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GLM 5.2 and the coming AI margin collapse

martinalderson.com

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Re: GLM 5.2 and the coming AI margin collapse

#181

Post by tw1984 »

blagui wrote: post #95

GLM is the model that will sink the frontier labs. Recall last year deepseek? And 18 month's later? What changed?

> GLM is the model that will sink the frontier labs.

this is the claim you are making here, no one else claimed that.

two obvious issues here -

1. GLM itself is a frontier lab, ranked No.3 in the world in July 2026, ahead of Google, Meta and xai. GLM is not going to sink itself.

2. GLM won't sink OpenAI, it will significantly restrain OpenAI's profit margin. OpenAI will still be able to get stupidly high market cap, but not trillions, hundreds of billions will be far more likely.

Re: GLM 5.2 and the coming AI margin collapse

#182

Post by regularfry »

zmgsabst wrote: post #161
mgambati wrote: post #87

Earlier quoted context omitted.

The inertia is legal and financial. People are paying Anthropic through AWS accounts because the simple reason of not dealing making new contract and legal agreements is enough of reason of the inertia. But, eventually, I’m quite sure that AWS will also provide open models with those contracts without any inertia. Copilot is already offering Kimi. My company has a deal with Devin and they provide new models all the t…

AWS already supports Llama and GLM in its Bedrock service for hosted models. They’re much cheaper to run, eg, Llama 3.3 Instruct 70B is 5-10x cheaper than Sonnet 5. https://aws.amazon.com/bedrock/pricing/ Say you have 20% of usecases that require the more expensive model — but in 80% you could just use Llama instead of Sonnet (eg, for basic queries of a document). That saves 80% of that 80%, or 65% of your total bill…

Bedrock is really out of date with the models it offers, to the extent that I'm not sure they even have plans to update what's on there now they have the deal with Anthropic. They're still offering Qwen 3, not even 3.5 and certainly not 3.6. GLM 5 is the newest z.AI model they have, when it's 5.2 that would be the one to worry Sonnet.

There are some ok models on there (Qwen 3 Coder Next is usable and fast, for instance) but the lack of updates in a fast-moving field makes it something I don't want to recommend to my org.

Re: GLM 5.2 and the coming AI margin collapse

#183

Post by byzantinegene »

pants2 wrote: post #86
cogman10 wrote: post #31

Earlier quoted context omitted.

Unlike all your examples, switching out an LLM is both cheap an easy. So easy that every 3 months or so new models are released and people grab them and start using them. The UX is the same regardless the provider. You send in a prompt, it spits back an answer. In all your other cases, the cost to switch is losing support and a difficult transition period. But in the case of LLMs, there was no support to begin with.…

If you're developing on top of LLM APIs directly, this is definitely not true. There are differences in how context caching works, in what's available through native harnesses, the types of tools you're fine-tuned on (GPT uses apply_patch while Claude uses edit, with different formats), the API surface (Agents SDK, Responses API, Managed Agents), cost structures, and best-practice guidance all around. Not to mention…

just use your agents to do the migration, that's what it's good at.

Re: GLM 5.2 and the coming AI margin collapse

#184

Post by twelve40 »

intrasight wrote: post #51
spyckie2 wrote: post #44

It’s important that none of these entities can collude to price fix. Having China be the competitor ensures that. Basic microeconomics is still the easiest way to understand token economies. How is it not a competitive market (where profits go to zero?). Anything A or O does to keep more margin, any competitor can copy or choose to undercut, and undercutting has the benefit of collecting training data. So what is goi…

You left out the one that will: federal government industrial policy

So the federal government industrial policy is the thing that supposedly will keep the prices on "A and O" high in the US while the rest of the world will get comparable AI competing to get cheaper and cheaper?

Re: GLM 5.2 and the coming AI margin collapse

#187

Post by shrinks99 »

AgentMasterRace wrote: post #106
redrix wrote: post #55

The fact that these Chinese models are getting close to “Opus-grade” despite costing 6x-8x less is huge. As the token bills start to come in, those economics will be harder to ignore (regardless of the origin of the LLM); especially as there will be many CIOs sweating over their quick and costly AI initiatives showing little ROI. My hope is that the EU also steps up their own competition in the frontier model space s…

they're not near opus at all, anyone using the models in a real working environment will tell you the same thing. on paper they have impressive benchmarks, but that's not realistic to actual use.

I've been using GLM 5.2 a lot this past week, it's been replacing Opus 4.8. I mostly do front-end web development and haven't noticed much of a quality difference.

Sure, "it's just frontend", but that's actual use enough for me to take it seriously.

Re: GLM 5.2 and the coming AI margin collapse

#188

Post by miki123211 »

fny wrote: post #5

I'm not convinced raw costs matter: 1. Compute costs collapsed since the advent of Cloud and yet hyperscalers still have fat margins. 2. Many open source office suites exist yet none compete with the ubiquity of gsuite or office. GitHub, Slack are similar examples. 3. Both Windows and macOS dominate the home desktop space despite free alternatives existing for a long time. 4. Many formerly open source infrastructure…

AI costs a lot more than all these, combined.

Re: GLM 5.2 and the coming AI margin collapse

#189

Post by sroerick »

TacticalCoder wrote: post #113

> Where it gets really scary for the frontier labs is how easy it is to migrate to open weights models. Both Z.ai and Fireworks offer both an OpenAI compatible and Anthropic compatible endpoint. This makes it absolutely trivial to use with Claude Code and Codex. Yes the ease of switching is greatly appreciated. Now the reason I tolerate Claude Code in my tmux sessions is because apparently Anthropic ain't playing nic…

Pi.dev is great and with only a little customization made even previous gen open weights feel superior.

It also doesn't feel like they're trying to sell me on transhumanism all the time.

It also doesn't get mysteriously downgraded. It's just consistent, even before 5.2.

5.2 is great in a lot of ways - but it's best quality is that it gives some pushback and isn't nearly as synchophantic

Re: GLM 5.2 and the coming AI margin collapse

#190

Post by jesse_dot_id »

01100011 wrote: post #151

I'll agree but from the other direction. AI continues to absorb my job as a senior systems software engineer (c/c++) and after a couple months I've only spent a few hundred dollars using gpt-5.5/5.6 and codex. I have no idea what people are doing to burn so many tokens but for me this is laughably cheap and every day I discover new capabilities. I don't care if costs go up or down, it's so cheap for what I get that I…

I have the same experience. I literally cannot fathom how people burn the number of tokens they claim to.
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