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GLM 5.2 and the coming AI margin collapse

martinalderson.com

481–490 of 495 posts

Re: GLM 5.2 and the coming AI margin collapse

#481
post #425

Earlier quoted context omitted.

Also they pay for legal liability of code produced

Maybe for a fantasy of legal liability of output produced. I haven't heard of any LLM corpo being held liable for any output they generate. Even NYT lawsuit is going nowhere for 3 years in courts already, despite being the most grounded.

Copilot insures your company up to x if someone sues our company. I guess most companies do this. That’s why we can’t use anything else except copilot.

Re: GLM 5.2 and the coming AI margin collapse

#482

Earlier quoted context omitted.

Strange. This is what they got at my company. I do not remember anyone mentioning paying for tokens. Maybe because it is fairly small, couple of hundred people in IT.

Officially it's not available anymore. But there are team plans that are not enterprise, so if you are small enough and fine with the data protection included in those maybe that is what you're working with? And I do know NGOs were offered seat based plans after they were officially not available anymore. Also: This change came in in March so if you got your contract before then this will only bite once you renew. ht…

Ah past renewal... So probably in next contract there will be a lot of thinking if we still need that.

Curious: Anybody have comparison what is the difference when company is changing to token based billing? How many times it is bigger than 200$ subscription?

Re: GLM 5.2 and the coming AI margin collapse

#483
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…

There's a huge case of survivorship bias when trying to recall historical analogues, because in every instance where margins collapsed and competition made the industry a commodity business, the big proprietary names are no longer with us. Here's a selection of examples, though: 1. Memory chip margins collapsed so much in the 80s that Intel exited the memory chip business entirely. At the time, they were known much m…

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Re: GLM 5.2 and the coming AI margin collapse

#484

Earlier quoted context omitted.

Pretty sure there would be a number of EU states who'd happily pump some money in if the EU were to mandate the ECB to (incentivise intermediary banks to) buy their corresponding long dated sovereign debt cheaply to fund it.

Perhaps, but in the same breath, from the limited things I've seen and heard, they're extremely reluctant to take any risk with these types of funding schemes when disbursing, so unless it's tried and tested it's not getting off the ground i.e. it's unlikely to lead anywhere considering current state of market. I mean we can barely get EU to host with EU providers. Nevermind something so speculative.

There's potentially a virtuous circle of increased EU tech investment and increased EU tech provider adoption but given the risk aversion sclerosis that affects the european private investment community this does need to be government led. I'd agree the US private debt fuelled $1Tn build out is mostly unsustainable but when you look at what China was able to achieve with govt support on a ˜120bn AI sector investment it behoves the EU to take a stand, the first 100bn is probably the least risky.

Re: GLM 5.2 and the coming AI margin collapse

#485
post #37

Earlier quoted context omitted.

They don't just need healthy margins, they need to make back almost a trillion dollars in a couple of years. Comparing that to elastic search and redis doesn't make much sense. Hyperscalers work because it actually has value compared to free offerings and because of the absolutely massive cost of switching providers. Similar with Windows and macOS. Extremely high cost of switching to something different, if possible…

If AI replaces labor, that's a trillion dollars of labor. About one-fifteenth of annual labor/wage earnings.

It's 1 trillion over a number of years. There's a discount factor you're forgetting.

Re: GLM 5.2 and the coming AI margin collapse

#486

Earlier quoted context omitted.

Switching an agent harness is more difficult, especially on the enterprise/teams level. Once your team gets settled with Claude teams, cowork, and the various plugins, it’s going to be a pain in the butt to switch.

Is it? I switched to Kiro and it's essentially identical.. well a bit better because you get a better idea of what the harness is doing, but otherwise identical.

I should have clarified that it’s not difficult for technical workers to switch, but for your average knowledge worker…it’s not easy switching from Claude Cowork to Codex. I don’t think the switch from Cowork to open source is easy.

Re: GLM 5.2 and the coming AI margin collapse

#487
post #474
post #386

Earlier quoted context omitted.

> Apple sure won’t care Europe collectively is about 26.7% of their 2025 revenue, according to SEC filings, so I bet they'd care. https://www.sec.gov/Archives/edgar/data/320193/0000320193250...

It's worse than that. If Apple were banned, someone else would fill their spot.

Oh no, Europe would stand on their own two feet!?

Re: GLM 5.2 and the coming AI margin collapse

#488
post #71

Earlier quoted context omitted.

There's definitely a saturation point depending on the complexity of the problem you're solving. For example, any model can write a small shell script to resize a video with ffmpeg for you right now, so it doesn't matter whether you're using a local Qwen model, GLM, or Fable. They'll all do a roughly comparable job and you'll end up with a working script that does what you need. Then you have things like CRUD apps, w…

if you give me a smarter model I will find a more complex problem for it to work on that will require an exponential number of sub-agents. the smarter the model the more capable it is to marshal resources to accomplish the goal. this means you don't need a smart person to be able to take advantage of this. a smart model will be able to do the same.

The question is that of cost. Sure, there's no downside to having a smarter model, but if you have to pay orders of magnitude to use it, then it's just a waste of money. If you can get around on a bicycle then you're not gonna buy a monster truck.

Re: GLM 5.2 and the coming AI margin collapse

#489

Last month, I cancelled my Claude Pro subscription and instead used those 20$ to purchase Openrouter Credits. Most of my knowledge-seeking questions can be answered by Gemma4, for basic code editing, Qwen3.6 27b is enough, and for really difficult tasks, GLM5.2 doesn't leave me hanging. I'm by no means a heavy AI user, so I'm even saving money going the API Credit route and relying on the smallest possible model depe…

What do you use as interface to OpenRouter? I, too, am looking into using an API to see if I can reduce costs (I use OpenAI + Github Copilot, currently). TensorX instead of OpenRouter (because it's in Europe, and EURouter wanted 15% more money from me :P), but I'm not sure if I want to change a configuration in vscode every time I want to switch the model in the Claude extension (and having an API key in my settings…

Zed

Re: GLM 5.2 and the coming AI margin collapse

#490
post #474

Earlier quoted context omitted.

It's worse than that. If Apple were banned, someone else would fill their spot.

Oh no, Europe would stand on their own two feet!?

Great for us here in Europe, but an even bigger reason for Apple to be upset about it.
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