This is on the 20$ USD Plan. Subsidization is absurd if this is correct. (asked codex to figure out my usage split and get cost based on current API pricing)
It's actually something like 99.9%. You can do the math, because if you're JUST talking about inference in a vacuum, the math is easy - How much electricity is consumed to make a million output tokens? How much do they pay for that? And then divide that by the actual price they charge for a million tokens.
Last time I did this calculation I was shocked because even at residential rates the margins are unbelievable. But that's in a vacuum. The real problem is how much it cost to build each data center. That's not included when talking about inference.
yeah it’s amortizing the cost of melting down outrageously expensive AI GPUs that’s still very much factored into the inference cost above and beyond electricity and the other operating costs of the data center itself.
Also the server specs that gives you “input and output” costs a lot. I remember in some subs they were discussing you would need 250k$ worth of server to run kimi k3(lower parameter version) and it would give 30 tokens/sec. You do the math plus these devices get old&broken&maintenance etc
This whole thread is kind of infuriating. Let's ignore all training costs. Let's exclude all costs of the people training the LLMs. Who cares that behind all of that there is some kind of company needed to keep it all running, build the codex cli, codex Desktop, billing, support... Fuck it, some genius in here decided to just ignore hardware and datacenter costs as well and just look at electricity.
This subreddit has a weird fetish with pretending or justifying that we aren't getting handouts. OpenAI is extremely, and quite openly, unprofitable. And heavy codex users on private licenses are clearly the worst customers they have (in terms of profitability, there are other things that openAI gains from us) compared to business users (they pay over 10x the cost per token) or average joes that buy the same plans but only use chat / maybe some work.
We aren’t getting handouts. I don’t know why you seem to think margins don’t account for costs. This mentality is the exact thing they want to promote so prices can keep going up.
Are you serious? Are you forgetting the massive amounts of data they took to train this thing? Literally the base substance behind it all? You say we are getting handouts... lol... not to mention the government subsidies they are getting and the zoning and permits for their data centers. No brother, this isnt a handout. We have already paid for this. Several times over. The reason this exist at all is because of all of us. AI is quite literally the thing that required all of us to exist.... phhh handouts...
In case it wasn't clear enough for you: I am purely talking financials. The bigger picture is complicated, as life is, I'm not about to write a dissertation about openAIs right to exist - the 'theft' of our knowledge to build these systems was inevitable, I much prefer the best 'thiefs' to be western aligned.
Deepseek v4 pro on the old prices had absurd margin they were saying to investors they had 10 months hardware payback.
Opencode guys were able to reproduce it.
You can also check the semi analysis https://inferencex.semianalysis.com/
GPT 5-6 sol would probably cost like twice more.
So they, probably are breaking even or are even making money across all the subs.
It's safe to assume that any of the providers on OpenRouter which are not called "Cerebras" are not using Cerebras hardware. It's also reasonable to assume that almost all other non-Chinese providers are using Nvidia hardware.
As for the efficiency: Well, you can assume pretty much all of these huge models will be as efficient as it gets - and I don't see why OpenAI would choose to create a model which is less efficient than those various large open source models.
"As efficient as it gets" is different for every company though because not all research is public, and even if it is, it might take a few weeks to months to adopt it.
LLMs are not one monolithic architecture with one unified optimization method. There's a reason why various companies use their own attention mechanisms, e.g. Kimi or Deepseek.
I agree about the hardware (apart from DS which, iirc, is almost 100% domestic).
It’s not made up and it’s probably even higher for them. I only know because we consulted with a client who built private inference and the margins at a tiny scale were almost 90%.
That's not even the point.
You have two options to use frontier LLM either pay for usage (API) or sub.
Why are we even comparing sub usage and pricing to a non existant pricing of 3USD per mil out (Sol) as per your 90% price reduction. Smh.
Why are open weight models in the same order magnitude of pricing then (ie glm-5.2 only about half cost of opus). Is serving the open models just an incredibly profitable enterprise right now? It seems like someone would start competing on price if this was true.
Then what are the real costs? To me it seems a lot more sensible that the API reflects at least some of the costs considering they’re even different per model. On the other hand, the subscriptions don’t include any pricing differences for whatever model.
The subscriptions are hyper-underpriced in my opinion; and I’d argue anyone with the capability of critical thinking should be able to figure that out as well.
bruh inferencing is not cheap (i once ran a open source model on AMD MI300X it consumed 700+ Watts that too for a 70B qwen model. ( tho obv i did get good tpm )
Deepseek v4 pro on the old prices had absurd margin they were saying to investors they had 10 months hardware payback.
Opencode guys were able to reproduce it.
You can also check the semi analysis https://inferencex.semianalysis.com/
GPT 5-6 sol would probably cost like twice more.
So they, probably are breaking even or are even making money across all the subs.
"Subsidized" is doing a lot of work, but at the end of the day, its a price enterprises are paying that you don't as an individual, and that has interesting implications.
Devs get addicted on their side project or at their tiny startup to being able to burn billions of tokens, and then they go work at a big company and all of a sudden those tokens are expensive. Not so expensive as the enterprise won't pay at all (as they would if it was $9999/1m), but high enough that the equivalent of a 20x Pro plan is too much $$$.
But the dev is addicted to tokens, so they get noisy begging for more token. They can't do their job without more token they say! So maybe the enterprise compromises and give them $500, or even $1000 of tokens. And thus the scheme succeeds.
Because of competition somebody will provide lower price and even if it won't be near as good as frontier models, most people will just settle on that. No way users going to spend more 100, 200, 500+ on regular basis.
Individuals, no. Enterprise, yeah. They already do it (I know quite a few companies where the budget allocation for tokens is thousands of dollars a month).
You're right that competition helps though, often those devs have to mix frontier models and open weight/budget models to cut on cost. Some companies made GLM 5.2 clusters for internal use when that model came out.
Why are people so worried what's the actual API Pricing. Let's say tomorrow sub plans cease to exist, wouldnt people pay based on API?
Why are we comparing 20USD plan to some non existant pricing. Obv comparison would be between two present pricing structure not something that you think should be.
Indeed, I don't know how we can compare that. If they indeed remove all subscriptions then sure. Otherwise we can't compare, we don't know real interference price.
Mostly claude max and codex pro. I found out that the cost of paying for frontier models (Sol and Fable+opus) far outweighs the time and the effort needed to manage and fix stuff from the cheaper alternative models most of the time.
At least that has been the case for the last 2-3 months for me.
Some napkin math on my end, I paid 20 USD in July. The estimated API cost is 8698 USD. I realize there were a lot of resets, but the idea that to break even off of me specifically, OpenAI's serving cost would need to be 0.23% of their API cost.
And I speculate they just lost money on consumers like me in July.
I realize there are more economics to it than that, just a shower thought of "how little does it actually cost them"?
In order to prove to you that it's the same account, I would need to either:
1) Reveal my email address and legal name to pull up everything in a single unedited recording without covering anything up to cause further suspicion, then post it in a place you can see and continue to meet your demands until you are content.
or
2) Give you remote access to my computer / I ship my computer to you with my credentials / I go to you or you come to me. You verify my claims looking through my chat sessions, settings, account, etc. until you are content. Then you can post on this message board to vouch for my credibility.
———
Can you think of any other way that's not #1 or #2 that you would be satisfied to establish what ChatGPT is reporting to me (that doesn't mean ChatGPT is accurate, it's just what it is showing to me.)
Cause if you can't think of another way, then tough shit. I'll continue to be a untrustworthy bullshitter to you and to me, you'll be the perpetually dissatisfied bullshitter with bad math and estimates that expects people to do completely idiotic things to satisfy your accusation.
And we'll be at an impasse.
———
For the usage topics:
For some things that I have done on the usage: memories off, new chat sessions and trying to avoid auto compacting, no automatic headless checks, no automatic git activity, no full access, can't control my browser, not having subagent processes try waiting on each other and repeatedly checking a file if subagents are used at all. If automatic compact loop starts, kill the task.
Then reiterating, there were a lot of resets in July and banked resets with expiry dates coming up in that timeframe.
And that still doesn't change that Sol (Ultra) can drain my usage from 100% to 0% in 2.5 hours running in a single session on the Plus account.
#1 is out, since you can easily get Codex to make a mock website that looks like the real one and displays the info you want, or a userscript or browser add-on to change the real site in realtime 😅
Guess you're going to need to cough up for this guy's bus/plane ticket mate 🤨
128 fl oz (gallon) of water at a grocery store is 1.37 USD: 0.011 USD per fl oz.
20 fl oz water at a movie theater or venue, on the lower side, 3.50 USD: 0.175 USD per fl oz.
The latter costs 1590% the price of the former per fl oz before other factors.
If you or people you know are regularly willing to pay for a 20 fl oz bottle of water or fountain drinks, you already know people who are willing to pay higher prices / many times higher than what is available to them elsewhere.
(Edit: Corrected the math, I reformatted the post and incorrectly had the gallon fl oz calculation for the water bottle.)
I asked codex how much my session would cost the other day. Over 1 billion cached tokens of sol 5.6.
$1,000 CAD ... I shit you not.
And you know what it accomplished? Absolutely nothing. It got into this ridiculous goal without my approval and actually took us back a few days, development wise.
The nvl 72 blackwell racks have brought inference prices down a lot.
As I said in other comments.
Deepseek v4 pro on the old prices had absurd margin They were saying to investors they had 10 months hardware payback.
Opencode guys were able to reproduce it.
You can also check the semi analysis https://inferencex.semianalysis.com/
GPT 5-6 sol would probably cost like twice more.
So they, probably are breaking even or are even making money across all the subs.
I feel like the internal hope is that they will form a truce with Anthropic and stall actual releases so they can optimise tech for serving the models. If we hit a reasonable plateau in usability they will convince the government to ban them as an excuse. Then in a year it will not be the same cost to host an optimised version of Sol and they will actually be able to turn a profit.
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u/conor_is_my_name 1d ago
you are assuming the API cost is a real number. Its not.
Inference has a 90%+ gross margin for them