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This is Microsoft subsidizing Claude inference costs -- if you look at how they charge models against your allotment, Gemini, GPT-5 and Claude 4 Sonnet all cost the same, despite Claude 4 Sonnet being more expensive than the other two. Not really sure I understand the economics here, especially since there's not really a clear winner between GPT-5 and Claude 4 Sonnet for coding (if anything I think GPT-5 puts up a better showing).


"Sonnet being more expensive than the other two" -> you mean based on public pricing? Microsoft will not be paying retail prices for this.


I'm sure they don't pay retail on GPT-5 either.


I think copilot is very aggressive on tokens and context size. That is how I guess the economy works for them.


It might be that they pay less for anthropic depending how many tokens are generated by each model: total cost is token cost times number of tokens. I haven't checked gpt5, but it is not impossible that price wise they might be very comparable if you account for reasoning tokens used.


Is it possible that regardless of what they pay they think Anthropic is negative margin on it?


> I think GPT-5 puts up a better showing

Would the more casual Copilot audience be OK with gpt-5-high - the model that many say is better than Sonnet - taking significantly longer to respond? Potentially minutes longer. A faster model can make sense as a default


> Not really sure I understand the economics here

There is nothing to understand. The point of such subsidies is to turn OPEX into a green line on the stock market.

Especially as Microsoft is currently also in a fight with OpenAI.




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