The research firm purchased every subscription from the two AI providers and discovered that the approximate maximum possible spend (assuming API pricing) is far larger than what users pay every month. For example, Claude Max 20x costs $200 a month, but maximizing it would cost $8,000 a month in token spend, while ChatGPT Pro 20x, which is also $200 monthly, has a maximum possible spend of around $14,000.
Ehhh…yeah, but that alone isn’t necessarily an issue. There are plenty of services that exist that rely on consumers, in aggregate, not maximizing resource usage. Residential ISPs normally oversell their service. That works because the typical user only uses a tiny fraction of their sustained maximum rate of bandwidth consumption. In theory, if a lot of users started fully saturating their lines all the time, ISPs could shift everyone to metered service, but it works well enough and enough people value not having to worry about metering more than paying the minimum per-byte cost, so the system functions.
Residential ISPs usually have a contention ratio somewhere around 30:1 to 50:1. That means that 30 to 50 customers that each have a 1Gbps connection all share 1Gbps of upstream bandwidth.
Business connections are closer to 10:1, and a leased line (dedicated circuit) is 1:1.
I may be wrong but I thought airlines did similar. They sold more tickets than existing seats assuming people would cancel. That’s why sometimes they offer cashback at terminal for a different flight, but it still comes out net positive
I assume this is for basic economy only, where you can’t select a seat? If I choose a seat when booking, I can’t imagine the airline allows someone else to choose the same seat?
It might depend on the airline. I used to travel with Ryanair frequently, and special tickets (whatever they were called) were only available for 1/3 of the plane’s capacity on a first-come-first-serve basis. Those upgrades got you to choose your seat, skip the queue and guaranteed space for a carry-on bag. All of those things follow a similar pattern: if everyone did it the system would break, which is likely why they picked 1/3 as a cap. It’s actually quite clever, although I still dislike the ongoing enshittification of air travel that the budget airlines have caused, despite benefiting from it for a couple of years.
Whether they do that or not, I know that they have (or have had in the past) deals where they explicitly provide discounted tickets where you basically have “bottom priority” to get a seat on a flights, and you only get notified whether there’s space for you with a limited number of hours notice. IIRC it’s targeted at retirees, who have a flexible schedule and may favor inexpensive travel.
Ehhh…yeah, but that alone isn’t necessarily an issue. There are plenty of services that exist that rely on consumers, in aggregate, not maximizing resource usage. Residential ISPs normally oversell their service. That works because the typical user only uses a tiny fraction of their sustained maximum rate of bandwidth consumption. In theory, if a lot of users started fully saturating their lines all the time, ISPs could shift everyone to metered service, but it works well enough and enough people value not having to worry about metering more than paying the minimum per-byte cost, so the system functions.
Residential ISPs usually have a contention ratio somewhere around 30:1 to 50:1. That means that 30 to 50 customers that each have a 1Gbps connection all share 1Gbps of upstream bandwidth.
Business connections are closer to 10:1, and a leased line (dedicated circuit) is 1:1.
I may be wrong but I thought airlines did similar. They sold more tickets than existing seats assuming people would cancel. That’s why sometimes they offer cashback at terminal for a different flight, but it still comes out net positive
I assume this is for basic economy only, where you can’t select a seat? If I choose a seat when booking, I can’t imagine the airline allows someone else to choose the same seat?
It might depend on the airline. I used to travel with Ryanair frequently, and special tickets (whatever they were called) were only available for 1/3 of the plane’s capacity on a first-come-first-serve basis. Those upgrades got you to choose your seat, skip the queue and guaranteed space for a carry-on bag. All of those things follow a similar pattern: if everyone did it the system would break, which is likely why they picked 1/3 as a cap. It’s actually quite clever, although I still dislike the ongoing enshittification of air travel that the budget airlines have caused, despite benefiting from it for a couple of years.
I don’t really know the details, sorry.
Whether they do that or not, I know that they have (or have had in the past) deals where they explicitly provide discounted tickets where you basically have “bottom priority” to get a seat on a flights, and you only get notified whether there’s space for you with a limited number of hours notice. IIRC it’s targeted at retirees, who have a flexible schedule and may favor inexpensive travel.