Isn't EVERY subscription and SaaS a ticking time bomb for enterprise?
AI subscriptions are a ticking time bomb for enterprise
81–90 of 426 posts
Re: AI subscriptions are a ticking time bomb for enterprise
#82Earlier quoted context omitted.
That isn't enough. Over time the need for growth and increasing profits will squeeze existing margins.
Open source models apply pressures on the low end of the market. The paid models are so much better that they can charge based on value for enterprises.
I wouldn't call Kimi K2.6, GLM5.1, DS4 or newer Qwen models "low end". I prefer GPT5.5, but if it disappeared tomorrow, I'd be perfectly fine with any of these chinese models.
Re: AI subscriptions are a ticking time bomb for enterprise
#83Earlier quoted context omitted.
It's like witnessing a rocket using the most powerful engine on Earth then once it escaped orbit turn off the engine and said "It is flying without power!". Yes, sure, right now it is ... but that's NOT how it got here. There are trillions invested to recoup and at most billions in sales. It doesn't add up to tokens making a profit any time soon.
The problem is, people see "they're not profitable once you account for training" and equate that to "AI will go away soon" But if all the AI companies stopped training new models, they would all instantly become profitable (and stick around) The thing that makes them unprofitable, is having to compete (which means training models). If / when enough companies exit the market, the cost to compete goes down and you end…
That's all true, but that ends badly for us either way. If there's competition, training must continue, which must eventually be reflected in pricing.
But if there's no more competition, there's no more incentive to keep prices low, which will also be reflected in pricing.
Re: AI subscriptions are a ticking time bomb for enterprise
#84[dead]
Re: AI subscriptions are a ticking time bomb for enterprise
#85I think I'm going to puke if I see one more "It's not X. It's Y." phrase or the word "load-bearing" used metaphorically.
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Re: AI subscriptions are a ticking time bomb for enterprise
#86[dead]
Re: AI subscriptions are a ticking time bomb for enterprise
#87Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.
Or put another way, the frontier models are very quickly deprecating assets, because of the competition in the market.
They have to keep getting better to stay ahead of each other and open weight.
Which means it's the opposite of a timebomb, the article has it completely backwards, tokens at current level of reasoning will continue to get cheaper.
I'm not sure 'local' will be the end state, as hardware needs are high. But certainly competitive forces tend to push profit margins toward zero.
Extended discussion on this topic:
https://corecursive.com/the-pre-training-wall-and-the-treadm...
Re: AI subscriptions are a ticking time bomb for enterprise
#88Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.
[dead]
Re: AI subscriptions are a ticking time bomb for enterprise
#89I think I'm going to puke if I see one more "It's not X. It's Y." phrase or the word "load-bearing" used metaphorically.
load bearing has snuck into my vocabulary, but I work with construction workers so it's slightly more intuitive I guess? :/
I definitely heard it semi-frequently from SRE types well before the rise of LLMs.
LLMs are just parroting relevant documents they've assimilated.
Re: AI subscriptions are a ticking time bomb for enterprise
#90MSFT, GOOGL, META are spending $60-100B+ annually on AI infra partly to own the cost floor. the moat isnt the model, its the infrastructure.