That’s not what this indicates. This is the biggest and most expensive to serve, and most capable open weights model yet. They’re just pricing it in line with capabilities.
Kimi also offers generous subscriptions. Subs aren’t going anywhere. Think of subs like running an insurance business. There might be some users you lose money on (ones who max out their weekly quota without fail), but they’re managed such that the average subscription turns a healthy profit. There’s never been subsidies in model serving, inference is just cheaper in terms of ops TCO than people assume, and API margins are very high.
> They’re just pricing it in line with capabilities.
So... convergence?
> but they’re managed such that the average subscription turns a healthy profit.
It didn't work like that, or at least that's not how it played out. People max-out their subs all the time which is why strict and multiple limits were implemented by all providers. Also, I subscribe to z.ai and recently they dropped the quota significantly that now their sub offers less than Claude and OpenAI. It's still x5-6 what it would cost on API costs though.
> inference is just cheaper in terms of ops TCO than people assume, and API margins are very high.
API margins (at least american ones) are probably healthy. But I don't think that inference is that cheap. It would cost 300-500k to just run GLM 5.2. There are lots of other factors too: reliability (can you keep the GPUs running all time), electricity cost, sys. admin costs, location costs, etc.. I wouldn't be surprised if the API margins are quite close to operational costs.