> 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.

You can rent the GPUs and everything needed to run the model. Opportunity cost is not a real cost here.

That's a tautology. People think chinese models are 10x more efficient because they're 10x cheaper, and then you use that to claim that they're 10x more efficient.

Opus isn't that expensive to host. Look at Amazon Bedrock's t/s numbers for Opus 4.5 vs other chinese models. They're around the same order of magnitude- which means that Opus has roughly the same amount of active params as the chinese models.

Also, you can select BF16 or Q8 providers on openrouter.

>It is not. It's a terrible comparison. Qwen, deepseek and other Chinese models are known for their 10x or even better efficiency compared to Anthropic's.

I find it a good comparison because it is a good baseline since we have zero insider knowledge of Anthropic. They give me an idea that a certain size of a model has a certain cost associated.

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. Current Qwen models perform as good as Sonnet 3 I think. 2 years later when Chinese models catchup with enough distillation attacks, they would be as good as Sonnet 4.6 and still be profitable.

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?

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

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.

> 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

> That being said not all users max out their plan,

These are not cell phone plans which the average joe takes, they are plans purchased with the explicit goal of software development.

I would guess that 99 out of every 100 plans are purchased with the explicit goal of maxing them out.

> [...] if I had to guess it's break even as the compute is most likely going idle otherwise.

Why would it go idle? It would go to their next best use. At least they could help with model training or let their researchers run experiments etc.

Recursive self improvement and Repetitive Strain Injury being the same initialism is really funny to me

Honest questions: have you never heard of a hyperbole before and are you on the spectum?

Yes, you could turn it around to say that using Anthropic models in Cursor, Copilot, Junie, etc. is 'subsidising' Claude Code users.

$5 = $5

but $5 that I amortize over 7 years might end up being $1.7 maybe if I don't rapidly combust (supply chain risk)

No, to use $5k in Cursor you have to pay $5k.

> 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.

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

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

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

You can use `npx ccusage` to check your local logs and see how much it would have cost through the API.

Ask Opus to figure out how much it would cost. Lol.

> Aren't they losing money on the retail API pricing, too?

No, they aren't, and probably neither is anyone else offering API pricing. And Anthropic's API margins may be higher than anyone else.

For example, DeepSeek released numbers showing that R1 was served at approximately "a cost profit margin of 545%" (meaning 82% of revenue is profit), see my comment https://news.ycombinator.com/item?id=46663852

I wonder how they are defining a power user. How many tokens, what could be the size the code base?

> production cost is nowhere close to selling price

When has production cost had anything to do with selling price?

Yeah that's a massive assumption they're making. I remember musk revealed Grok was multiple trillion parameters. I find it likely Opus is larger.

I'm sure Anthropic is making money off the API but I highly doubt it's 90% profit margins.

Even if it's larger, OpenRouter has DeepSeek v3.2 (685B/37B active) at $0.26/0.40 and Kimi K2.5 (1T/32B active) at $0.45/2.25 (mentioned in the post).

Also curious if any experts can weigh in on this. I would guess in the 1 trillion to 2 trillion range.

I can’t get past all the LLM-isms. Do people really not care about AI-slopifying their writing? It’s like learning about bad kerning, you see it everywhere.

Twitter.

Weird that they're all looking for outside money then

The $5k power user is the one that consistently uses all input and output tokens available under the Max subscription

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.

I’m not maxing them out… I have issues that I need to fix, features I need to develop, and I have things I want to learn.

When I have a feeling that these tools will speed me up, I use them.

My client pays for a couple of these tools in an enterprise deal, and I suspect most of us on the team work like that.

If my goal was to max out every tool my client pays, I’d be working 24hrs a day and see no sunlight ever.

I guess it’s like the all you can eat buffet. Everybody eats a lot, but if you eat so much that you throw up and get sick, you are special.

My employer bought me a Claude Max subscription. On heavy weeks I use 80% of the subscription. And among software engineers that I know, I'm a relatively heavy user.

Why? Because in my experience, the bottleneck is in shareholders approving new features, not my ability to dish out code.

goal? yeah. but in reality just timing it right (starting a session at 7-8am, to get 2 sessions in a workday, or even 3 if you can schedule something at 5am), i rarely hit limits.

if i hit the limit usually i'm not using it well and hunting around. if i'm using it right i'm basically gassed out trying to hit the limit to the max.

There’s absolutely no way that’s true.

In saas this is not true. Most saas is highly profitable or was i suppose because they knew that most of their customers would never max out their plans.

I mean, the very first paragraph of TFA is describing who is under that impression. Literally the first sentence:

> My LinkedIn and Twitter feeds are full of screenshots from the recent Forbes article on Cursor claiming that Anthropic's $200/month Claude Code Max plan can consume $5,000 in compute.

inference compute is vastly different versus training, also it has to stay hot in vram which probably takes up most of it. There is limited use for THAT much compute as well, they are running things like claude code compiler and even then they're scratching the surface of the amount of compute they have.

Training currently requires nvidia's latest and greatest for the best models (they also use google TPU's now which are also technically the latest and greatest? However, they're more of a dual purpose than anything afaik so that would be a correct assesment in that case)

Inference can run on a hot potato if you really put your mind to it

That's claiming that worst case, a subscriber _can_ use that much. It's possible that's wrong too, but in any case a lot of services are built on the assumption that the average user doesn't max out the plan.

So the article's title is obviously sensationalized.

I have no problem believing that a Claude Max plan can consume equivalent to $5000 worth of retail Opus use, but one interesting thing you'll see if you e.g. have Claude write agents for you, is that it's pretty aggressive about setting agents to use Sonnet or even Haiku, so not only will most people not exhaust their plans, but a lot of people who do will do so in part using the cheaper models. When you then factor in Anthropics reported margins, and their ability to prioritise traffic (e.g. I'd assume that if their capacity is maxed out they'd throttle subscribers in favour of paid by the token? Maybe not, but it's what I'd do), I'd expect the real cost to them of a maximised plan to be much lower.

Also, while Opus certainly is a lot better than even the best Chinese models, when I max out my Claude plan, I make do with Kimi 2.5. When factoring in the re-run of changes because of the lower quality, I'd spend maybe 2x as much per unit of work I were to pay token prices for all my monthly use w/Kimi.

I'd still prefer Claude if the price comes down to 1x, as it's less hassle w/the harder changes, but their lead is effectively less than a year.

Electricity is charged whenever you use it or not, so very unlikely, but sure, they can find uses for it. Although they are not going to make that much money compared to claude code subscriptions.

I see quite a few:

“what X actually is”

“the X reality check”

Overuse of “real” and “genuine”:

> The real story is actually in the article. … And the real issue for Cursor … They have real "brand awareness", and they are genuinely better than the cheaper open weights models - for now at least. It's a real conundrum for them.

> … - these are genuinely massive expenses that dwarf inference costs.

This style just screams “Claude” to me.

> I think you're just hallucinating because this does not come across as an AI article

It has enough tells in the correct frequency for me to consider it more than 50% generated.

It was almost certainly at least heavily edited with one. Ignoring the content, every single thing about the structure and style screams LLM.

Name checks out

Tons of companies do this already. It's not like this is a problem that nobody is constantly revisiting...

In practice, tps is a reflection of vram memory bandwidth during inference. So the tps tells you a lot about the hardware you're running on.

Comparing tps ratios- by saying a model is roughly 2x faster or slower than another model- can tell you a lot about the active param count.

I won't say it'll tell you everything; I have no clue what optimizations Opus may have, which can range from native FP4 experts to spec decoding with MTP to whatever. But considering chinese models like Deepseek and GLM have MTP layers (no clue if Qwen 3.5 has MTP, I haven't checked since its release), and Kimi is native int4, I'm pretty confident that there is not a 10x difference between Opus and the chinese models. I would say there's roughly a 2x-3x difference between Opus 4.5/4.6 and the chinese models at most.

China is targeting H20 because that's all they were officially allowed to buy.

I generally agree, back of the napkin math shows H20 cluster of 8gpu * 96gb = 768gb = 768B parameters on FP8 (no NVFP4 on Hopper), which lines up pretty nicely with the sizes of recent open source Chinese models.

However, I'd say its relatively well assumed in realpolitik land that Chinese labs managed to acquire plenty of H100/200 clusters and even meaningful numbers of B200 systems semi-illicitly before the regulations and anti-smuggling measures really started to crack down.

This does somewhat beg the question of how nicely the closed source variants, of undisclosed parameter counts, fit within the 1.1tb of H200 or 1.5tb of B200 systems.

They do not have enough H200 or Blackwell systems to server 1.6 billion people and the world so I doubt it's in any meaningful number.

I assure you, the number of people paying to use Qwen3-Max or other similar proprietary endpoints is far less than 1.6 billion.

You don't need to assure me. It's a theoretical maximum.