There’s also examples where this didn’t work. Moviepass for example.
Taxis were an established profitable business model and the uber subsidisation wasn’t anywhere near as much as AI subsidies.
[−]isubkhankulov · 2026-10-11 Sun 03:26 UTC ·
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Disagree with your second paragraph. Uber/lyft subsidized into deep negative margin territory around ~2015 or so. Anthropic (and OpenAI) are subsidizing but not losing money on these consumer plans.
The claim is that uber and lyft lost money on each ride but that openai and anthropic make money on inference. Just not enough to pay the cost of developing the models. The difference is that uber and lyft had to change their pricing (or payment) models to make money, where anthropic or openai could just sell enough inference (at some level of sales).
[−]isubkhankulov · 2026-10-11 Sun 07:53 UTC ·
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to clarify, I mean that the big model companies are charging consumers much less than equivalent API pricing but they're not actually losing money so its more of a steep at-cost discount for inference. It likely does not fully cover amortized R&D just like the other reply stated but it does still cover marginal inference cost (GPU/power/etc)
Uber and Lyft were paying drivers $X but charging users way less than $X so they were literally burning investor money to get market share.
> It likely does not fully cover amortized R&D just like the other reply stated but it does still cover marginal inference cost (GPU/power/etc)
Why does this point come up over and over again, pretending that you can truly separate training and inference costs. Yes, they are separate things but the value OpenAI and Anthropic are presenting to the world is "we're the absolute best, no one else comes close." Well, to keep that up you can't just not train for extended periods of time. You have to keep that engine going non-stop when there's free Chinese models nipping at your heels. You can be profitable on "just inference" all you want but if training expenses dwarf that, you're not going to be profitable overall, and that's the bottom line.
> does still cover marginal inference cost
Simply comparing to the larger models on OpenRouter implies that the pure hosting costs (equipment + power + minimal overhead) still exceed plan pricing if we assume all users always use their full weekly allowance.
So my conclusion is that it only works because the majority of users doen't fully utilize their allowance. Last month I used almost nothing of my Claude 20x plan (did use Codex though).
Moviepass failed because they thought it's going to be like Gym membership - people buy and don't go, but guess what? People love going to movie theaters. On its own its not bad, see AMC Stubs, but AMC owns the theater, they sell you popcorn and soda. OpenAI an Anthropic is closer to AMC than Moviepass.
> Moviepass failed because they thought it's going to be like Gym membership - people buy and don't go, but guess what? People love going to movie theaters.
You think developers won't/don't stretch subscriptions to the absolute limit? The AI subscription model is like the gym model except a large percentage of the customers work out 24/7/365.
Taxis were an established profitable business model and the uber subsidisation wasn’t anywhere near as much as AI subsidies.
????
Uber and Lyft were paying drivers $X but charging users way less than $X so they were literally burning investor money to get market share.
Why does this point come up over and over again, pretending that you can truly separate training and inference costs. Yes, they are separate things but the value OpenAI and Anthropic are presenting to the world is "we're the absolute best, no one else comes close." Well, to keep that up you can't just not train for extended periods of time. You have to keep that engine going non-stop when there's free Chinese models nipping at your heels. You can be profitable on "just inference" all you want but if training expenses dwarf that, you're not going to be profitable overall, and that's the bottom line.
So my conclusion is that it only works because the majority of users doen't fully utilize their allowance. Last month I used almost nothing of my Claude 20x plan (did use Codex though).
You think developers won't/don't stretch subscriptions to the absolute limit? The AI subscription model is like the gym model except a large percentage of the customers work out 24/7/365.