I'm paying for the heavily-discounted subscriptions, not the API rates. There isn't really a cost gap for me. DeepSeek doesn't have a subscription to compare to, but when I compared the GLM 5.3 usage I got from a $100/mo Z.ai subscription compared to Opus 5.5 on a $100/mo Claude subscription, there wasn't a big gap. And GLM 5.3 is very clearly not a frontier model (deepseek v4 seemed a lot
closer, but I didn't use it enough to really say for my workloads).
I don't think those subscriptions nave negative contribution margins, either. I think we're seeing a lot of price discrimination by the big labs, and huge margins on their frontier models. The fact that they have been cutting prices to their second-biggest tier of models (Opus/Sol).
Open models catching up and collapsing these margins would worry me if I were a shareholder in the big labs, but as a user, I really doubt that the western labs have bigger environmental impact just because they have higher API costs, I think they have a ton of efficiencies they aren't sharing with customers yet because demand is so high.
I don't think those subscriptions nave negative contribution margins, either. I think we're seeing a lot of price discrimination by the big labs, and huge margins on their frontier models. The fact that they have been cutting prices to their second-biggest tier of models (Opus/Sol).
Open models catching up and collapsing these margins would worry me if I were a shareholder in the big labs, but as a user, I really doubt that the western labs have bigger environmental impact just because they have higher API costs, I think they have a ton of efficiencies they aren't sharing with customers yet because demand is so high.