GitHub Copilot's pricing gamble

On June 1, GitHub switched the pricing model for Copilot from a request-based model to a usage-based model. This followed years of losing money1 on every Copilot plan in an effort to gain AI market share. Tech companies use this approach regularly, offering free or low-cost introductory rates to attract their user base before scaling back those offerings in favor of higher-priced services (often moving upmarket in the process). This is a well-worn path trodden by many companies who went on to make a lot of money on their products. It’s no wonder that GitHub, along with Anthropic and OpenAI, priced their products to attract the most users in the shortest period of time while losing money2. Most users didn’t realize that these prices were heavily subsidized and that those subsidies would eventually come to an end. It appears that, after three years, GitHub decided that it was tired of losing money. (This change may or may not be related to the Microsoft-OpenAI divorce3, which means less…