GitHub says it can no longer absorb "escalating inference cost" from it heaviest AI users.
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GitHub will start charging Copilot users based on their actual AI usage
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What? People enthusiastically used the thing that Microsoft said was the Best Thing Ever, that you couldn't escape if you wanted, and that they were aggressively subsidizing? How Dare They! Time for the peasants to cough up, I guess.
/s
/s
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And so it begins.... curious how this will affect the economics of recent hiring trends with mass layoffs that were done because of "AI" (or, so those CEOs claimed). Pricing for these LLMs needs to go up probably 10-20x (my guesstimate) to ensure these companies aren't losing money hand over fist. And then suddenly people start to look a lot less expensive again.
LLMs certainly have their value with some use cases, but humans still can add even more value. Hopefully the pendulum swings back to a more balanced state.
LLMs certainly have their value with some use cases, but humans still can add even more value. Hopefully the pendulum swings back to a more balanced state.
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tl;dr "eventually, product must be sold for more than it costs to produce"
Enjoy your vibe-coding, everyone! I hope you didn't reorient your entire organizational structure around this shit.
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I hear many anecdotes about individual employees burning $10k+/month of tokens for marginal gains in productivity. Look up "tokenmaxxing" if you want to melt your brain. GitHub probably made this change because they can't viably sustain a bunch of
Right now tokenmaxxers are getting kudos, bonuses, and promotions for helping their employers' AI adoption metrics. I can't help but wonder what will happen to them once the model providers start needing to turn a profit.
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Let's see how well the profits flow.
Oh, wait... once you start charging people for what they use, they go, "Holy fucking shit balls batman!" and bail like their hair is on fire.
The part about AI being useful is that it's not worth the cost of using ENOUGH to keep the lights on at the AI plant. Especially when going back to using the previous methods are less. If productivity improvement was enough to offset the costs (they're largely not - at least not enough to justify the continued use in almost all cases), then it would have succeeded by now.
It hasn't, it isn't and it won't.
At least now we get to see the fireworks when economic reality asserts itself into the bullshittery of "monthly revenue" the AI industry keeps using instead of "Monthly profits". Because, there haven’t been profits, so far.
At this point, the supply far outstrips the demand.
Oh, wait... once you start charging people for what they use, they go, "Holy fucking shit balls batman!" and bail like their hair is on fire.
The part about AI being useful is that it's not worth the cost of using ENOUGH to keep the lights on at the AI plant. Especially when going back to using the previous methods are less. If productivity improvement was enough to offset the costs (they're largely not - at least not enough to justify the continued use in almost all cases), then it would have succeeded by now.
It hasn't, it isn't and it won't.
At least now we get to see the fireworks when economic reality asserts itself into the bullshittery of "monthly revenue" the AI industry keeps using instead of "Monthly profits". Because, there haven’t been profits, so far.
At this point, the supply far outstrips the demand.
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Free is always going to be popular but "Do I want to spend $1 to have this thing re-write an email for me?" is a whole 'nother thing.
The sooner people understand the real environmental, social and personal costs of LLMs the better.
The sooner people understand the real environmental, social and personal costs of LLMs the better.
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This should be entertaining!
I'm guessing a lot of people have been using Copilot precisely because the cost has been subsidised. So those people will now jump ship to whatever LLM provider is still offering a subsidised service. And then that LLM provider will have to raise their prices...
And then the industry will go around this loop a few times, until there's no more subsidised LLM services left for people to take advantage of. At which point, we'll finally see how big the commercial customer base actually is for LLM models.
I suspect the results will be far too small to justify the current valuations of companies such as OpenAI!
I'm guessing a lot of people have been using Copilot precisely because the cost has been subsidised. So those people will now jump ship to whatever LLM provider is still offering a subsidised service. And then that LLM provider will have to raise their prices...
And then the industry will go around this loop a few times, until there's no more subsidised LLM services left for people to take advantage of. At which point, we'll finally see how big the commercial customer base actually is for LLM models.
I suspect the results will be far too small to justify the current valuations of companies such as OpenAI!
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On one level its funny, but I hope Github would cut the connection before they roll out the price increases.
You raise an amazing point. If the agents have been set up to automatically log in and submit requests this may bite people far past the next month. Companies are going to have to go over their automation with a fine tooth comb.
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Suddenly firing all your competent programmers to "save money" isn't looking so hot anymore? Sure, you can have them back but now they know the ceiling of what you are willing to pay.
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Klarna rehired human customer service reps after firing them all for AI (but they are being offered gig worker jobs).
My team has reported 3 or 4 major GitHub outages in the past two weeks. We’d pay extra for GitHub classic with all the old fashioned uptime and none of the new AI “features.”
Edit for typo
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Thank fuck, maybe my managers will finally stop trying to shove that shit down our throats.
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The reckoning has begun, though I would not have predicted that GitHub/Microsoft would be one of the first to cave and start passing the bill onto users.
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Oh thank god. We're about to see how useful these products are when they're not subsidized. I'd bet they don't have the foothold they think they do.
Now to see how long it takes Anthropic and OpenAI to follow suit, or if they can somehow continue to incinerate VC money.
Now to see how long it takes Anthropic and OpenAI to follow suit, or if they can somehow continue to incinerate VC money.
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It is almost like the words "charity" and "business" were always two separate words and ideas for a reason.
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Flat rate pricing is a trap. It sounds good at first, but encourages overuse and dependance. Every time the price goes up you are faced with an all-or-none decision, which by then you can't say "none". With usage based pricing, you can respond to a price increase by using it less. If the business sets prices too high, revenue goes down. So even in a monopoly scenario there is downward pressure on prices. This is a good lesson for Internet pricing as well.
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In-App Purchases"
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Frankly at $19 a month it was already a difficult sell for it's level of usefulness.
90% of my companies various copilot (GitHub and 365) usage is managers pretending to understand stuff they don't and getting it wrong.
The other 10% is people being lazy and using it to avoid writing basic stuff like loops or summarized objects.
For a technology destroying the world it's pretty garbage.
90% of my companies various copilot (GitHub and 365) usage is managers pretending to understand stuff they don't and getting it wrong.
The other 10% is people being lazy and using it to avoid writing basic stuff like loops or summarized objects.
For a technology destroying the world it's pretty garbage.
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I'll miss my free premium requests I get through GitHub Education, but at the same time, the overall net benefits to society are 1000% worth me having to debug a little slower again
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What's that I hear - is it the sound of the ice starting to crack under the feet of the managers who insisted that they could get rid of humans and just use LLMs instead?
This mess can't break up and sink careers fast enough.
This mess can't break up and sink careers fast enough.
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I switched to GH Copilot from Claude Code because it was $10 instead of $20 and everywhere I read mentioned that I could get a lot more usage from GHC. Well, in a hobbyist situation, writing shell scripts, brainstorming ideas I burnt through my allotment 10 days into the month. "Your quota will be reset on May 1, pay as you go until then." No thanks.
Now I am back to Codex and trying to wire up local models via pi and farm out heavier tasks to the cloud. "May we live in interesting times." Cheers.
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I go to lots of tech events in a tech hub and frequently offer mentorship and help to startups. I am not kidding when I say I’d get fired quickly at any normal SaaS company if I had AI numbers.
Most AI product users try it once and never come back. The users that stay cost orders of magnitude more than they pay. The cohort retention and churn numbers on most AI products are unbelievable, both b2B and B2C. I’m talking five nines of user churn on a free product!
Ironically, the price increase on Claude Code may have been the straw that broke Microsoft’s back.
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My (unrealistic) hope is that boards at companies that pivoted HARD into AI as a replacement for experienced humans hold their CEO to account for the budget busting bills this will result in. Would be (too) good to see these antisocial fucks held to account for somehow Not seeing this coming.
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Counter-argument: you don't have to love them, but Microsoft is basically a mature company that is well-conditioned to sell regular products to regular customers for regular money.
This is another SKU in MS's staid, conventional product lineup. When OpenAI/Anthropic/etc. need to make this reorientation, that's all she wrote, that's all they have. It will be the coyote having run 100 feet out over the cliff edge and that will be a very interesting day in the office.
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Also, where are the taxes on token usage (or some better AI-centric metric if one exists)? If work done by humans is getting displaced by work done by AI, part of the problem is that we're taxing human labor and letting AI labor skate by tax free.
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Anyone remember the Asimov story "The Feeling of Power"? Someday, someone will discover that people can learn to do the tasks that we became dependent on computers to do for us, and it will revolutionize the world.
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I can't imagine that cliff is very far off if deep pocket entities like Microsoft are already reaching for the brakes to reign in ballooning costs. It answers why Anthropic was so desperate for "investment" in the past week or so
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Remember when people argued 'AI is only a money pit now because of all the training, but it'll be profitable on inference?'
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It will be interesting to see what these changes actually mean. Are these tools actually good enough to justify the costs once they are no longer being subsidized by investor money? It sounds like this could also be just the first bump as this seems to just be looking to cover the inferencing costs of just running the model and not necessarily covering the training costs. Those can be massive but could be pretty low if spread across enough usage but they also seem to be continually chasing better models which means any given model doesn't get used for as much inferencing before being replaced.
I also think the potential opacity and confusion around billing will drive some people/business away. If Joe coder can suddenly hit you with a bill for hundreds or thousands of dollars that may push some businesses away from the idea. Most places I've been have had tight controls on who can spend company money and how much. Throwing tools to people that let them create bills for $$$ without oversite seems contradictory to that. Maybe GitHub has some settings to manage that with caps or what ever else but still a consideration. Even $100 per person times hundreds or thousands of devs adds up to real money pretty quickly.
I also think the potential opacity and confusion around billing will drive some people/business away. If Joe coder can suddenly hit you with a bill for hundreds or thousands of dollars that may push some businesses away from the idea. Most places I've been have had tight controls on who can spend company money and how much. Throwing tools to people that let them create bills for $$$ without oversite seems contradictory to that. Maybe GitHub has some settings to manage that with caps or what ever else but still a consideration. Even $100 per person times hundreds or thousands of devs adds up to real money pretty quickly.
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IDK about "conventional". Microsoft is increasingly a web infra and SaaS company. Microsoft has stopped caring about Windows, because it is 10% of their total revenue. Copilot is 5%. This was 2023 revenue:
https://www.visualcapitalist.com/microsofts-revenue-by-product-line/
And their 2025Q4 statement was even more so:
https://www.microsoft.com/investor/reports/ar25/index.html
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