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The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

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Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#51

Post by beAbU »

cranium wrote: post #37

I don't understand why simonw's comment is dead, because he mentions a real counterpoint to the video: API token prices are NOT the raw costs for any provider. I'd even say that inference needs to have quite a juicy margin to cover for all the other costs. It would make no business sense to sell API tokens at a loss: nobody knows yet how to price intelligence, so why start in the red when it's the only source of reve…

> It would make no business sense to sell API tokens at a loss: nobody knows yet how to price intelligence, so why start in the red when it's the only source of revenue?

The only consistent bullet point in the playbook of venture capital-driven startups for the last 30 years is to sell $1 bills for $0.50 and then hope to make it up in volume.

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#52

Post by simonw »

cranium wrote: post #37

I don't understand why simonw's comment is dead, because he mentions a real counterpoint to the video: API token prices are NOT the raw costs for any provider. I'd even say that inference needs to have quite a juicy margin to cover for all the other costs. It would make no business sense to sell API tokens at a loss: nobody knows yet how to price intelligence, so why start in the red when it's the only source of reve…

Huh, I had not realized my comment was [dead] - it's here https://news.ycombinator.com/item?id=48492313 (I see it as not-dead, which I guess is how the dead system works) (UPDATE: it's no longer dead)

I was calling out the video for starting with:

> If you paid for that usage through a standard API, those 10 billion tokens would cost you around $15,000 a year. That is the real unsubsidized price. No discounts, no incentives, just the raw compute costs.

When "raw compute costs" is entirely misleading to describe API pricing.

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#53

Post by anthonypasq »

ACCount37 wrote: post #46
anthonypasq wrote: post #41

Earlier quoted context omitted.

Mythos is 20x more expensive though

Fable 5 is listed at merely x2 of Opus 4.8 on OpenRouter. $10/$50 per 1M I/O, vs $5/$25. Now, Fable 5 is currently borderline unusable because of asinine filters. But I assume they'll fix this shit eventually.

im talking about compared to composer 2.5

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#54

Post by [deleted] »

moralestapia wrote: post #45
anthonypasq wrote: post #39

Earlier quoted context omitted.

i mean this is difficult to calculate because of prompt cacheing, the ratio of input/output token etc, but if you just do some napkin math, i find it hard to believe people are getting this many tokens on a $20 plan. heres some napkin math gpt oss 120b is in/out price at 0.039/ 0.18 per million on open router. heres some assumptions. 1. the ratio of input/ouput is about 25/1. (coding is mostly grep and fairly low out…

I didn't say "use openrouter" as you might end using subsidized resources, part of the argument is to avoid that and reach the true capital cost of inference per token (or something like that). I meant, buy/lease the hardware that lets you run this model, run gpt-oss-120b and measure. I did this once and it was like 10x more expensive than any hosted alternative, and $20 wouldn't get you far there.

[deleted]

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#55

Post by Matticus_Rex »

dag100 wrote: post #33
Matticus_Rex wrote: post #28

Earlier quoted context omitted.

Generating huge consumer surpluses as a business strategy? Awesome if true.

Err, yes, until the surplus kills off all other competition and allows the supplier to jack prices up sky high, or otherwise bend consumers to their will. There's a reason most countries will stop foreign firms from doing this to them.

Except there's lots of competition for creating that surplus, including from open source locally-hosted LLMs, and while it's behind the frontier it's not that far behind the frontier.

The dumping -> non-competitive price increases playbook is historically very, very rare, and relies on a monopoly (or in a few cases oligopoly) with large externally-enforced barriers to entry. The oligopoly case is highly unstable and doesn't last, and besides we don't have notable barriers to entry; we have both market competitors and locally-hosted imperfect substitute goods.

There's essentially no reason to believe the dynamic you're predicting could succeed here, because we lack all the conditions that make it more likely to succeed, and it's very rare anyway.

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#56

Post by anthonypasq »

moralestapia wrote: post #45
anthonypasq wrote: post #39

Earlier quoted context omitted.

i mean this is difficult to calculate because of prompt cacheing, the ratio of input/output token etc, but if you just do some napkin math, i find it hard to believe people are getting this many tokens on a $20 plan. heres some napkin math gpt oss 120b is in/out price at 0.039/ 0.18 per million on open router. heres some assumptions. 1. the ratio of input/ouput is about 25/1. (coding is mostly grep and fairly low out…

I didn't say "use openrouter" as you might end using subsidized resources, part of the argument is to avoid that and reach the true capital cost of inference per token (or something like that). I meant, buy/lease the hardware that lets you run this model, run gpt-oss-120b and measure. I did this once and it was like 10x more expensive than any hosted alternative, and $20 wouldn't get you far there.

heres the creator of opencode explaining how you are wrong

https://youtu.be/1VqKUrxR2C8?si=uOAs_4XNXtTyTwCP&t=2195

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#57

Post by lostmsu »

ktzar wrote: post #11
tonymelony wrote: post #2

This rumor is not demonstrably true. The subscription prices are competitive and for heavy users even cheap compared to API rates, but there is no evidence that they are structurally priced below cost.

A good way to think about it is finding how much it'd cost to buy and run a GPU that runs a model at around 100tk/s ("thinking" agents are not viable otherwise). The figure mentioned in the video is not far off

That's not evidence, that's a theory of evidence existing somewhere.

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#58

Post by IceDane »

cranium wrote: post #37

I don't understand why simonw's comment is dead, because he mentions a real counterpoint to the video: API token prices are NOT the raw costs for any provider. I'd even say that inference needs to have quite a juicy margin to cover for all the other costs. It would make no business sense to sell API tokens at a loss: nobody knows yet how to price intelligence, so why start in the red when it's the only source of reve…

> According to my rough computation (N=1), a Claude Max 20x at $200 gives you access to around $8k

According to my own personal `cc-usage` script, I'm just about to hit $15k in the past 30 days, and that's about half 5x and half 20x. And I'm not someone running openclaw or letting my agents spin around 24/7 - this is just very active agentic coding, where I'm constantly involved.

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#59

Post by moralestapia »

anthonypasq wrote: post #56
moralestapia wrote: post #45

Earlier quoted context omitted.

I didn't say "use openrouter" as you might end using subsidized resources, part of the argument is to avoid that and reach the true capital cost of inference per token (or something like that). I meant, buy/lease the hardware that lets you run this model, run gpt-oss-120b and measure. I did this once and it was like 10x more expensive than any hosted alternative, and $20 wouldn't get you far there.

heres the creator of opencode explaining how you are wrong https://youtu.be/1VqKUrxR2C8?si=uOAs_4XNXtTyTwCP&t=2195

He's either incompetent or lying.

An H100 today costs $2.95 an hour on vast.ai[1], which is already a good deal.

gpt-oss-120b on an H100 gives you ~200-250 tokens per second. I will be generous and say you can get a million tokens an hour out of it.

OpenCode Go (which I gladly pay for, because of this in part) is $10 a month, that's three hours of H100 use, and the models you have there are more expensive than gpt-oss-120b. Sure, they have "scale" (although that doesn't apply to AI inference, but whatever) and this and that, they're still pricing it 20-30x below their minimum threshold of capital expense.

Apples to apples, GLM 5.1 they sell it to you at $4.40 per million tokens, at ~50 tps in an H100 (being generous) it costs ~$16 to do a million tokens.

The math is simple and clear, they lose money.

1: https://vast.ai/pricing

Re: The $15,000 AI Bill. Your $20 Subscription is a DELUSION [video]

#60

Post by anthonypasq »

moralestapia wrote: post #59
anthonypasq wrote: post #56

Earlier quoted context omitted.

heres the creator of opencode explaining how you are wrong https://youtu.be/1VqKUrxR2C8?si=uOAs_4XNXtTyTwCP&t=2195

He's either incompetent or lying. An H100 today costs $2.95 an hour on vast.ai[1], which is already a good deal. gpt-oss-120b on an H100 gives you ~200-250 tokens per second. I will be generous and say you can get a million tokens an hour out of it. OpenCode Go (which I gladly pay for, because of this in part) is $10 a month, that's three hours of H100 use, and the models you have there are more expensive than gpt-os…

its kind of hilarious and so hackernews coded to think you know more about the product you use than the guy who actually built it.
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