[256BitChris]

GitHub doesn't have access to its own models so it has to pay the prices of the model it uses.

People confuse price with cost all the time. The price of Opus has dropped from $75/1M output tokens to $25. That's the price. The cost is much lower and according to Dario, about a month ago, they had about a 73% margin.

I don't understand how anyone would use GitHub copilot...it's basically running a custom harness and using close to API pricing for Opus. This is why Microsoft is cooked in this game.

But yeah, I don't understand why people switch from subscription to API prices for Claude. They're way higher, but again that's price and not necessarily the cost to Anthropic to serve.

[vmbm]

For the longest time Copilot was the best deal in town. For $10 a month you would get ~1300 requests. A single prompt was counted as a request, and it didn't matter how many tokens were used or how many loops the agent did. It was a spectacular deal. Of course, now that they are moving to API based billing the plan is a not really a deal at all. The monthly plan is essentially pre-paying for API credits, which are use it or lose it and they are not discounted in any way.

And FYI, most enterprise accounts were forced to switch to a hybrid monthly seat license plus API based usage earlier this year. So that is why we are probably seeing so much alarm over Ai bills at the enterprise level. Companies went whole hog on agentic workflows not fully appreciating the costs structures of their new plans. Didn't help that pretty much every VC and board was probably breathing down their neck that if they didn't jump on the AI bandwagon they would get left behind.

[riffraff]

> according to Dario, about a month ago, they had about a 73% margin.

Do you have a source for this? I missed this and it does not match my impression.

[SatvikBeri]

Not OP, but Dario said on Dwarkesh's podcast 3 months ago that their gross margins are "significantly higher than 50%"