alt Hacker NewsThey're definitely not subsidizing API pricing, can't believe how prevalent that fallacy is on HN of all places. The question is how profitable Claude Code is. Your example 2 is real and major but your example 1 is ridiculous, almost any new model from any company is better at the same price, and how is increasing the price an example of decreasing prices??
BTW, Github Copilot is pricing Opus 4.7 at 2.5x the cost of Opus 4.6 at promotional pricing (so maybe it'll be 4-5x). But Github's request based pricing is insane, completely divorced from their actual costs (you can achieve 1+M tokens for $0.10 if you give it a large request), so I'd assume they're losing a lot of money.
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> can't believe how prevalent that fallacy is on HN of all places
AI is very emotional for a lot of people leading to bias takes in both directions. We like to think HN is more rational than average, but we’re all human.
They're definitely not subsidizing API pricing
The cost of a thing, is relative to its source costs. They are subsidizing API pricing, if you consider all the costs to provide the service, including all model creation, training, etc costs.
But that doesn't mean they will be more expensive, longer term. The cost of compute will go down as time goes on. Each year it will get cheaper. Same for power requirements, computing density, cooling, and so on.
I remember trying to store and play mp3 files on older computers. I could typically hold a few on a disk, and if I wasn't doing anything else I could play one. Barely. Now you'll be hard pressed to play an mp3 and see the load results in top or what not.
The same will be true of AI in 20 years.