[meinersbur]

There is also market separation in play: For the base service you only charge cost+small margin. For higher service levels you charge higher profit margins even though the additional service does not cost that much more to provide.

Best example: flight seats. Economy class fills the plane, but business and first class are the money makers [1].

[1] https://www.youtube.com/watch?v=BzB5xtGGsTc

[HarHarVeryFunny]

Sure, and it wouldn't be surprising to see different pricing for realtime AI API usage vs slower (overnight, etc) response times (to fill up the seats and keep the hardware occupied). It remains to be seen how the dynamics of this works out though - function of cost of increasing capacity vs customer demand at various price points and service levels.

LLM pricing seems to still very much be up in the air though - models getting more efficient, serving hardware getting more efficient, use cases evolving, and not all providers operating with same business model (e.g. Meta, maybe China).

[hermitcrab]

Yes, you see this all over the place. For example, Home and Professional versions of software products:

https://successfulsoftware.net/2013/02/28/how-i-increased-sa...