I think it’s pretty clear what the purpose of this stuff is: get people so invested into the Claude ecosystem with certs and “modernization kits”, so that when the subsidies end and subscription costs shoot up they feel they’re in too deep now to switch to something cheaper.
> so that when the subsidies end and subscription costs shoot up
Subscription costs are capped to API rates as their ceiling (and, realistically, way lower than that - why would you even subscribe if you could just go pay-what-you-use instead), and those are already at a big margin for Anthropic. What still costs them a fuckton of money comparatively is training, but that is only going to get more efficient with more purpose-built hardware on the way.
Basicallly, I don’t see much of a reason to hike subscription prices dramatically. I don’t think they’ll stay at $100/$200 but anyone who’s paying that already knows how much value they’re getting out of that and probably wouldn’t mind paying more.
I'm not sure what you mean, if you max out your subscription perhaps? If you pay $100 and don't use it, you don't get refunded $100 because it's 'capped to API rates' which would've been 0.
He means that anthropic cannot increase the price of the sub because the users can just switch to the regular API pricing which consequently puts a ceiling on the cost of the sub.
Nobody would use a $1k sub if using the API pricing would only cost $500 for comparative service.
For the record, I'm only explaining what he put forward.
I don't agree with the opinion, mainly for two reasons:
The API cost can be increased in conjunction, hence the ceiling is just as variable
The harness is even more important then the model ime, and Claude Code is getting better every month. Even though the alternatives are getting better too, they're at least currently significantly worse IME - I'd say at least 3-6 months behind (compounded by the model, ofc).
And as a third point, unrelated to the original argument: there is no way anthropic is actually treating the sub as a loss leader. It is not cheap. It's only cheap compared to their API pricing, which they can freely set however they want. Compare their pricing to free models like Kimi k2.5 etc. I sincerely doubt anthropics model costs more to run then theirs, and they're profitable at 30% of the price anthropic charges.
Now huge amount of investment pays for training. This investment expects some returns, to be able to both turn profit and continue the training, rates must be much, much higher.
> I think it’s pretty clear what the purpose of this stuff is: get people so invested into the Claude ecosystem with certs and “modernization kits”, so that when the subsidies end and subscription costs shoot up they feel they’re in too deep now to switch to something cheaper.
Do you have a source for that? Certainly things like compute and other services that I'm aware of are objectively cheaper, so I'm curious what has gone up.
That is the biggest threat - and likely where things will end up eventually… it’s when that “eventually” is and what the server based providers can pivot to in that time.
This will probably happen unless the industry conspires to roll back the availability of general computation so common people can only own computers with enough power to be glorified thin clients. The way this might look is good hardware never officially being banned, just priced too high for anybody to afford, and produced in small quantities to keep it that way while all production shifts to making massively expensive powerful hardware for corporate buyers.
Seems unlikely. We're already seeing specialized hardware optimized for LLM performance (taalas, groq, cerebras), and simple economies of scale result in these sorts of products being a better value when rented from a server vs purchased/managed/upgraded for the typical the user.
Frontier models will continue to be either exclusively available from servers or significantly more affordable from servers vs local alternatives for the foreseeable future.
