[Certhas]

My impression is that individual subscriptions are the loss leading hook. The money is made on Enterprise token contracts.

Employees and students used to coding with thousands of dollars worth of tokens (on a 20/100 dollar plan) will push enterprise to spend.

Having a Chinese model that is competitive won't displace this enterprise spend. But an open model hosted in the US/EU might.

The existence of GLM 5.2 puts a ceiling on how much OpenAI/Anthropic can charge for API Access.

[LUmBULtERA]

> My impression is that individual subscriptions are the loss leading hook

Except there is no evidence of this at all, just people comparing API and subscription pricing. The leaked financial info for OpenAI shows inference is profitable right now, though it does not show a distinction between subscription and API revenue... but if subscription revenue was so lossy, it would hard for total inference to still be profitable.

[CuriouslyC]

Anthropic has indicated in the past that API gross margins are ~60%. This might have improved since then, though competition from OAI puts a ceiling on that.

[LUmBULtERA]

Subscription inference can also be cheaper than the cost of API inference if the provider wants it to -- providers can do flexible scheduling for subscription inference for example, around API inference, to lower its cost and get better utilization of the hardware.

[Certhas]

I did clearly say "my impression is". And you have no evidence to the contrary. We don't even reliably in w how many subscribers Vs enterprise customers they have. And the OpenAI leak doesn't even cleanly say that inference is profitable from what I can tell... The better evidence that it probably is are the prices charged by open weight model providers.

[LUmBULtERA]

Fair enough, there is not strong specific evidence to the contrary except about overall inference being profitable for OpenAI (as well as the open weight model providers hosted throughout the world).

[fbnszb]

> The existence of GLM 5.2 puts a ceiling on how much OpenAI/Anthropic can charge for API Access.

I believe this is the reason why we can even have this debate. Without this kind of competition we would not have these subsidies.

[pietz]

To be clear, I agree with this and they have my unlimited support pushing for relevance of open source models. GLM 5.2 is amazing and I couldn't be more excited.

I just think that as of today, most people will not find a good reason to switch to GLM.