> A lot of the "common wisdom" was that subscriptions were heavily subsidized, but in actuality they're just not quite as outrageously profitable.
Both can be true! Assume that it costs you $10 to support inference of 1MM tokens, and you sell that for $100. So you have a 90% profit margin.
Now you also have flat rate subscriptions for $200/month, where you sell upto 100MM tokens. That costs you $1000, but you're selling it as a loss leader because that drives up demand, bottom up - for your product, which is good for long-term profitability specially when your investors are not yet sensitive to you burning cash.
I have multiple $500/mo OAI subs. Still cheaper than buying my own hardware for equivalent performance.
Both can be true! Assume that it costs you $10 to support inference of 1MM tokens, and you sell that for $100. So you have a 90% profit margin.
Now you also have flat rate subscriptions for $200/month, where you sell upto 100MM tokens. That costs you $1000, but you're selling it as a loss leader because that drives up demand, bottom up - for your product, which is good for long-term profitability specially when your investors are not yet sensitive to you burning cash.
I have multiple $500/mo OAI subs. Still cheaper than buying my own hardware for equivalent performance.