Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Outsourcing plus local AI will soon become more economical vs. frontier labs

signalbloom.ai

Post reply on HN
Print view View original

91–100 of 408 posts

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#91

Post by alexriddle »

simonw wrote: post #79
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.

Anything over 150 seats means you need to pay at token rates plus the $20/user. My day job is operational (no coding at all) and I'm spending ~$300 a month on a few chats with Claude/Cowork a day over the course of a month.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#92

Post by wongarsu »

lelanthran wrote: post #54
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

> When discussing LLM pricing, people are missing the plot. [ ... snipped ...] Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. And you think it is unreasonable to consider this unsustainable?

Depends on what their actual costs are. Either they are losing lots of money on subscriptions, or they make absolute bank on API pricing.

Looking at the pricing of 1-2T models like Kimi or DeepSeek on the open market, I'm tempted to assume that inference costs are closer to subscription pricing than to API pricing.

Especially considering that subscriptions a) distribute load over time via rate limits, and b) will include a lot of users who get only a fraction of the possible value, whether they are on a personal account where they are on the rate limit on the weekend but barely use it during the week, or are corporate users who were issued an account they rarely use. Subscription prices are usually measured on the average case, not the most extreme value a power user can get out of it

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#93

Post by stymaar »

Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

> Lastly, there is a massive difference in capabilities, determinism, and error handling between 5T SOTA models like Opus

What's your source for Opus being a 5T model?

> and tiny distillations from DeepSeek that perform well only in benchmarks.

I don't think you know what you're talking about. Local models aren't “distillations from Deepseek”.

And they don't perform well “only in benchmarks”, Qwen 3.6 is a very decent model (obviously it's not Opus, but it's also much faster and speed is a quality of its own).

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#94

Post by rastrojero2000 »

It's particularly funny to me, but a minor point, that this post requires me to go through some kind of cloudflare armed checkpoint to dare read about AI.

A bigger issue is this thing calls AIs better coders than people and I have tried for the past 4 months to get one of the several I looked into to consistently produce a simple event-bus backed Java monorepo going with exactly zero success. Claude even repeatedly wanted to put my login logic at the actual event bus, for some reason.

What does "better coder" _exactly_ mean at this point?

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#95

Post by stymaar »

alexriddle wrote: post #91
simonw wrote: post #79

Earlier quoted context omitted.

I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.

Anything over 150 seats means you need to pay at token rates plus the $20/user. My day job is operational (no coding at all) and I'm spending ~$300 a month on a few chats with Claude/Cowork a day over the course of a month.

I hope your company is keeping the input/response pair in case they need to break free at some point.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#96

Post by lmeyerov »

Fwiw, the cost per answer, which is what ultimately matters, is going down. In a competitive market with oss and multiple frontier labs, it is hard to maintain a premium long-term.

The big question is how subsidies vs technology improvement will play out. As we saw with Uber, selling at a loss can happen for a very long time, and technology improves relentlessly.

For reference, we publish https://botsbench.com/ that shows time and cost per answer are going down while quality is going up.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#97

Post by Aurornis »

aftbit wrote: post #61
Aurornis wrote: post #41

Earlier quoted context omitted.

> they may have inadvertently priced themselves out of the market. Last week we were all talking about how Anthropic has too much demand, how they had to rent a data center from a competitor, and how the limits they’ve put on their service to deal with the demand are making users angry. DeepSeek is cheap because they’re working hard to attract users. The open weights models released for free weren’t free to train. It…

Yes and no. Just take a look at the OpenRouter providers page: https://openrouter.ai/deepseek/deepseek-v4-pro/providers Deepseek v4 Pro is much cheaper when provided by Deepseek itself, likely as a combination of the loss leader strategy you mention and the desire to have more data flow through their pipeline for training. However, the same open weights model, provided by other providers, is somewhere in the $2-3/1M…

> Unless you mean that releasing open weights models is the loss leader, in which case, you might be right but I hope you're wrong.

This is specifically what I meant.

DeepSeek’s official service is trying to recoup some of the training and engineering costs too.

The other providers only have to recoup their hardware costs and the cost of a team to run it.

Even though DeepSeek’s official service is more expensive per token, they’re running at a lower profit than the OpenRouter providers because they had to pay for the R&D.

This is a deliberate choice. We already see it with Qwen splitting their releases between open weight and hosted only models. The open weights are a loss leader to get attention. Without them you’d almost never hear about their hosted models.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#98

Post by datadrivenangel »

simonw wrote: post #79
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.

I've heard that the $20/seat gets waved if you have large enough committed spend.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#99

Post by zozbot234 »

stingraycharles wrote: post #77
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

Also, your local hardware is in no way capable of running the types of models that the cloud providers do, it’s just not economically feasible, and it never will be.

It can run open-weight models that are roughly as capable. It's going to be slow unless you're using actual datacenter hardware, but they'll run.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#100

Post by Forgeties79 »

wongarsu wrote: post #92
lelanthran wrote: post #54

Earlier quoted context omitted.

> When discussing LLM pricing, people are missing the plot. [ ... snipped ...] Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. And you think it is unreasonable to consider this unsustainable?

Depends on what their actual costs are. Either they are losing lots of money on subscriptions, or they make absolute bank on API pricing. Looking at the pricing of 1-2T models like Kimi or DeepSeek on the open market, I'm tempted to assume that inference costs are closer to subscription pricing than to API pricing. Especially considering that subscriptions a) distribute load over time via rate limits, and b) will inc…

Considering not one company is in the black yet I don’t really know how we can say anyone is making bank, unless we want to count absurd levels of VC funding (now slowing down) I guess.
Post reply on HN