[mike_hearn]

The opportunity cost isn't selling subscriptions, the cost is the gap between what they could sell the GPU time for via their API vs what they're selling it for in a flat rate subscription. If you assume API demand is unlimited and GPU supply is fixed, then the opportunity cost is the 'real' loss of revenue that comes from redirecting supply away from customers willing to pay more to customers willing to pay less.

[d1sxeyes]

> If you assume API demand is unlimited

Doing a lot of heavy lifting here. Not everyone on a subscription plan would convert to a 200USD/mo API consumer.

[mike_hearn]

No but demand comes from a lot of sources beyond vibe coders.

[d1sxeyes]

True, but you need to run the optimisation function to calculate at what X does the increased revenue at lower margin from Pro Max subscribers outweigh the reduced revenue at higher margin for API consumers, and adjust your pricing to approach X.

I'm sure that Anthropic have some very smart folks on that right now.