[flagged]
AI's Affordability Crisis
51–60 of 436 posts
Re: AI's Affordability Crisis
#52Earlier quoted context omitted.
GP is talking about API / token-based prices, that's why I asked.
I don't know, he said "subscriptions" in the line items, but eg I use Deepseek via the API.
Ah maybe you're right.
I can manage this budget with the chinese models in AWS BedRock. However, in my experience, they aren't as good as claude today.
Re: AI's Affordability Crisis
#53I don't have a crystal ball, but based on similar historical scenarios, I think that one or two of these companies will win--probably because of some unique application, delivery or trade secret that will drive 80% of their revenue. Consider Google, Apple, Amazon, etc. It's still early days...
The US govt is going to ban foreign models and foreign providers, and frontier labs are still cooked, because US companies will RLwash Chinese models to try and get in on the captive market. The frontier labs have already lost the war for coding, their next play is custom models for specific domains... Anthropic Galen for biomedical research, Anthropic Locke for legal analysis, etc, and you won't see _ANY_ intermedia…
> The US govt is going to ban foreign models
The people have a right to make and use whatever models they want, protected by the constitution. At a minimum, the models are described in research papers that are unquestionably protected speech. Skilled devs turn those into programs, also protected speech.
Re: AI's Affordability Crisis
#54I think the biggest problem is not necessarily the cost to develop & serve the models, but how quickly user behavior changed with token based pricing. I know a lot of people at companies where the marching orders changed on a dime end of Q1/start of Q2. These are shops that were fully on the "use AI or die (because we will fire you)" train. Now there's monitoring, reporting, alerting not just on overall cost but on "…
I.e., the demand for programming tokens turns out to be quite elastic.
I would imagine it only gets worse in the face of good-enough open/chinese/local models too right?
Microsoft adding Deepseek support already as I recall?
That is - for any definition of "they are behind X months" then eventually they get to the point Claude was in January when the world freaked out, but at 1/10th the cost. A lot of firms are going to mandate that is good enough for their developers.
Re: AI's Affordability Crisis
#55Affordability is not the current goal.
Vendor lock-in is the current goal. Consumer prices are a drop in the bucket comparatively.
Re: AI's Affordability Crisis
#56Earlier quoted context omitted.
Can you cite a source? Everything I've read describes the costing as linear with growth.
https://simianwords.bearblog.dev/conclusive-proofs-that-llm-...
That article seems a bit bogus. Cost per capability is a soft, non-predictive model unlike cost per token which has been trending up.
Re: AI's Affordability Crisis
#57I really can’t stand when writers point to the difference in price per token on the api and subscription and use that as evidence that inference loses money. This author even says it’s implausible that the api charges 4x marginal cost when I think it’s very likely even higher than that. The entire rest of the post sits on this faulty assumption. Fixed costs don’t matter when marginal revenue is profitable and growing…
Then what are the real costs?
Wrote this a while back. https://martinalderson.com/posts/no-it-doesnt-cost-anthropic...
OpenRouter is the best guide to real costs.
Re: AI's Affordability Crisis
#58I think the biggest problem is not necessarily the cost to develop & serve the models, but how quickly user behavior changed with token based pricing. I know a lot of people at companies where the marching orders changed on a dime end of Q1/start of Q2. These are shops that were fully on the "use AI or die (because we will fire you)" train. Now there's monitoring, reporting, alerting not just on overall cost but on "…
I.e., the demand for programming tokens turns out to be quite elastic.
If folks won't pay a higher price, doesn't that mean it's inelastic?
Re: AI's Affordability Crisis
#59This is basically bunk because AI costs have gone down by 50x or more (api costs) since 3 years.
There are many research avenues which are open which reduces cost dramatically. Smaller task specific/ language specific/ domain specific models, in fact they could even be better. The earlier computers were the size of a building. So prediction based on current state into the unknown future possibilites is wrong. The hardware will be all the more valuable if cheaper ways to run become possible. The hardware gets cornered in a sense.
Re: AI's Affordability Crisis
#60The unit economics might be just fine. We'll know more after IPO. The drug dealer analogy has a darker side to it, however. Once your dependent, they can drive up the price just because . It doesn't need to be for existential reasons.
Once your dependent, they can drive up the price just because. It doesn't need to be for existential reasons.
This is the crisis point for vibe-coders. A developer can go back to writing code by hand, as horrible as that might sound. Someone who hasn't learned to code but builds with AI can't go back. They either pay or they stop. That will be an painful choice whichever way you fall.