The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
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Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#2This rumor is not demonstrably true. The subscription prices are competitive and for heavy users even cheap compared to API rates, but there is no evidence that they are structurally priced below cost.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#3So the choice becomes to either 1) Use the AI tools as much as you can before they increase prices/tighten usage or 2) Stop using them so you won't be compelled to pay more later when the price inevitably goes up/your regular plan gets downgraded?
I would think companies would set the usage low and increase it with capacity rather than subsidizing the power users and going into the red. Maybe my strategy wouldn't be aggressive enough to capture the market, which I'm sure the major AI companies are trying to do.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#4This rumor is not demonstrably true. The subscription prices are competitive and for heavy users even cheap compared to API rates, but there is no evidence that they are structurally priced below cost.
Are you including capex when you say "cost"? Or are you just looking at inference costs?
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#5This is true for a lot of subscriptions though: some people use 100% of their mobile plan data, some people use 10% – the price accounts for this.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#6This rumor is not demonstrably true. The subscription prices are competitive and for heavy users even cheap compared to API rates, but there is no evidence that they are structurally priced below cost.
Wait for the price fixing that will eventually come after the horse race. Just like internet, phone, tv, etc. The prices are universally increased in tandem.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#7This is not a credible presentation:
> If you paid for that usage through a standard API, those 10 billion tokens would cost you around $15,000 a year. That is the real unsubsidized price. No discounts, no incentives, just the raw compute costs.
The standard API pricing is not the raw compute cost. Making that claim in the first minute of the video discredits the entire thing.
(Here's the full MacWhisper transcript: https://gist.github.com/simonw/991dde81b95fa4436f46517c3c1a4... )
And yeah, if you work your way through the whole thing it's mostly breathless hype based around shaky premises.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#8This rumor is not demonstrably true. The subscription prices are competitive and for heavy users even cheap compared to API rates, but there is no evidence that they are structurally priced below cost.
Okay then provide a link to a Dropbox PDF or official documentation “demonstrating” the premise is “untrue” please. Or admit you’re blinded by faith. Or financially interested in the public believing in a hypothetical like your second sentence.
In short, citation needed or shens bruh.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#9This is true for a lot of subscriptions though: some people use 100% of their mobile plan data, some people use 10% – the price accounts for this.
Uhhh, at this order of magnitude? No way.
Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]
#10This rumor is not demonstrably true. The subscription prices are competitive and for heavy users even cheap compared to API rates, but there is no evidence that they are structurally priced below cost.
Are you including capex when you say "cost"? Or are you just looking at inference costs?
It doesn't make sense to include the capex cost to train a model in this kind of discussion, because that cost is fixed.
Consider a model that costs $100m to train.
If the vendor then prices it such that each inference token has a margin of 10% over the variable costs to serve (power + server costs), whether or not they cover their costs is based entirely on how many tokens they can sell.
If they sell less than $1bn of tokens, they lose money - the break even point is 10x100m = $1bn.
If they sell $10bn of tokens they make a ton of money.
This also means you can't credibly calculate how much of the fixed training expense is covered by your token spend, because until the model is retired and you can account for how much inference it ran you don't know what percentage of the training cost each sold token was responsible for.