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Their business model with the pro plan is to sell a dollar for 80 cents for a while to gain market share. Once they have spent the money allocated to this plan and bring it to a close, don’t expect them to resume it in response to righteous indignation: the money will be gone. See also Uber, MoviePass etc

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Inference costs have been in freefall since ChatGPT[1], so this is different than Uber/MoviePass. The primary cost is a technology which is getting cheaper as more investment is put into algorithm + hardware R&D.

[1]: https://epoch.ai/data-insights/llm-inference-price-trends

Just because they’re slashing they’re prices while they compete for users doesn’t mean the cost of inference came down at the same rate or at all.

future hardware costs do not erase losses on existing capex expenditures, if they bought an (overpriced) nvidia GPU and then it turns out local LLMs or a Chinese competitor can do it for much cheaper investors effectively notice the mortgage is underwater. Tech getting cheaper is only handy if your company (e.g. ChatGPT) didn't already make a big gamble they can't sell off (for fear of hurting the cost of the asset they're trying to sell) see also coin "reserves".

That elusive free lunch.

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