LLM pricing has never made sense

Yesterday, Claude Code disappeared from the $20/month subscription tier on Anthropic’s website. Well, for some people. Then it came back. As Simon Willison put it, it’s all very confusing. Anthropic’s Head of Growth, Amol Avasare, said this was caused by a “test” gone slightly wrong. Apparently only 2% of users were supposed to see the new pricing page. But this suggests Anthropic is considering raising rates substantially for code generation product. A day earlier, GitHub announced that its Copilot code generation product would be “pausing new sign-ups, tightening usage limits, and adjusting model availability”. Effectively, the product is going to get substantially worse for current users, and even worse for new users when they can sign up again. Almost a year ago, Sam Altman said there was an AI bubble. He also said that OpenAI is losing money on its $200/month Pro subscriptions. None of this should be surprising. OpenAI in particular has raised over $290 billion dollars of…