Ok but so it does cost Cursor $5k per power-Cursor user?? Still seems pretty rough..
No, to use $5k in Cursor you have to pay $5k.
Oh. Nice! That works out.
No, it doesn't cost Anthropic $5k per Claude Code user
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Re: No, it doesn't cost Anthropic $5k per Claude Code user
#252There's a huge difference between cost of inference and profit margin of the "big" providers, and the cost of inference for cloud-hosted open-weights. It's the same as R&D cost of the pharmaceutical industry, versus cost of producing generic drugs. One is massively expensive, the other is cheap.
That said, for inference, the margins for OpenAI were estimated at 70% [1] [2], and the margins for Anthropic were estimated between 90% and 40% [3] [4], last year. They will not be profitable for years.
[1] https://phemex.com/news/article/openais-ai-profit-margin-cli... [2] https://www.saastr.com/have-ai-gross-margins-really-turned-t... [3] https://www.theinformation.com/articles/anthropic-projects-7... [4] https://www.investing.com/news/stock-market-news/anthropic-t...
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#253Earlier quoted context omitted.
The article is about compute cost though. By "lose money on inference" I mean the assertion that inference has negative gross margins which a lot of people truly believe. This is important because it's common to reason from this that LLM's are uneconomical and a ticking time bomb where prices will have to be jacked up several orders of magnitude just to cover the compute used for the tokens.
But there's no such thing as compute cost in the abstract. What exactly is compute cost for AI? Does it include: • Inference used for training? Modern training pipelines aren't just gradient descent, there's a ton of inference used in them too. • Gradient descent itself? • The CPUs and disks storing and managing the datasets? • The web servers? • The people paid to swap out failed components at the dc? Let's say you…
Gross margins and cost of revenue are well defined accounting terms that apply to any type of business.
> Does it include:
> Inference used for training? Modern training pipelines aren't just gradient descent, there's a ton of inference used in them too.
No because this is training and not inference. Just like how R&D costs for a drug aren't part of COGS either.
> Gradient descent itself?
No
> The CPUs and disks storing and managing the datasets?
Yes
> The web servers?
Yes
> The people paid to swap out failed components at the dc?
Yes to the extent they are swapping for inference and not training. If the same employees do both then the accountants will estimate what percent of their time is dedicated to each and adjust their cost accordingly.
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#254The compute cost debate misses a subtler point: the real cost multiplier isn't inference, it's context length. Most agent frameworks naively stuff 6-8k tokens into every prompt turn. If you route intelligently and compress memory hierarchically, you can bring that down to 200-400 tokens per turn with no quality loss. The model cost then becomes almost irrelevant.
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#255Earlier quoted context omitted.
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Omg, I can't believe that's real I wanted to believe that you're essentially trolling, but no - that service exist. And not an upstart, there is coverage going back several years. Our societies are seriously fucked.
I haven't tried any of these products, but I do have a senior dog with very severe separation anxiety. She barks and destroys stuff the minute I step out the door until the minute I come back. I could keep her from destroying stuff with a crate, but the neighbors would still throw a fit about the barking.
Effectively, this means that I have to hire a dog sitter every time I leave the house without her, just like an infant. If dog tv could fix this problem for me it would create an enormous amount of economic value.
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#256Earlier quoted context omitted.
> I don't buy the 10x efficiency thing: they are just lagging behind the performance of current SOTA models. They perform much worse than the current models while also costing much less - exactly what I would expect. Define "much worse". +--------------------------------------+-------------+-----------+------------------+ | Benchmark | Claude Opus | DeepSeek | DeepSeek vs Opus | +-------------------------------------…
Everyone who's used Opus knows it's better than the others in a way that isn't captured by the benchmarks. I would describe it as taste. Lots of models get really close on benchmarks, but benchmarks only tell us how good they are at solving a defined problem. Opus is far better at solving ill-defined ones.
At this point it's frankly not a fair comparison since DeepSeek 3.2 is now many months old and we're waiting for a newer model which has been rumoured as "any day now" since February. (We'll see).
GLM5, the largest Qwen 3.5 model, and Kimi K2.5 are more fair comparisons, though they are, yes, a bit behind. They're more than capable for routine operations though.
Anyways, I'm back to using Opus & Claude Code after a month on Codex/GPT5.3 and 5.4 and it's frankly a rather obvious downgrade. Anthropic is behind OpenAI at this point on coding models, and there's nothing to say they couldn't fall behind the Chinese models as well.
The moat is very shallow. After the events of the last two weeks there's likely a significant % of international capital very interested in breaching it. I know I would like to see this... Anthropic basically said F U to any non-Americans, and OpenAI is ... yeah.
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#257Earlier quoted context omitted.
Alternate theory... a few months into the LLMism phenomenon, people are starting to copy the LLM writing style without realizing it :(
This happens to non-native English speakers a lot (like me). My style of writing is heavily influenced by everything I read. And since I also do research using LLMs, I'll probably sound more and more as an AI as well, just by reading its responses constantly. I just don't know what's supposed to be natural writing anymore. It's not in the books, disappears from the internet, what's left? Some old blogs for now maybe.
Books definitely have natural writing, read more fiction! I recommend Children of Time by Adrian Tchaikovsky
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#258If Anthropic's compute is fully saturated then the Claude code power users do represent an opportunity cost to Anthropic much closer to $5,000 then $500. Anthropic's models may be similar in parameter size to model's on open router, but none of the others are in the headlines nearly as much (especially recently) so the comparison is extremely flawed. The argument in this article is like comparing the cost of a Rolex…
But opportunity cost is not actual cost. “If everyone just kept paying but used our service less we would be more profitable” is true, but not in any meaningful way. Are Anthropic currently unable to sell subscriptions because they don’t have capacity?
The opportunity cost isn't selling subscriptions, the cost is the gap between what they could sell the GPU time for via their API vs what they're selling it for in a flat rate subscription. If you assume API demand is unlimited and GPU supply is fixed, then the opportunity cost is the 'real' loss of revenue that comes from redirecting supply away from customers willing to pay more to customers willing to pay less.
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#259A huge number of people are convinced that OpenAI and Anthropic are selling inference tokens at a loss despite the fact that there's no evidence this is true and a lot of evidence that it isn't. It's just become a meme uncritically regurgitated. This sloppy Forbes article has polluted the epistemic environment because now theres a source to point to as "evidence." So yes this post author's estimation isn't perfect bu…
I'd love to be a fly on the wall when this argument is tried in front of a bankruptcy court. It drives me nuts. Of course there's evidence that they're selling tokens at a loss. The only thing these companies sell are tokens. That's their entire output. OpenAI is trying to build an ad business but it must be quite small still relative to selling tokens because I've not yet seen a single ad on ChatGPT. It's not like t…
One very minor note; Anthropic and others, like most "enterprise" solution, also sell SSO + SCIM + audit logs. Their business plans have lower tokens and higher prices to cover the enterprise features, which should be essentially free to provide in 2026.
Re: No, it doesn't cost Anthropic $5k per Claude Code user
#260Earlier quoted context omitted.
But there's no such thing as compute cost in the abstract. What exactly is compute cost for AI? Does it include: • Inference used for training? Modern training pipelines aren't just gradient descent, there's a ton of inference used in them too. • Gradient descent itself? • The CPUs and disks storing and managing the datasets? • The web servers? • The people paid to swap out failed components at the dc? Let's say you…
Gross margins and cost of revenue are well defined accounting terms that apply to any type of business. > Does it include: > Inference used for training? Modern training pipelines aren't just gradient descent, there's a ton of inference used in them too. No because this is training and not inference. Just like how R&D costs for a drug aren't part of COGS either. > Gradient descent itself? No > The CPUs and disks stor…
We weren't talking about COGS, we were talking about "cost of compute", which isn't an accounting term.
For the rest, anyone can define and apply an accounting metric but that doesn't mean it tells you anything useful. If you look at the unit cost of any typical IP business it's nearly zero. Yet, many companies lose money on making movies, video games, apps and books.