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OpenAI dropped the price of o3 by 80%

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Re: OpenAI dropped the price of o3 by 80%

#91

Post by briian »

croes wrote: post #49
ninetyninenine wrote: post #20

You know. because LLMs can only be built by corporations... but because they're so easy to build, I see the price going down massively thanks to competition. Consumers benefit because all the companies are trying to out run each other.

Easy doesn’t mean cheap. They need lots of energy and customers don’t pay much, if they pay at all

Exactly,

The developers of AI models do have a moat, the cost of training the model in the first place.

It's 90% of the low effort AI wrappers with little to no value add who have no moat.

Re: OpenAI dropped the price of o3 by 80%

#92

Post by Szpadel »

anticensor wrote: post #60
CSMastermind wrote: post #55

Earlier quoted context omitted.

This is almost certainly what they're doing and rebranding the original o3 model as "o3-pro"

-pro models appear to be a best-of-10 sampling of the original full size model

how do you sample it behind the scenes? usually best of X means you generate X outputs and you choose best result.

if you could do this automatically, it would be game changer as you could run top 5 best models in parallel and select best answer every time

but it's not practical because you are the bottleneck as you have to read all 5 solutions and compare them

Re: OpenAI dropped the price of o3 by 80%

#93

Post by jdprgm »

rvnx wrote: post #27
candiddevmike wrote: post #16

It's going to be a race to the bottom, they have no moat.

Especially now that they are second in the race (behind Anthropic) and lot of free-to-download and free-to-use models are now starting to be viable competitors. Once new MacBooks and iPhones have enough memory onboard this is going to be a disaster for OpenAI and other providers.

While mac unified ram inference is great for prosumers+ I really don't foresee Apple making 128GB+ options affordable enough to be attractive for inference for the general public. iPhone even less so considering the latest is only at 8GB. Meanwhile the best model sizes will just keep growing.

Re: OpenAI dropped the price of o3 by 80%

#94

Post by eunoia »

bitpush wrote: post #67
rvnx wrote: post #23

Earlier quoted context omitted.

Opus is really great but through Claude Code. If you used Cursor or RooCode it could be normal that you get disappointed

This matches my experience, but cant explain it. Do you know what's going on?

My understanding is context size. Companies like Cursor are trying to minimize the amount of context sent to the models to keep their own costs down. Claude Code seems to send a lot more context with every request and that seems to make the difference.

Re: OpenAI dropped the price of o3 by 80%

#95

Post by supermdguy »

bitpush wrote: post #67
rvnx wrote: post #23

Earlier quoted context omitted.

Opus is really great but through Claude Code. If you used Cursor or RooCode it could be normal that you get disappointed

This matches my experience, but cant explain it. Do you know what's going on?

Just guessing, but the new Opus was probably RL tuned to work better with Claude Code's tool calls

Re: OpenAI dropped the price of o3 by 80%

#96

Post by aizk »

bitpush wrote: post #62
coffeecoders wrote: post #51

Despite the popular take that LLMs have no moat and are burning cash, I find OpenAI's situation really promising. Just yesterday, they reported an annualized revenue run rate of 10B. Their last funding round in March valued them at 300B. Despite losing 5B last year, they are growing really fast - 30x revenue with over 500M active users. It reminds me a lot of Uber in its earlier years—fast growth, heavy investment, b…

The problem is your costs also scale with revenue. Ideally you want to have control costs as you scale (the first you build is expensive, but as you make more your costs come down). For OpenAI, the more people use the product, the same you spend on compute unless they can supplement it with another ways of generating revenue. I dont unfortunately think OpenAI will be able to hit sustained profitability (see Netflix f…

> sustained profitability (see Netflix for another example)

What? Netflix is incredibly profitable.

Re: OpenAI dropped the price of o3 by 80%

#97

Post by paxys »

rvnx wrote: post #27
candiddevmike wrote: post #16

It's going to be a race to the bottom, they have no moat.

Especially now that they are second in the race (behind Anthropic) and lot of free-to-download and free-to-use models are now starting to be viable competitors. Once new MacBooks and iPhones have enough memory onboard this is going to be a disaster for OpenAI and other providers.

Third behind Anthropic/Google. People are too quick to discount mindshare though. For the vast majority of the world's population AI = LLM = ChatGPT, and that itself will keep OpenAI years ahead of the competition as long as they don't blunder away that audience.

Re: OpenAI dropped the price of o3 by 80%

#99

Post by bitpush »

aizk wrote: post #96
bitpush wrote: post #62

Earlier quoted context omitted.

The problem is your costs also scale with revenue. Ideally you want to have control costs as you scale (the first you build is expensive, but as you make more your costs come down). For OpenAI, the more people use the product, the same you spend on compute unless they can supplement it with another ways of generating revenue. I dont unfortunately think OpenAI will be able to hit sustained profitability (see Netflix f…

> sustained profitability (see Netflix for another example) What? Netflix is incredibly profitable.

Probably a bad example from my part, but also because of increasing the costs and offering a tier with ads. I was mostly talking about the Netflix as it was originally concieved. "Give access to unlimited content at a flat fee", which didnt scale pretty well.

Re: OpenAI dropped the price of o3 by 80%

#100

Post by rvnx »

jstummbillig wrote: post #80
ratedgene wrote: post #64

Earlier quoted context omitted.

That's slowly changing. I know some relatively non-tech savvy young people using things like Claude for various reasons, so people are exploring options.

Very, very slowly. OpenAI vs Anthropic on Google Trends https://trends.google.com/trends/explore?date=today%203-m&q=... ChatGPT vs Claude on Google Trends https://trends.google.com/trends/explore?date=today%203-m&q=...

This is such a big difference, thank you for sharing it, I didn't expect the gap to be _that_ huge
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