments where I have a 2 hour , 4 instances in separate Kitty/Ghost windows , Opus 5.5 hammering away on each - and only see a 1% increase on my Max x20. Then there are other days where 10 minutes of a single xH Opus doing 1/10th of the work will kill 2%.

Anthropic is super opaque with what inference costs at any given moment on the subscription and cache is just super inconsistent.

[–] overfeed 1 day ago
I wouldn't be surprised if they have some implementation of demand-based surge-pricing
[–] csomar 20 hours ago
A Claude/OpenAI sub is still cheaper than DeepSeek API pricing though. Also, I suspect Claude and OpenAI models to be way larger (probably in the 2-3T range) than that of Deep Seek.
[–] etempleton 1 day ago
Again, if you ignore training.

That is like saying selling hamburgers is profitable if you exclude the cost of beef.

[–] throwthrowuknow 1 day ago
Not the same. You could, and many will argue we already have, strong enough models that you wouldn’t need an upgrade. Web development is already there. The competition to train better models is about capturing more market share now.
[–] etempleton 1 day ago
Okay, I will play along. Anthropic stops training new models tomorrow. They start turning a profit. Yay! Except wait, they still have 450 billion in commits that cannot be cancelled and another 300 billion that apparently they can cancel under certain scenarios. But maybe that all magically goes away somehow; I don't know, Coreweave is feeling generous because they are doing so well, probably not, but this is the fantasy so I digress. So they have this really great product that people want and they can just sit back and make money. Except no one else is going to stop training. And not only that some random Chinese company you have never heard of is distilling their model and is going to come out with a clone version that is 99 percent as good in one year. And on top of that, every 6 months one of the big 5 competitors comes out with a new model that is better. Anthropic can't keep charging the same price so they lower their price and lower their price until they are back to break even. Now they have an inferior product and are not competitive anymore. There is no moat.

If under the scenario you outline where they don't need to upgrade then AI is commoditized and margins are razor thin. And that is fine. Great even! But it doesn't justify Anthropic's trillion+ dollar valuation.

[–] throwthrowuknow 19 hours ago
“The competition to train better models is about capturing more market share now.“
[–] etempleton 16 hours ago
Where is the moat? There is no cost of switching. Anyone or any company can bounce between AI with minimal cost of switching. So unless they find a way to keep users beyond, “our model is the best” user acquisition isn’t going to matter a whole lot.
[–] pestatije 1 day ago
No. Beef is electricity... you'd have to consider warehousing or indeed staff training, as training
[–] jmathai 1 day ago
You are probably better off upgrading to Max for one month. I’ve done that a few times.
[–] jxeyrl 1 day ago
or a second subscription
[–] coolandsmartrr 1 day ago
How would you sync context between two or more subscriptions?
[–] shepherdjerred 1 day ago
"context" is just JSONL files on your machine. afaik these are not in any way bound to a subscription, so you'd just need to logout, login to the new account, and run /resume
[–] jmathai 1 day ago
All context is stored in the repository. I start each task with empty context (/clear). I consider this to be the equivalent of "reproducible builds" for coding agents.
[–] treyp 23 hours ago
Use a layer on top of it like T3 Code that can handle this for you
[–] panarky 1 day ago
> no way that is remotely close to the actual cost

Anthropic is running 85% gross margins on inference.

[–] mcmcmc 1 day ago
Yeah, on the API, not subscriptions. Those are a loss leader
[–] Tuna-Fish 1 day ago
No, inference as whole, including all the subscriptions.

The API Gross margin is even higher.

[–] mcmcmc 1 day ago
Fair. Perhaps it would be better to say a fully utilized subscription is a loss leader
[–] Tuna-Fish 17 hours ago
It's not clear at all that subscription was ever a loss leader.

The purpose of the high API prices is, in addition to trying to get more money, to anchor the high price, and then make the subscriptions seem like a great deal. But inference is just not that expensive, not when provided at scale and with huge batches.

You can see this with the various Chinese providers doing inference on open models, which are unlikely to cost less to run than the models at the frontier AI labs. A single 8-GPU GB300 cluster doing high-throughput batch inference on Kimi K3.1 Pro, which is the largest open weights model available, can do something like 300 000 tokens per second, that is, 10T tokens per year. That cluster, with current insane inflated prices, costs something like $1M to buy, and $50k to run per year in electricity. At $10/Mtok, that pays itself back in 4 days. Do you think that that's a reasonable price?

The subscriptions were probably priced with reasonable positive margins.

The huge expenses are in training and pushing the models forwards, with the gigantic RLAIF runs we know they are doing. Then once you got the model, you can scale up inference at low cost and want to serve as many people as possible.

[–] goalieca 1 day ago
Less development and operating costs
[–] iLoveOncall 1 day ago
Yeah and soon we'll discover it's because they calculate the cost of inference as near 0 because they use AWS / NVidia / etc. credits that they got "for free" (aka investments from those companies) instead of paying for them, or some other accounting bullshit.

You wanna know the real price? It's easy, just check what AWS, GCP or Azure charge for tokens.

[–] manyatoms 1 day ago
OpenRouter gives you easier to verify cost analysis of generic inference, as you can know the model weight size and so on, and see how competing providers price that
[–] nsoam 1 day ago
Because, like with other subscriptions, most people don’t use even half of it.
[–] fy20 22 hours ago
We recently switched from paying API prices via Cursor to a Claude subscription. Before we'd be averaging $100-$300 per day, now we have the €90/mo subscription and I haven't even reached the 5h limit yet.

My guess is a mixture of both... There's a reason why enterprise customers have to use API based billing.

(We also had a stint of using Grok 4.7 and that was the same price for our usage. Opus 5.5 seemed smarter though. After taking into account caching both average around $0.60 per 1M tokens)

[–] singpolyma3 1 day ago
OTOH less than $10 gets me more DS4.1 than I can use in a month.
[–] matteoraso 1 day ago
You might not be representative of the average user. Usually with subscription-based services, you have a minority of hyperusers that the company loses money on and a large majority who only use their subscription occasionally.
[–] xur17 1 day ago
> And my god, $15 of extra credits ended up giving me only 30 minutes of Claude Code before running out.

I've been running into the same thing, and adding separate OpenAI seats for employees rather than paying obscene overages to Anthropic. Thankfully Opus has decreased usage quite a bit, and made this less of an issue as well.

[–] TedDoesntTalk 1 day ago
Opus 5.5 is incredibly verbose compared to GPT 6.1. I mean substantially. They are both great generating the code I need. But I wonder how much more this extra vebosity costs me with Opus.
[–] akersten 1 day ago
> The subscription prices can not be financially sustainable. There is no way that is remotely close to the actual cost of running.

It's completely unclear to me why this is the conclusion everyone jumps to instead of "holy cow they are milking it on API pricing."

I mean, have you ever run a local model? How much electricity did it cost you to get 1,000 tokens out of it? Like a fairy-dust of a cent?

The AI labs' cost is CapEx. Marginal cost of tokens is zero.

[–] sausagefeet 23 hours ago
How much electricity do you think a few DGX Sparks consume?
[–] jeef_berky 1 day ago
I found this to be a shocking experience as well. Compare the 20x (now ultra 10x or whatever) plan running with 90% cache hit vs some extra credits you put on top. It's pissing in the wind.
[–] KellyCriterion 1 day ago
Be careful!

They lure you in to do "automatic top up", which gets quite expensive if you dont watch it :-)

[–] fxwin 1 day ago
> The subscription prices can not be financially sustainable. There is no way that is remotely close to the actual cost of running.

Welcome to... any subscription system ever? If every person with a gym subscription actually went there say three times a week, or every person living in a dorm paying flat rate for electricity started mining bitcoin 24/7, these systems would collapse. That doesn't mean it's not sustainable, it just is how subscription pricing works, by having some people use its offers a ton and others barely at all

[–] Tanjreeve 1 day ago
This metaphor gets repeated a lot for some reason but using a gym subscription has an upper bound. If one subscription could be using 10000 different machines at the same time their model would be entirely different.
[–] fxwin 19 hours ago
CC has an upper bound too, and one that is much more reasonably reached in regular usage (as opposed to gym visits)
[–] Tanjreeve 18 hours ago
Absolutely. And those limits + changes to them piss off a lot of users. There's a rock of they need to show adoption + usage while having to put limits on everything that pisses off users.

And there's a hard place that everyone freaks out at API prices and on-demand Opex models outside of a niche (I use API for personal research for quite focused queries and slightly more reassurance on being the customer and not the product) but this is very competitive + not sticky.

[–] matkoniecz 1 day ago
Claude also has higher bound. Once it proposed running 16 concurrent subagents and it went through 5h limit (and substantial part of weekly) in minutes.

Overall it would go through weekly usage within 40 minutes, if not for 5h session limit.

Running on 10000 computers will just hit all the limits at once.

[–] ms_menardi 1 day ago
because "building things with claude-code" isn't the product they're selling, not really.

they're setting a precedent that artificial intelligence should be free, or at least at-cost (free from profit), but robot labor (API usage) should not. I am all in favor of this dynamic. They built / maintain the robots, so they profit from their labors.

[–] tayo42 1 day ago
I think every comment is talking about their 20 dollar plan. Enterprise pricing is 20/seat+ api use prices. That pricing is all that matters, the personal use tier is probably tiny
[–] zeroCalories 1 day ago
Don't worry, I've probably sent Claude 5 messages on my personal sub the past month, so I got you covered.
[–] enraged_camel 1 day ago
>> The subscription prices can not be financially sustainable.

Even if they are a loss leader, they serve a valuable purpose: people who get used to using AI a lot via the subscription then lobby their companies to start using it. IMHO this is one of the reasons Anthropic was able to make major headway into enterprise.