[jsnell]

Their spending is not a problem. It's quite low for a top-tier hard tech company that's also running a consumer service with 500M active users. They are making a loss because 95% of their users are on free accounts, and for now they're choosing not to monetize those users in any way (e.g. ads).

[raydev]

sama tweeted that the $200 tier was priced too low to cover costs a few months ago.

[FergusArgyll]

At that price level you run into serious adverse selection

[sireat]

Meaning someone paying $200 monthly is going to use it as much as possible to get their money's worth.

I slightly disagree.

My hypothesis would be that the distribution for $200 users would be bimodal.

That is there would be a one concentration of super heavy power users.

The second concentration would be of people who want the "best AI" but are not power users and feel that most expensive -> the best.

Their actual usage would be just like normal free tier of ChatGPT.

[aswegs8]

How credible are his PR statements, though?

[raydev]

You think "we're losing money on this subscription tier" is good PR for their investors?

[wredcoll]

"This car is priced so low we're practically giving it away!"

[rolandog]

But are you owning something with a subscription in a market that has normalized hiking their prices?

There used to be contracts with service providers, and that — IIRC — usually shielded consumers from exorbitant increases.