You don't know the actual margins -- you only know the API rate. If their API rate has huge margins and the average subscriber isn't coming anywhere close to their limits, the subscription can be very profitable. If they're only near peak capacity in peak working hours (when API traffic is most active) and subscription 5h limits help them redistribute a lot of use outside peak hours when they've got spare capacity, that alone could make a massive difference in profitability.

I think there are unknowns in the calculation:

- What are the margins of Anthropic over their API pricing? Without this, all we're saying is the API is more expensive for heavy usage

- How have their price margins changed over time? I imagine built into their commercial model is the expectation for inference to get cheaper over time

- They have tighter usage windows than they used to, now having both 5-hour and weekly limits, they also seem to experiment with their usage quite often, this probably affects user's average utilisation, do they have any other levers they can pull here? eg how does changing to an 8-hour window affect it, or limiting certain models to API-only usage based on capacity like Fable

I know there is a certain level of subsidised usage built into their subscriptions, the VC-funded company playbook, but I don't think anyone from the outside knows for sure how much it is and I imagine it's lower than most people think, and reducing over time.