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.

> If you assume API demand is unlimited

Doing a lot of heavy lifting here. Not everyone on a subscription plan would convert to a 200USD/mo API consumer.

No but demand comes from a lot of sources beyond vibe coders.

True, but you need to run the optimisation function to calculate at what X does the increased revenue at lower margin from Pro Max subscribers outweigh the reduced revenue at higher margin for API consumers, and adjust your pricing to approach X.

I'm sure that Anthropic have some very smart folks on that right now.

Opportunity costs are real. In many cases they are more real than 'actual costs'. However, I otherwise agree with you.

> Are Anthropic currently unable to sell subscriptions because they don’t have capacity?

Absolutely! Im currently paying $170 to google to use Opus in antigravity without limit in full agent mode, because I tried Anthropic $20 subscription and busted my limit within a single prompt. Im not gonna pay them $200 only to find out I hit the limit after 20 or even 50 prompts.

And after 2 more months my price is going to double to over $300, and I still have no intention of even trying the 20x Max plan, if its really just 20x more prompts than Pro.

This has a absolutely nothing to do with whether they're limited by available compute...

I don't think that logically follows.

They have a business model and are trying to capture more revenue, fully saturating your computer isn't obviously a good business strategy.

If anything, you are confirming that $170 covers heavy Opus use profitably for the provider.

Opportunity cost is not the same thing as actual cost. They might have made more money if they were capable of selling the API instead of CC, but I would never tell my company to use CC all the time if I didn’t have a personal subscription.

You’re looking through the wrong end of the telescope. An investor is buying opportunity and it is a real cost to them.

Still makes no sense as they’d lose revenue, data, and scale if they don’t subsidize.

> If 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.

I think it's the other way around? Sparse use of GPU farms should be the more expensive thing. Full saturation means that we can exploit batching effects throughout.

If they have spare capacity then there is no opportunity cost to selling $100 subscriptions for exactly that reason. If they don’t have spare capacity then, at the margin, they could replace a subscription user with API calls that make them $5000: that’s opportunity cost.

If you own equity in Anthropic you should care about that cost. Maybe you are willing to tolerate it to win market share, but for you to make the most profit you need that cost to shrink.

You know who also loves to use the term "opportunity cost"?

The entertainment industry. They still tell you about how much money they're leaving on the table because people pirate stuff.

What would happen in reality for entertainment is people would "consume" far less "content".

And what would happen in reality for Anthropic is people would start asking themselves if the unpredictability is worth the price. Or at best switch to pay as you go and use the API far less.

Don’t give them any ideas, please! I need my 100 USD subscription with generous Opus usage!

Google's Antigravity has Opus access, and I suspect it's subsidised.

I prefer car analogies

> The argument in this article is like comparing the cost of a Rolex to a random brand of mechanical watch on gear count

I mean... rolex is overpriced brand whose cost to consumers is mainly just marketting in itself. Its production cost is nowhere close to selling price and looking at gears is fair way of evaluating that

Not directly. But if production cost is above selling price, you typically tend to get less production. And if production cost is (way) below selling price, that tends to invite competition.